Hi all, Hope someone can assist me. Am thinking about moving over to IB and am deciding between bundled and unbundled in terms of commissions. I trade about 200k shares per month. Folks at IB told me that if I trade less than 300k shares, I should go bundled. What surprised me is that they did not ask if my orders are market or limit (remove/add liquidity). Looking at their fee structure, it would appear that if the bulk of my orders were limit, then its a no brainer to go unbundled because of the rebates (and vice versa if most orders were market). Hypothetically even if half of my orders were market and the other half limit, it would still pay to go the unbundled route since it would still be less than the 0.005 bundled fee on average since I would get a rebate on half of the trades. Am I understanding this correctly or am I missing something? Thanks, Dex
You are right. The people at IB are not traders and can't really understand all that in a practical setting. That is what I use and most of my tradind takes liquidity. Sometimes I pay more but overall much less.
start with unbundled, accumulate days (a month?) of trades. convert them to a bundled fee structure and compare. it is easy to convert from unbundled to bundled on a piece of paper. most likely you won't like the bundled fee because it is a rip-off for most traders.
The bundled is good if you plan on holding for weeks at a time. Since you are trading 200k per month, I am guessing that you don't hold for long durations. Unbundled would probably work out best for you. Like the other poster suggested, try both and do the math for yourself and see which suits your style best.
I switched to unbundled for pretty much the reasons the OP states even though I have been trading well short of 300k shares per month. Last year my average commission per share was slightly less than bundled, but close enough to be a toss. The big negative was that the commission part of my statements is incomprehensible. The dailies did not add up to the monthlies, and the monthlies did not add up to the yearly. The yearly didn't even match the Form 1099. If you don't pay a lot of attention to your statements, maybe you won't mind. It bothers me, but I am still hoping for more favorable markets so I can increase my trading.