OP is just another one post wonder. As pointed out above, he never stated any detailed information. Frequency, volume, instrument, discretionary, automated, etc. I for one am quite content with IB {discretionary, position/swing trader, primarily index & commodity futures, forex and occasional short term equity trades during volatility events}. Commission isn't a large issue on longer term trades and I absolutely love the flexibility provided by portfolio margin. I also like the fact that they are strict on margin's and risk control. The sense of security provided by IB alone is worth any slight difference in commissions to me. I also agree with previous poster, execution with IB is superb. Platform and data fee's are more than reasonable. Snapshot data is more than sufficient for most all discretionary traders. It doesn't lag in fast markets, accurate and reliable. Perhaps there are better deals for high volume/frequency automated traders. In which case, they should by now already know their options, pro's and con's. For the majority of serious retail, discretionary traders it is hard to beat IB. [They have higher account minimums for a good reason, pikers need not apply]
Lets look at the following eg: IBIO at $1.71 going all in with $40k will allow you to purchase 20,942 shares. Round trip I would spend $209 dollars, or at .0035 per share round trip would cost $70. None of the aforementioned is competitive.
So you say but 1. are you providing liquidity and perhaps routing to an exchange that provides a rebate - which could lead to negative commission? 2. are you perhaps having your order sold elsewhere an perhaps missing out on price improvement or getting a worse fill (every .001 in price in your example is $20). As I said earlier, it's the total cost of execution that counts which includes the fill and for all I know if you're just trading penny stocks perhaps you'll be better off elsewhere if you are just taking liquidity. All I'm doing is pointing out that you are not looking at the full pricing structure and are fixated on the front line commission without taking into consideration exchange rebates, financing costs, and execution quality. (for example, have you ever read and compared routing venues and 606 reports amongst the brokers you're looking at?)
I suppose I should admit that I'm having my first connection difficulty with Lightspeed this morning. I've lost quotes and probably the ability to place orders (LOL). It was kinda convenient that this happened about 60 seconds after I exited a 2 minute scalp on Ford. Otherwise I'd be calling them up and asking them to exit the position. So I'm more or less flat. Think I'll go get a real breakfast.
Interactive Brokers doesn't need to sell order flow when they can just give it away to Timber Hill. Timber Hill is one of the world's largest HFT's (and also the the world's first) that just happens to fall under IB management's control. Of course, the profits from this little trick still accrue to the same parent company. But we're not supposed to notice that, right?
You've been marching this same tune over and over again and you've always been wrong. Take a look at the 606 reports, comments by the chairman and a host of other material that is out there. A good start would be by taking a look at our new trading expense summary which goesinto greater detail than anyone in the industry. Here's a link: try reading it along with all the other information pointed your way over the years. https://investors.interactivebroker...bout/mediaRelations/10-01-14.php?ib_entity=ir The axe that you've been grinding is getting pretty dull by now. (never mind if you are really that paranoid and don't believe the info reported to regulators you could route directly to IEX where of course IB is only one of the few direct access firms that offer routing to that venue).
Everything I post is verified by documents on IB's own Web site and its SEC filings. "Timber Hill provides an automatic execution service for certain eligible IB customer orders in certain Nasdaq stocks and NYSE and other exchange listed stocks." This is internalization, whether or not Timber Hill is technically a separate legal entity. IB's grossly inflated pricing for directed API orders drives home the point. I can't imagine that this has any purpose other than to force more flow to Timber Hill. In my opinion, IB lies somewhere between a retail online brokerage that milks it for all it's worth (i.e. internalizing nearly 100%), and truly professional brokerages where all orders are directed by the client (internalizing nearly 0%). Sure, IB is probably far better in this regard than Ameritrade or ETrade or Fidelity; although it's hard to tell, because at least the discount brokers are selling the order flow to third parties. When IB is interacting with Timber Hill, there's no telling what's going on in there. And I strongly doubt that the IB employees on this forum know, given their apparent ignorance of IB policies publicly posted on IB's own Website. There is nothing "paranoid" about concern about the costs of internalization. Internalization (whether to PFOF firms such as Knight, or to the B/D's own "affiliate" such as Timber Hill) costs investors billions. And it's nearly impossible for the client to see it, except as a mysterious shrinkage vis-a-vis what they should have gotten over the course of a large number of trades. By the way, I'm not posting this in support of Lightspeed. Last I checked, Lightspeed was owned by Schonfeld, who (like IB's parent) have massive HFT operations that pose a significant potential for conflict of interest for Lightspeed clients. Whether they exploit this to their advantage, I don't know. But I'd be very concerned about frequent trading in either firm, which is why I don't use them as such.
You statement is misleading and I'll paste some comments below from our last earnings transcript (you can listen to the full call from our investor relations site) but first I'll give you another reason on the API. There is a network cost to routing and with the numerous exchanges in the US it is more efficient for us to allow our SMART router send the orders than have some clients potently flood our network via computer generated orders. Now before you point to that as evidence backing up your point, read the comments below which talk about the net cost of execution. Also, if we internalized as much as you say to the determent of our clients, would the 606 reports and execution costs stats point this out. ---- http://seekingalpha.com/article/258...-2014-results-earnings-call-transcript?page=2 Customers are coming to our platform. A key differentiator that is driving this trend is our significant cost advantages over other brokers. Not only do we offer much lower commissions, our customers achieve the industry’s best price execution thanks to our superior order routing technology and firm commitment to not engage in the practice of selling our customer order flow like most other Brokers do. In August, I submitted a letter to the SEC recommending that they require all brokers to publish cost of execution metrics that would once and for all, allow investors to compare trading costs across brokers. This letter is published on our site under About IB and Comment Letters and Papers. While the SEC is currently evaluating payment for order flow and market structure issues that may favor high frequency traders over retail investors, it remains to be seen how the regulator will proceed. Their repeated call for transparency speaks in our favor. Hopefully by now you’ve seen the Reg NMS execution data we’ve started including with our electronic brokerage metrics that we publish monthly. The bottom line is our customers have paid merely 1 basis point [or one hundredth of one percent] year to date in total trade costs as a percent of total trade value. Total trade cost is comprised of commissions, fees and market impact. The way we calculate this number is that we compare total, all-in trading cost with executing at the daily Volume Weighted Average Price, or VWAP, without any additional cost. A key observation when viewing these statistics is that in certain months, and for the entire 9 months year to date, our customers’ execution cost or market impact is actually a negative amount. This is due to our SmartRouting technology, that automatically routes each customer order to the venue that will at any moment probabilistically produce the lowest net trade cost for the customer by taking into account accumulated, rolling statistics on potentially better prices and rebates or fees. One basis point of total trade expense is a remarkable result, especially if you consider the fact that from this we must pay SEC fees of 0.2 basis points on sales. We are nowhere near finished with building this system. We keep refining it and updating it as new transaction venues and new rules appear all the time. While our competitors are trying to figure out how to maximize their income from selling their customers’ orders to others, who in turn, are trying to maximizing their income that they derive from taking the opposite side of those orders, we dedicate our software development resources to secure the best price for our customers.
Unfortunately, this is not true. See this thread: http://www.elitetrader.com/et/index.php?threads/retail-routing-to-iex-exchange.283211/page-4 Apart from that thread, I've exchanged 62 emails (not a typo) with the IB development team on getting IEX routed orders to submit. Despite repeated claims throughout those emails that the fix has (once again) been implemented, to this day they still do not work. You can see the first claim of a fix in that thread on 5/6; it was 6 months ago and the first of many. I happily volunteered to test the orders (time and time again), but they never worked. In sum, that alone has cost me several thousand dollars. The process has been maddening and it's almost hard to believe whoever is working on it can be wrong so many times without properly testing the alleged "fixes". Def- I know you've been able to push things through in the past, can you help with this?
I've tried both and unfortunately have had a bad experience with lightspeed customer service. I found myself on the phone or mailing service over and over to fix simple issues that should have not been issues in the first place instead of paying attention to trading.