Thanks for the links. Can you perhaps explain why do these firms operate in this manner? Why do commissions vary between customers based on something else than trading volume? I just don't understand it.
The better question is why do you care? Regardless, the answer is one word... competition! Why does Walmart sell the same exact item for less? Why doesn't ATT offer .029 per-minute long distance? Why is State Farm more expensive than Geico? Your "argument" can be said about almost anything! You can look up the various rates charged by the exchange for members and non-members. The difference between those rates based on YOUR status, and your quote is the gross profit margin. Some brokerages are more willing than others to negotiate within that spread. I just don't understand why you see that as a problem. Osorico
I am also client of IB. They are other factors to consider besides the rates. IB for example is great at providing discounted data feed at low rates while TS, for example charges full rate for each exchange. In addition I find the Universal Account very convenient. Currently I am paying 3.62 (unbundled) for ES and 3.16 for YM but what is worth looking into is trading ESTX50. ESTX50 is comparable in contract size and in movement to ES but with more then twice the volume and the roundturn all included is 1.82 (because DTB's fees are so much less then GLOBEX or ECBOT). ESTX50 opens at 2:00 EST but becomes really active when the cash market opens at 3:00 EST. It is continuously active until the US markets close at 16:00 EST I have considered leasing and checked into other brokers but I decided that IB is an all around good deal and I can make a major improvement in my profit picture by being a better trader. GC
Ah, GC what a good idea! I have been occasionally trading ESTX but never thought about it from the cost-perspective. IB fees are indeed higher, but total cost per contract above 1000/mth is only â¬0,90 for ESTX. In dollars this is about $1.35, compared to $1,81 in the e-minis, i.e. 25% cheaper. I guess there's also the possibility of IB updating its fees to reflect the current exchange rates. Fees in EUR could be cut by over 25% before they match the USD fees. The Europe/US correlation is not perfect, but still quite high, so it should not be a big difference between ESTX and ES. Or what do you think? Though it must also be noted that the ESTX contract is a bit smaller, and has higher margin requirements than the ES. You are absolutely right about the advantages of IB, too.
Moo: They don't publish their rates because that way you have no idea where to start your negotiation. The more they can get you to pay for a R/T the more they make. I was amazed at the variation in available rates when I called around a few years ago. Call one of the firms and see what you can do. Use that best offer as a place to start with the next firm on the list. You are not going to get a rate that will put any of them out of business. If there is a firm you like the look of, I'd call them 3rd or 4th. You'll have a better feel for what rate you can ask for and get by then. Be sure to look at platform and data fees as well. I don't need to tell you that you are paying IB nothing for data or the TWS. Some firms will also negotiate platform costs. Have fun and good luck. Jack PS - I'd rather see you stay with me at IB because we need long-term beta testers for the TWS.
Jack, I guess you are right. Maybe there is too little competition in this business, or perhaps too many customers who don't care what they pay. Just as I didn't still a few weeks ago. I have been asking for something close to $3, but the best I receive can hardly compete with IB. So it seems that for the time being I will just stay with IB, and try to trade more in ESTX than the e-minis. Platforms don't matter that much. Whatever gives the lowest total cost is best. TWS is good enough, but I'm worried they are adding too many features that I have no need for. Definitely don't want to test any new beta stuff!