def i've called ib and for 10 million month they offered .005. you're telling me hedge funds that trade with you are paying .001?
What is the best way to reduce the commission costs
- Thread starter StocksSniper
- Start date
Three or four years back, I was paying several hundred dollars a day in commissions. I decided I was paying too much in commissions; So, I decided I needed to quit playing "market maker" and trade less but trade smarter. I have been trading since 1972 and I hope I am still learning. I still keep my eyes open for a better broker so I am reading, thinking about, and evaluating what you saying.
def
Sponsor
as I stated that would be news to me.
in regards to hedge funds, they aren't typically trading 500 lots so their price would lean towards the .005 all in. they also tend to care more about the quality of fills and trading a global array of futures, options, stocks and currencies on one platform.
ib will lower their rates when the level of service of other companies will approach that of IB . level of service includes expenses to the customer resulting from poor trade execution and breadth of products offering. other considerations are how automated the firm is. at ib you can get a check online. of course it would be nice if they had checkwriting or if you could wire money to whoever you wanted.
def thats true never thought about that so if they do 10k blocks they're near that. i have an options account with ib and love them. people must evaluate there own situation and do what makes them happy
have you signed a confidentiality agreement with this co. if not just name the firm. this whole bazaar attitude always works to the advantage of the seller not to the customer.
anyway it is not a 01/shares. it is a blended fee with ecn fees included. if you are fair size trader it brings your cost down to about ,0065 ecn fees incl.. my guess most traders at ib take liquidity. at some pt. if a trader gets big enough and wants to deal with a manager, he will make a decision what to do.
The importance of commission rates is extremely dependent on the specific needs and trading style of each trader. For many traders, a firm like IB would be a perfect fit. However, for other traders (like me), IB is outrageously priced.
IMHO, IB seems to work well for traders that
1) Trade infrequently - Swing trade or low activity daytrade (no software fee, decent commissions, decent service, etc)
2) Trade longer timeframes - i.e. commissions not large P&L consideration in a trade
3) Value the ability to trade foreign markets, etc.
However, for a high volume trader, IB is simply not a viable option, IMO. I considered IB for my stock trading about 18 months ago, at a time when my then-brokerage firm was charging a rate that was less than half of IB. I contacted IB (a guy that def recommended) and found that they didn't seem to offer any 'deals' for high volume traders, making their rate structure extremely uncompetitive with the other options.
I eventually settled on another firm and have been happy there for the last ~14 months since switching. During that time, I have saved over $400k in commissions (trading 1000-2000 tickets per day, 200k-600k shares per day), versus what I would have paid during that time at IB. I challenge anyone to prove to me that commission rates are not important in light of my experience. That said, I'm sure IB is the ideal broker for many traders. One size does not fit all, when it comes to choosing a broker.
I have great respect for firms such as IB and MB Trading, but every trader must find the best broker for themselves, in light of their own unique situation and needs.
For what it's worth, I posted a few more thoughts on commission rates at the following link: http://www.elitetrader.com/vb/showthread.php?s=&postid=719669#post719669
IMHO, IB seems to work well for traders that
1) Trade infrequently - Swing trade or low activity daytrade (no software fee, decent commissions, decent service, etc)
2) Trade longer timeframes - i.e. commissions not large P&L consideration in a trade
3) Value the ability to trade foreign markets, etc.
However, for a high volume trader, IB is simply not a viable option, IMO. I considered IB for my stock trading about 18 months ago, at a time when my then-brokerage firm was charging a rate that was less than half of IB. I contacted IB (a guy that def recommended) and found that they didn't seem to offer any 'deals' for high volume traders, making their rate structure extremely uncompetitive with the other options.
I eventually settled on another firm and have been happy there for the last ~14 months since switching. During that time, I have saved over $400k in commissions (trading 1000-2000 tickets per day, 200k-600k shares per day), versus what I would have paid during that time at IB. I challenge anyone to prove to me that commission rates are not important in light of my experience. That said, I'm sure IB is the ideal broker for many traders. One size does not fit all, when it comes to choosing a broker.
I have great respect for firms such as IB and MB Trading, but every trader must find the best broker for themselves, in light of their own unique situation and needs.
For what it's worth, I posted a few more thoughts on commission rates at the following link: http://www.elitetrader.com/vb/showthread.php?s=&postid=719669#post719669
The largest hedge funds get commissions known as "cost plus". They open the books to see the prime broker's cost to clear for their business and add a small percentage.
top hedge funds are paying .001 to .0015 per share. to those who don knpw the avg clearing house neeeds about .0005 to cleart a trade. anything above is profit for the huge clearing houses. so a big company who self clears can make money at .0015 a share. anyone asnwer me how cyber trader has an all in ratr of .006 and there customer service is second to none. so if i hi the bid and ask all day long thery're still netting .003 a share. now they'll make big money on nyse stocks. again how anyone can sit here and say paying 1 cent is better than paying .00225 makes no sense to me. even if my net commissions is .005 less than ib's thats still $250 a day or 3k a month for 50k shares a day