I am in no way bashing IB rates and have no agenda. What a wild imagination you have. Get off the crack pipe. What I was trying to determine is whether IB is suitable for swing trading a portion of my assets. All my trader friends tell me IB has low commission rates. Everyone here recommended in the broker ratings high marks. I wanted to know what was so special about it if I traded decent lot sizes with say Ameritrade on VERY LIQUID ISSUES versus IB. Your first post ruined this entire thread by insinuating and mocking the post. You had no business doing so if you didnt have the answer (of which I see you don't answer many threads but just jump one to one giving away your supposedly "expertise" of which I see none). You could have responded more nicelyy. Instead, your post set a tone, a wrong one on this thread that chose to piss on others and steered the conversation away from the original topic. This is how stupid and wasteful your 2 minutes of brain fart was. It is what is very wrong with EliteTrader and why I choose to use this site less and less. If this is the way you want EliteTrader to run too in the future, continue to do so and this entire community will read like a fucking piss fest and garbage site. I now know that when you have a question to ask on here that may be within my level of experience, that I won't bother to answer. Realize, your disease spreads and makes this site read like shit. When Steve_IB's figures didnt match mine I questioned it. He made a small error in the criteria I was specifying. Anything wrong with me questioning that? The difference was subtantial enough to affect my profitabilit per turn. His last response made it much clearer and I thank him for that. And for your information, I OPENED UP AN IB ACCOUNT. So you can take all that totally ridiculous crap you are spewing and learn something from the way you think and communicate with people on here. Jesus christ. Some of you guys really need to get away from the terminal and get some fresh air. Its seriously impairing your perception and judgement! Is this how you interact with fellow traders in public? Yes I do trade futures and have been for the past 6 years. I sweep all my winnings into my equity broker accounts I held since 1985. All my equity brokers that I have used HAVE NEVER HAD ECN rebates. Is there anything wrong with me not knowing about ECN rebates if they didn't have it? So no, I did not understand ECN rebates because I never had a reasons for it. Now I do understand it and can make better business decisions from it. So whats so wrong with that? Last night I created a spreadsheet that shows me all costs including ECN fees, regulatory fees, etc to let me understand both unbundled and bundled costs. I ran some of these figures by an IB rep today to my satisfaction. I had to, because no one person in this community had the answer except for the IB rep who just happened to show up! To those who did answer with good intent and with useful information, thank you. For some of you others, wow, really look at yourself and ask if you are being helpful or just a fucking jerk.
Are you saying IB's customer service is poor? Or are you trying to say that customer service is important and is less priority than commission rates? Sure customer service is a criteria. But not priority for me. Why? Because that is newbie thinking. Product offering comes first, price comes second, service third. No operator is going to do business with just one broker. For example, over the years I've learned to make sure I do business reducing my exposure to that kind of crap. I use several future brokers, several wealth management accounts and now 4 online brokers. Each has a single purpose in mind (retirement, swing trading, hedging, etc.) and is there for backup. I spread my wealth and distribute it across financial service providers. It works for me and I'm successful for using it. I choose my weapons carefully and I'm fucking shrewd about it.
Unfortunately, what gets lost in the shuffle is reading the question and answering it. Most just want to chime in for any of the following purposes: 1) To increase post count 2) To sound like an authority 3) To piss on someone 4) To answer the question I always felt this site should charge to force better quality content and social networking interaction. That will weed out the unnecessary posts like we have seen here.
futstrader111, Let me address add/rem liq rebates and fees, DMA (direct market access) trading, via "smart" route trading, via various brokers/dealers. Look at this way, the market is basically us + little black boxes which is program by people. MM (market makers), traders, speculators, institutions, retail, etc.. with ONLY ONE GOAL to WIN. Markets need liquidity to function. If it doesnt have any liquidity, there is no market, it will come to a halt. ECNs are electronic markets and would need the liquidity to function. The more liquidity the better. Ask yourself this if you build a market (physical or electronic), and you are the only guy in the room, how are you going to make any money? It doesnt matter whether if you have lots of money or lots of goods, you are the ONLY one in there, you cant make money. Agree? So how would you attract others into the room so you can make some money? ANS: By adding liquidity and by paying them for it Now that good as I have lots of people in the room with me to transact, cos' when other market participants have the goods(positions) you or someone wants, they have to finds the place to make that transaction correct? So when they come and transact, you will charge them a fee for that transaction to happen (don't be confuse of this fee as a commission) it is NOT. How would that transaction happen? ANS: When some is willing to buy (bid) for it at a certain price When that happens an order is executed aka Called order matching. So that is basically the add/rem liquidity function of each marketplace. Thus more marketplaces eg. NYSE, ARCA, ISLD, EDGX, etc.., more competition thus bringing rebates higher and fees lower for add/rem liq to market participants. I hope this clears your understanding of the add/rem reason behind all marketplaces. So how is this add/rem liq benefit the broker you are using? Couple of ways, 1st charge you a commission, which they feel is fair and able to profit from. Then broker now must do is go out to find a marketplace to place and execute the order for you, in turn becoming a market participant on behalf of the client. Now this is the tricky and exciting part. This is called ORDER FLOW. Which marketplace? You might say the one w/ the highest rebate and lowest fee for add/rem liq, correct? This is NOT ENTIRELY TRUE!! Let me explain, beside all the rules and regulations that brokers have to abide by, they have the free choice to do business with anyone, So as any broker business would do, who would you bring your business to? The one that is willing to pay me the most money to do business with, correct? So this is where PAYMENT ORDER FLOW comes to play. in order to attract business to your little marketplace, you pay whoever is providing liquidity. The little marketplace needs liquidity to function, broker needs a marketplace to place and execute orders, volia (remember liquidity is king, no matter which way you slice and dice it. long or short). So you must be asking yourself, why then am I getting a rebate or fee charge for add/rem liquidity? Take a step back, and try to understand the picture first. Draw it up if it helps. Ready, so when a broker charges you a single trade ticket commission eg. 9.95, 5, etc. per trade ticket of X amount of shares or contracts, the broker is actually being paid to route your order to the highest bidder for that liquidity or any contracts signed between marketplaces, market makers, and brokers. This is already has been factored into their fair commission cost they are charging you with the single trade ticket. Remember there's no free lunch. So now you asking, what abt the add/rem liq rebate and fees pass to me as the market participant. So why is there is 2 types of per share tickets on various brokers and such, eg. IB (interactive brokers), etc.. ANS: "Smart" routing and "Smart" routing w/ rebates and fees So the smart routing is basically taking your order to the highest and lowest bidder for that liquidity agreed upon between them and then onto various NBBO (national best bid offer). This is basically also known as NON-DIRECTED orders. I hope the picture is getting clearer. Non directed orders are public information and broker/dealers have to disclose that thanks to our friends at the SEC. Called SEC 606. Also brokers are abide by law upon request to show order routes for all orders place prior to 6mths. So what abt the "smart" orders for add/rem liq, that where it become tricky. Cos' the brokers/dealers are also getting payment order flow via that smart route, while you are also getting rebates and fees charge for liquidity. However, if you choose your own exchanges to route your order, DMA. you will be charge a higher commission fee EVEN though you might route to an exchange where the broker/dealer will receive a payment order flow from that exchange. Thus the reason for the difference in price between lower "smart" route order w/ rebate/fees and higher DMA orders w/ rebate/fees I hope you understand this point clearly. Cos' think about it, broker has to protect his own piggy bank, eg. what if you route once to where he is friends with (payment order flow), but then route another order to his enemies (no or LESSER payment order flow)? The key word here is LESSER, cos' there could always be possibility broker still receives payment order flow or have other benefits or affiliations no matter order flow is directed or not. ee. Goldman Sachs and such which has affiliations throughout the major ECNs and marketplaces, so either way your route your order direct or via sigma x, smart, etc...they win. So what is the advantage of direct orders to a specific exchange, beside rebates and fees charged, if all else is equal such as speed as such? IMO it to find opportunities and disparities in terms of better bid/ask and take them before anyone else! So with all this understanding of liquidity and marketplaces, I hope you can understand why dark pools work so well. IMO there is nothing wrong with them in terms of functionality, except they are dark, meaning no physical person that I know of can see the liquidity, if someone is able to see it, PLEASE LET ME KNOW. Cos' I want to see it too. The only way to see the liquidity is the routers and algo that run by computers designed by people, to match orders and add/rem liquidity in the dark pool. I dont really want to go into dark pools for much now as it will open another can of worms, and debates. But basically, dark pools are private and can only be access via several platforms such as Rediplus via Sigma X, etc. And I will leave it as that for now. So understand this, smart routes via any broker doesn't mean it is routed to the public exchanges, it could, but it also could be routed to various market makers, such as ATD owned by CITI, NITE, Citadel, TMBR owned by IB, SLK owned by Goldman, etc... before going to the exchanges So which is better per share, per share w/ add/rem liq or single ticket order? There is no straight answer for that. But I will say this, IMO per share orders I feel gives me a sense that my orders are sent via their respective routes then to the exchange, thus giving me faster fills as they are more market participants along the way, I cant quantify this with a stopwatch but thats how I feel about it. Can I get a better price from my limit order via this way, maybe maybe not, usually removing liq will give you a better fill, but by adding liquidity you usually don't, I have yet to see better fills by adding liquidity because you are already the best offer out there, think about for a while. However, depending on the broker and which smart routes, this in turn COULD produce 2 things, orders are seen first via that "smart" route, which could also be market makers, then to their respective exchanges, thus allowing market participants to make decisions ahead of what is going to be posted at the respective exchange, somewhat of a flash order (another can of worms). But I do believe SEC has already propose the ban on flash orders but I am not sure if it into law yet. The other thing is that the market participants at the exchange can also jump in take your order, aka known an internalize matching of orders somewhat of a working of a dark pool, except the MM books at some exchanges are public. Either way I look it, if I have made the decision to place or execute the order via the smart route, my only concern now, is to work the order (what I should do next) and make sure that I can got the price I am willing to execute at or better at that given moment in time. Whereas, if I go a single trade ticket route, eg. the Ameritrades of the world, my order will try 1st to execute internally then to the exchanges. For this one major reason, I pay the privilege (premium) on per share tickets rather than single trade tickets. Another reason is the scale in out of orders, another reason is to take offers and hit bid on various exchanges faster, another reason is the add/rem liq rebates and fees, the list goes... sure everyone wants to save on commissions, even myself, but it shouldnt dictate how one should trade. Order routing, execution, speed, is more impt, slippage is a no no, but it does happen, the less the better. Commission to me is part of doing business (trading), how much I willing to pay is what I feel is fair for what I am getting eg. routes, products, customer service, reputation, platforms, etc... Note you also check your clearing and settlement reports from your clearing firm of where your trades were executed. So which way to go, you decide and what you feel is fair and comfortable to you. I hope I have help in some way. If you have any other questions, let me know. I am still learning and growing everyday. Happy trading
Great post...but be assured the OP still has a grudge against IB as stated in his first post. Here is another thought that the OP will not consider......... Brokerages exist in a MARKET. YOU have the ability to determine the best value by which participant you choose to do business with. Rocket science cowboy.
thanks guys I just wanted to help. I too am shopping around, to see what my options are out there. What do you guys think of IB, in terms of execution, speed, datafeed, customer service, stuck orders, slippage, ACH withdrawals, etc.. via "smart route". What major issues you occur? For stocks, options, futures? Thanks!
Needed customer service once on a TWS question. Got a response on the help chat in about 20 seconds. He was somewhat a smartass, but nothing more than a NY cabbie. ACH...no prob. Execution....instant on multiple contracts or hundreds (+) shares. Good fills, minimal slippage. Charts and desktop management can be iritating, but Ninja covers deeper needs (when needed). I don't trade with indicators.
LOL and you speak for me? Look everyone, a control freak. What a revelation! He who states the obvious! Man, you are THE authority figure for EliteTrader! I must come to you to answer ALL my questions! Its amazing how many newbs are on here who think they are "one of the boys" just because they put in a few years in front of the terminal.