commissions at IB

Discussion in 'Risk Management' started by Tomcho21, Dec 11, 2009.

  1. Tomcho21


    I have a question/comment about trade commissions. I am currently using interactive brokers trading small cap stocks with prices averaging $1.00. Their commissions seemed low at $0.01 per share compared to other brokers but as my trade sizes increased they don’t seem like the best choice.

    I am thinking of switching to another broker that charges as flat rate (eg. $9.95 plus ECN fees) because there is such at large difference between the commissions.

    For an example if I use IB to trade 10,000 shares @ $1.00 my commission will be $100.00 but with a flat rate broker 10,000 shares @ $1.00 = $9.95 + $30(ECN fee $0.0037 * 10,000) =$39.95. That’s a big difference over the long run.

    I have no problem with IB and like using the TWS software but with that much of a difference I think a different broker will suit my needs.

    Just wondering what everyone’s thought on this are.
  2. teun


    For US stocks I thought commissions are 0.005 (bundled) or 0.0035 (unbundled). Or do you mean stocks on some non-US exchange?
  3. rosy2


    are you just gong to buy 10000 shares of one stock once? if so go with another broker. if you buy 1000 shares of 10 different stocks use IB.
  4. def

    def Sponsor

    are you really a client? if so, check your statement, fees for stocks have been .005 per shares (including SEC and everything else) for quite some time. They're also capped at .5% of trade value which helps on the penny stocks.

    However, if you want lower fees than that, you can choose unbundled pricing and should you provide liquidity, you would receive the exchange rebates which could end up reducing or even give you a negative commission. (ie. you get paid).

    Finally, many firms won't allow you to place more than 5K shares at a time and because they are selling the order flow, may not be giving you the best possible execution. As the saying goes, penny wise, pound foolish.
  5. Tomcho21


    I forgot to mention that I'm trading on the Toronto exchange where the commssion is 0.01. The commissions look better at 0.005 for US exchanges so maybe I should start trading US stocks.