IB Lowers Futures Commissions.

Discussion in 'Retail Brokers' started by PatternRec, Apr 16, 2010.

  1. PatternRec

    PatternRec Guest

    Flat Rate: USD 0.85 per contract plus exchange and regulatory fees. IB Flat Rate includes IB Execution, Clearing, and Carrying Fees.

    Volume Tiered: USD 0.25 - 0.85 per contract based on monthly trading volume, plus exchange, regulatory and carrying fees.

    So using ES as an example and flat rate structure:

    .85 + 1.14 exch + .01 Reg = $2RT

    Even lower using the volume tiered structure unless you hold a position for 10+ days as the carrying charge is .10/day/contract.

    Wonder what the other futures houses (Like Global, Mirus, Advantage, Velocity, amp, etc) will do in response to IB.

    Might have to open an IB account again.
  2. What are their intraday and overnight margin per contract?
    Lets say ES, GC, CL.
  3. PatternRec

    PatternRec Guest

    Intraday margin is 50% of overnight. Overnight is set by the exchange.
  4. Does the 10 cents per day per contract carrying charge apply to both the Volume Tiered schedule and the Flat Rate schedule?
  5. Blotto


    Probably nothing.

    The majority of costs (for the average customer) will be exchange and clearing costs.

    The margins for these other brokers are razor thin. You are talking pennies per side in comms - the rest is exchange, clearing and NFA. The brokers aren't really in a position to lower costs much further. They have fixed costs for looking after your account etc.

    IB on the other hand is self clearing. Almost everything is electronic and they trade massive volumes. Cost savings for larger traders come in the form of better clearing relationships (volume breaks etc) and buying / leasing exchange seats. Brokerage is one of the smallest costs.

    My last full month, I paid $5k in exchange, clearing and NFA fees, and only $400 in brokerage. The TT fee was more than my commissions.

    The biggest nuisance for me is the small tick value contracts. NQ and 6B in particular. Consider the costs / tick value / average range on WTI and TF at ICE, FDAX on Eurex etc compared with NQ and 6B. You need to do more contracts to get the same exposure, and CME fees aren't cheap.

    Those costs are per side, so $4/RT. I currently pay less with one of the other brokers mentioned above and I do not have an exchange seat. IB has its pros and cons, but saving a few pennies on comms is unlikely to figure in for most traders.
  6. Dale Box

    Dale Box Velocity Futures

    well said.
  7. PatternRec

    PatternRec Guest

    My mistake. IB used to quote their commission on a RT basis. I assumed they continued this convention as there is no text on their site that overt said, "per side."

    Per side makes this a non-event. I'm currently and have been paying less in RT commissions, all in, with two other brokers.

    Oh well, nothing to see here.
  8. Tradism


    In fact IB raised its commission slightly in some places too. It removed the tier "1-300" and replaced it with "1-1000" tier.

    Commission is higher for unbundled plans in nearly all currencies for the first 1000 contracts.

    You pay 5 Euro/GBP/SGD more for the first 1000 contracts.
    10 swiss franc
    50 Swedish Krona
    50 HKD
    1000 Yen

    Unchanged for AUD.

    But you save 10 USD for the first 1000 contracts.

    Good news for US traders but bad news for non-US traders.

    This is a punishment to all non-US traders. Could IB please slightly reduce the commission so as to not penalize us under the new plan?

    For details, http://www.elitetrader.com/vB/showthread.php?s=&postid=2808907#post2808907
  9. For most traders the broker commission is still significant. At IB for the first 1000 sides for ES/NQ/YM 42.5% of the $2.00 total commission is going to IB.

    Even with the price cut IB's futures commissions are still too high. IB has plenty of room to cut futures commissions to competitor's levels as IB's brokerage business has a very nice pretax profit margin of 50%.

    As for the term "clearing fee" - if the "clearing fee" goes to the exchange it is part of the exchange fees, if the "clearing fee" goes to the broker it is part of the broker commission.

    Without namimg your broker (assuming you have a special deal) would you please break down your total fees per side for ES and FDAX.