Did you know IB commish is lower than Global Futures?!

Discussion in 'Interactive Brokers' started by ML_QUANT, Jul 18, 2008.

  1. Has IB recently reduced comms.? Or am I reading them wrongly?
    Based on my calcs., IB up to 2000 contracts a month turns out to be 14 cents lower that GF!!! Up to 3000 will be higher by only .08 but worth every cent of it due universal account etc.
    Not to mention, less than 300 would be lower by $107 per trade!

    With GF, the Xtrader at $650/month is obligatory to get their lowest comms.


    IB also has a clearing fee, don't know about GF though?
  2. jtnet


    i have transact and they have cheaper commiss and better service
  3. JackR


    IB rates haven't changed in some time. Since you mentioned <300 I assume you are referring to Futures. Which futures? Bundled or unbundled rates?

    Take a look at this page - http://individuals.interactivebrokers.com/en/p.php?f=futuresComparison&ib_entity=llc

    If you are thinking of going to IB just remember they are very conservative. I think you now need $10K to open any account except an IRA and they often raise the futures (like the ES, ER2, and YM) day margin requirements to the overnight rates if they feel things are getting wild.

  4. First, they haven't reduced commissions. But using the unbundled rates they are lower than some expect if you're doing some volume. Just gotta make sure you calculate them correctly.

    For 2000 contracts round turn, I get $3.80. That includes execution, clearing, exchange and regulatory. I figured it for ES as my example.

    Obviously there is no platform fee.

    Velocity Futures for example will give you $3.73 for that volume according to their website. But then you gotta pay for the platform. That could run you $500.

    IB has the universal account. Plus you can trade a variety of markets. Plus you earn interest on the account.

  5. IB doesn't have any commission rate that equals $3.80 RT for ES. Sounds like you might be talking about an average for a total of 4000 sides.

    First 300 sides is $4.70 RT
    Next 700 sides is $4.30 RT
    next 9000 sides is $3.60 RT
    next 10,000 sides is $3.30 RT

    IB needs to lower their futures commissions to be more competitive. They can easily afford to lower commissions as IB claims to have the lowest costs in the brokerage business and their brokerage business had a pretax profit margin of 45% last quarter. IB is both a brokerage and a clearing firm and there are futures FCMs that aren't even clearing firms that have lower rates than IB.

    Come on IB, give your loyal futures customers a better deal on futures commissions. Lower futures commissions will bring in more business in the long run.
  6. Jeb:

    First 300 sides is 2.35
    Next 700 sides is 2.15
    Next 3000 sides is 1.80

    If you do the math, the total here for 4000 sides is $7610. That works out to $1.9025 per side.

    Figuring this out per round turn works out to $3.805 for 2000 roundturns.

    You can't figure it the way you set the numbers out, because it distorts the break points.

  7. I didn't distort anything, you gave a RT commission number so I gave RT commission numbers to be consistent. The commission breaks come by sides exactly as I specified. Your specification is the same as mine except that "Next 3000 sides" is actually "Next 9000 sides" in the IB commission table.

    Here is the exact same thing expressed 2 ways: $2.35 a side is $4.70 RT, $2.15 a side is $4.30 RT and $1.80 a side is $3.60 RT.
  8. Ok Jeb:

    In my first post in this thread I used an example of 2000 round turns, and said the rate was $3.80.

    You said the following:

    I then calculated out the rate for 2000 roundturns (4000 sides), which was $3.80.

    Now perhaps your point in this thread was to quote the IB commission table. I simply averaged it out. But if your point was that IB doesn't charge specifically $3.80....yeah, you're right. So what?

    The point I was trying to make in my original post here was that IB's rates for 4000 sides (2000 roundturns) average to $3.80, which can then be compared with one of the other firms.

    What I've found is that when you consider everything, commission, platform, interest on balances, products offered, etc., IB is competitive.

    In your post you whined about IB not being competitive. And frankly, I think you're wrong, depending on your volume. 4000 sides is an example.

  9. What is important is the average cost of course. Then to bring the IB cost down to $1 per RT(which is what others offer with min. a few hundred trades only) will have to do 13,000 RT's with IB!!! Then at 13 k rt, one could get much lower comms from others too.
    My comfort level is say 5,000 rt/month. at which point with IB my cost will be $0.57 higher than the competition = 5000 * -.57 = -$2850 !!! Well, nothing IB has or offers would be worth an additional $2850 a month premium to one.
    IB is simply NOT competitive for anyone doing more than 150 rt per month.

    My calc shows IB cost is 1.30 avg for 5k rt when the industry is giving .81 including XT!

    IB give me .40 side and will give you 10,000+ contracts per month in addition to a Ton of options and equities and a 100k account deal?
  10. According to their website, Velocity Futures offers $3.47 for 5000 roundturns plus $500 for the standard X-Trader, which adds $.10 per contract, or $3.57.


    Now, maybe they negotiate down farther, I can't tell you one way or the other. But according to the numbers on their website, that number you claim is an "industry" number is too low.

    That said, a firm like Velocity for instance does not offer stocks or options.

    And then there is the safety question when it comes to futures trading. How safe is the firm you're dealing with?

    By the way, I wouldn't hold your breathe waiting for IB to drop their drawers for your little $100K account. LOL.

    Who are you getting these $.80 per contract quotes from?

    #10     Jul 19, 2008