How is Interactive Brokers Cheaper?

Discussion in 'Retail Brokers' started by FutsTrader111, Dec 20, 2009.

  1. Someone explain this to me. Everyone says IB is cheaper. I can see in certain cases they are, but mostly not in others if you trade size.

    The bundled commission structure is $0.005/share. If you trade less than 2000 shares that is $10/side.

    Thats fine and inline with say Ameritrade's $9.99/trade with unlimited size.

    But when you get over 2000 shares, commissions get bigger:

    1,000 shares = $5
    2,000 shares = $10
    5,000 shares = $25
    10,000 shares = $50
    25,000 shares = $125
    50,000 shares = $250

    I do lots of limit orders mostly 5000-10000 shares and I do get filled on active, high volume issues.

    What benefits are there to using IB in terms of commissions if you trade over 2000 share lots?
  2. You would use the unbundle rate, it works best for you.
  3. gaj


    i find i get better fills on IB than most other platforms, esp. NON-direct access.
  4. Why would you not unbundle for the rebates?

    Jeeeesh, do a little reading.
  5. Rebates?Where is the discussion of rebates on their website?

    Under the unbundled they don't even discuss that.
  6. cstfx


    * known as ECN fees
  7. So lets say I have 30,000 shares of FAZ to buy and sell. Base pricing is 0.0035 (assumes I generate less than 300K volume/month)

    Then when it comes time to buy I add in 0.0018/share for NYSE exchange fees :

    30,000 * 0.0053 = $159

    Now when I remove liquidity commissions are (after NYSE ECN fee/rebate):

    30,000 * 0.0025 = $75

    Thats $234 in commissions round trip.

    How is that less than $20 round trip under Ameritrade?

    So what is the advantage of trading a liquid instrument under IB? I just don't see it other than if Ameritrade gives me crappy fills (which it hasn't). I get no slippage because I'm limit ordering. Even if I break up the order in 3 chunks of 10,000 thats still only $60 round trip.
  8. Just run the numbers and do what works best for you.

    If a trader trades 1000shs of GOOG all day long then use a per share broker.

    If a trader trades 50,000 of F all day long then then use a fix ticket broker.

    This is not rocket science...
  9. IB is great if you trade small size as the commissions are way less than a regular online broker. But when trading size, I don't see why anyone would want to pay 400% more on commissions.
  10. What about futures commissions?
    #10     Dec 20, 2009