Bundles/unbundles IB commissions

Discussion in 'Interactive Brokers' started by brooklyn, Jan 18, 2010.

  1. brooklyn

    brooklyn

    Hi, just wondering what the difference aside from price is between bundled and unbundled IB commissions? Which should I choose?

    Thanks
     
  2. the unbundled commissions are better but the volume threshold is significant. if you choose unbundled you get charged bundled fees until you cross threshold.
     
  3. brooklyn

    brooklyn

    Thanks OTC, but could you please explain what the volume threshold volume is and what crossing it means? Thanks
     
  4. Brooklyn, based on your reading of the comission breakdown on the IB site, do you make enough trades to consider "un bundling"?

    Do you plan on trading that kind of volume?
     
  5. brooklyn

    brooklyn

    well there's a category of <300000 shares/month so I'm curious which type peple usually use
     
  6. jamreyes

    jamreyes

    It states the following:

    Volume (per month)(1): IB Commission per Share
    <=300,000 Shares USD 0.0035
    300,001-3,000,000 Shares USD 0.002
    3,000,001-20,000,000 Shares USD 0.0015
    >20,000,000 Shares USD 0.001

    would that mean anything less than 300,000 you would get the .0035 per rate vs the 0.005 rate in the bundled. but I think you would have to pay additional fees for the exchanges.

    Arca exchange fees:


    Remove Liquidity(1) Add Liquidity(2)
    NASDAQ >= $1.00 per share $ 0.0030 ($0.0021)
    NASDAQ < $1.00 per share Trade Value * 0.001 $0.0000
    NYSE >= $1.00 per share $0.0030 ($0.0021)
    NYSE < $1.00 per share Trade Value * 0.001 $0.0000
    AMEX >= $1.00 per share $0.0030 ($0.0022)
    AMEX < $1.00 per share Trade Value * 0.001 $0.0000
    Oddlot (NASDAQ) >= $1.00 per share $0.0035 $0.0035
    Oddlot (NASDAQ) < $1.00 per share Trade Value * .001 $0.0000
    Oddlot (NYSE & AMEX) >= $1.00 p/s $0.0300 $0.0300
    Oddlot (NYSE & AMEX) < $1.00 p/s Trade Value * .001 $0.0000
    Cross Orders $0.0000 $0.0000
    Market-on-close (NASDAQ & AMEX) $0.0007 $0.0007
    Limit-on-close (NASDAQ & AMEX) $0.0007 $0.0007
    Auction Orders (Opening, Market Order and Closing Auctions)
    $0.0000 $0.0000

    Comparison EXAMPLE YRCW value = .50
    buying 10,000 of YRCW with bundled fees:
    - 10,000 x .005 (Smart routed) = $50

    buying 10,000 of YRCW with unbundled fees:
    - (10,000 x .0035) + ($5000 x .001) = $40

    Using a stock > $1 - SQNM value = 6.5
    buying 10,000 of SQNM with bundled fees:
    - 10,000 x .005 (Smart routed) = $50

    buying 10,000 of SQNM with unbundled fees:
    - 10,000 x .0035 + (10,000 x .003) = $65

    These examples are only if you are selling or buying at the market or at a limit price that will execute immediatly. If you buy at the bid and sell at the ask, the unbundled fees will be lower.

    Example of providing liquidity (buying on bid and selling on ask):

    buying 10,000 of YRCW with unbundled fees:
    - (10,000 x .0035) + ($5000 x 00.00 ) = $35

    buying 10,000 of SQNM with unbundled fees:
    - 10,000 x .0035 + (10,000 x (-$0.0021) = $14


    Thats how I think it works.