According to the web site of IB, commission for options is about 15 cents per contract (ie. per 100 options). Now the mystery for me begins here: I bought 20 contracts (in just 1 order) and IB charges $10. How come?
The commission structure is a tiered model based on volume per month. If you were charged .50 a contract, you have executed between 10,001 and 50000 contracts in December or the price of the option was < .10 http://www.interactivebrokers.com/en/accounts/fees/commission.php
It's all cheato... They advertise for cheap rates if routed via their so called SMART route, but if you make use of it then your order does not get filled, or get filled only if it is to your disadvantage (ie. filled only if the market price goes against you,...) CHEATO! I SAY! CHEATO! And: you say SMART, but after sending it out it says CBOE...
Just take your medicine and go back to fighting those imaginary wars with market makers on your demo platform.
Traderum, Unmarketable Smart routed orders have to rest on an exchange. Just because you see CBOE doesn't mean the order will stay on the CBOE. Smart means IB will pull the order off the exchange it is resting on and get it to an exchange where the order is marketable if that happens. You could never manually reroute your orders as fast as our software plus our software considers maker taker fee's when multiple exchanges are on NBBO. Another factor that would make manually routing much slower and reduce your fill rate. The below links explains exactly how it works and will explain what you see on your Work Station. http://www.interactivebrokers.com/en/p.php?f=smartRouting
Please don't send him away, I for one quite enjoy his tireless MM-hunt, I say jokes shouldn't be restricted to the jokes thread any more! you say SMART, but after sending it out it says CBOE, priceless!
So, then this means the trader has virtually no control over the commission he has to pay, because the broker decides which route to take (and of course each route costs different... so the broker chooses the route which makes him the most profit -- or have I maybe overlooked something?
If you're uncomfortable with your commission being within a (defined, known in advance) range, you can direct route your orders to get finer control.
We consider taker fee's when routing orders and Smart will route to the exchange without a fee if there are two exchanges at NBBO (one with, one without a fee).