Ameritrade vs Interactive Brokers

Discussion in 'Retail Brokers' started by veritas007, Dec 3, 2010.

  1. I am looking to put together an automated trading strategy with my friend which will buy and sell stocks several times a day. Ameritrade can offer $7 dollar commissions on trades regardless of the size, while IB charges .5 cents a trade. Theoretically, Ameritrade would be cheaper than IB for handling larger trades. For example, if I bought 5000 shares I would pay a commission of $25 dollars on IB and only $7 dollars on Ameritrade. Are there hidden costs to Ameritrade or IB? Does IB offer better price improvement?
     
  2. That's a big IF.
     
  3. Catoosa

    Catoosa

    Only on very liquid stocks can I even hope to buy 5000 shares with one limit price order. I have had little success with AT on such orders. I do better buying the 5000 shares in several small limit orders at IB's 1/2 cents a share price.
     
  4. You may want to check out TDAmeritrade's promo for $5 a trade for one year. For some reason, it is not advertised on their site. You have to ask for it. To qualify you must open a new account and have it funded by Dec 20. I learned about it when I went to check about opening an account at a local branch.
     
  5. Catoosa

    Catoosa

    A sure way to resolve this dilemma is to open an account at both IB and AT. You will then be able quickly see which broker works best for your trading.
     
  6. I have both. Getting rid of TDA because of liquidity issues. When you want out fast, you want to have an ECN broker like IBKR.
     
  7. IB has better fills, Ameritrade has better pricing model for anything more than 1000-1400 shares depending on your price.

    At Ameritrade I feel like I'm getting front-run more often. They route mainly through Citadel and Direct Edge where your orders probably get flashed and then front-run by computers.
     
  8. If you are a seasoned trader, you will get frustrated with AT very soon. Will you use margin? Compare IB's margin rate with AT. BIG BIG difference.
     
  9. birdman

    birdman

    Catoosa,

    Off the top of your head, what would you say the minimum daily volume your stocks must average trading, before you can expect to trade 5000 share blocks with one limit price order?

    Many thanks,
    birdman
     
  10. With IB, your "per/share" commission starts dropping when your monthly volume hits 300k with an unbundled structure.
    If you are trading 5000 shares per trade a couple of times a day, it seems like you'd hit that threshold pretty quickly.
    http://www.interactivebrokers.com/en/p.php?f=commission
     
    #10     Dec 9, 2010