been around EliteTrader for a while. i have traded stocks; anyway i want to move over to futures, i have been paper trading ES for 6 months and am looking for a broker. I will ONLY trade ES market, since my edge is on that. what is the best/cheapest broker? I use esig now and I trade off a 10min chart, so i figure if i drop esig monthly payment i could use IB's feed and quotetracker or sierra for my charting needs. if some other broker has nice free data for charting that will be great as well. My contracts starting out will probably be less than 300 a month and i do about 10 RTs a day. my monthly contracts will increase accordingly eventually. IB charges 4.80 a RT which seems high to me, does anyone else have any recommendations? because if i can save money on commission, i could use the money back towards esig and not worry about free charting. I dont want a huge monthly FEE for the platform 0$ if possible, i dont need the expense of TT Xtrader . Also want a legit broker, that wont steal my money either if they for some reason go down in flames.
iv always thought of IB's commissions as reasonable. a large chunk of the RT fee comes from exchange / reg / clearing fees, IB's fee ontop of that has a good volume based discount setup which encourages high volume, low return traders to trade through them, and unfortunately discourages low volume, low return traders. what i wish they did is offer a 'no loss' account model where IB's portion of the commissions are only charged if the trade was profitable. sure they would make less $ on commissions but id imagine that type of insentive program would bring in a boatload of new clients which would more than make up for it. plus charging someone commission on a negative trade is like kicking them while they are down at any point does providing a better service justify lower profits?
You're very creative. If IB offered a "no loss" account model, they would very quickly declare bankruptcy, as 80-90+% of traders are net losers. Also, the basic broker/trader model is one of assumption of risk, the brokers' role is to act as a middle man to facilitate trade between all interested parties, not to gaurantee a profit on the transaction. But nice thought, never-the-less. Good trading, JJ
ya im not saying they should guarantee profit. im just saying as a client incentive to help reduce the pain of negative trades, note just by voiding _their_ chunk of the commission, not the exchange fees etc. as for them going bankrupt due to the model i highly doubt that. if every one of their clients flip coins to trade, resulting is 50% negative trade ratio. in that case their profits from traders opting for the noloss model would be reduced by 50%, meaning they would only need to double their client base marketing their new incentive program to get back up to par (now with a better product). as for traders who trade less than 50% profitable trade ratio, IB makes less off them. if most trade less, say 30% ratio, they would need to triple their client base to remain at the same profitability for the noloss accounts. i dont know if those are unrealistic expectations, but id imagine a brokerage like IB offering something like that would draw some amount of veteran traders and more importantly a huge amount newbie / hobby traders who are looking to curb their downside risk. apple and google are not popular / powerful companies solely just because they are profitable, they are because they offer great products that people like to use over their competitors. sometimes the company has to pay in order to make a product 'great'. there is something to be said about companies that choose to try going beyond the status quo.
Whimsical Ramblings..... Here's an incentive... Everytime I dont lose, gimme back my commissions. There is an incentive to be a winning trader....
90% of traders lose, but numerically the 10% making money would still be a lot of business. Plus, profitable traders generally trade higher volume. Stock commissions have gotten so low at .003 to .005/share that it is practically free compared to the $25 ticket charge that was common in the late 90's.
Reading your thread title I'd say go! IB's fees are "all-up". There are no other fees. You should also look at their unbundled rates which are slightly cheaper if you don't hold overnight. They get cheaper as your trading increases as well. Many of the commissions you see advertised are just the broker's commission. They then tack on the various exchange fees. In some cases they force you to use their trading platform (some offer a choice), but they then charge a monthly fee for the platform. Some actually charge for quotes. Others advertise rates that are based on 1000's of contracts. I'd suggest getting all the info and estimating your round-trip cost based on your average trades per month of 300 R/Ts. Jack