Understanding Cost at IB

J

JuliaScivi

Hello,
I am new in on-line trading, and I am concentrating most of my efforts at the moment to understand how Brokers work.

I think I will go for IB (Interactive Brokers), but before opening an account, I want to be sure I understand all the costs which I have to take into account.

And to tell you the truth, for a person like me, most of the information is very obscure (lots of acronyms and specific terms) and not very clear. I therefore would like to ask your help to understand the "Cost" section of IB:

https://www.interactivebrokers.com/en/index.php?f=4690

Apparently they have 4 different kinds of fees: Commissions, Interest & Financing, Research News & Market Data and other fees.

Maybe I am going to ask my questions one by one. Let's start with commissions (https://www.interactivebrokers.com/en/index.php?f=1590).

So these are the most obvious fees I need to take into account. But then again, they have 2 types of commissions fees: "cost plus" and "flat rates". What's the difference? Do we need to chose one or the other? Or do we need to pay both? I really don't understand...

Thank you in advance for your help!

Best,
Julia

PS: I am concentrating at the moment for fees concerning a USD account in North America and for trading only stocks.
 
Quote from JuliaScivi:

Hello,
I am new in on-line trading, and I am concentrating most of my efforts at the moment to understand how Brokers work.

I think I will go for IB (Interactive Brokers), but before opening an account, I want to be sure I understand all the costs which I have to take into account.

And to tell you the truth, for a person like me, most of the information is very obscure (lots of acronyms and specific terms) and not very clear. I therefore would like to ask your help to understand the "Cost" section of IB:

https://www.interactivebrokers.com/en/index.php?f=4690

Apparently they have 4 different kinds of fees: Commissions, Interest & Financing, Research News & Market Data and other fees.

Maybe I am going to ask my questions one by one. Let's start with commissions (https://www.interactivebrokers.com/en/index.php?f=1590).

So these are the most obvious fees I need to take into account. But then again, they have 2 types of commissions fees: "cost plus" and "flat rates". What's the difference? Do we need to chose one or the other? Or do we need to pay both? I really don't understand...

Thank you in advance for your help!

Best,
Julia

PS: I am concentrating at the moment for fees concerning a USD account in North America and for trading only stocks.
More...

Really depends on what and how much you trade. One is a fixed fee including all exchange fees and the other passes on all exchange costs including all credits/debates such as rebates or maker taker fees.
 
Thank you for your response!
I am not sure to understand all the terms you are using, but basically I plan to trade only equities (between 1-1000 per trade).
I actually made a list of all costs listed on IB's website. Maybe you can just help me and tell me if and how these fees apply for buying equities from a company listed at NASDAQ. Or to take an example, let's say I make a trade where I buy 1000 stocks from Google and then sell them. What are the costs I will need to pay for these 2 transactions?

I allowed myself to list all costs from IB below, and to put question marks to the ones I don't understand. Also, if you can tell me if these apply for the above trade example, it would be great!

Thank you again for the help! It's very appreciated.


Cost Plus: <= 300'000 shares : 0.0035 USD per share
Clearing Fees: 0.00020 per share
Transaction fees for sell orders: 0.0000174 per share
Exchange Fees: What are these fees and how do I calculate them?
Flat Rate: 0.005 USD per share, minimum 1 USD
Fed Funds Effective (Overnight Rate): 0.09% (what is this?)
Interest Charged to you: does this apply to me if I don't borrow from the broker (margin)?
What are take-up fees?
Exercise: 0.0000174 * value of aggregate sale, what is an aggregate sale?
ADR Fees?
IRA accounts fees?
DTC Position transfer?
 
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