I am a new trader. I day trade, typically around 6,000 shares a day. I would consider myself more of a scalper. I never add liquidity to the market, I simply take it. I buy at ask and sell on bid. And trade very quickly so I cannot worry myself over the routes. 1) Would it be more beneficial for me to go with the fixed 0.005/share or tiered 0.0035/share? 2) Once I increase my volume and can receive a tiered fee of 0.002/share, would this be more beneficial or fixed at 0.005/share
If you are always taking liquidity, go with the fixed. Worry about you needs at higher volume, later. Focus on making money, not the small commission difference. You will miss trades being concerned.
Thank you for your response. So just to clear things up: 1) Are routing fees the same as exchange fees? 2) If I go with fixed structure, I won't have to pay any exchange fees?
You pay no exchange or ECN fees and receive no rebates on equity trades. You will have access to smart routing only. You will only pay the commission of $0.0050/ share, with minimum ticket of $0.70 (So 100 share lots or less will cost you more than the posted rate). Then you will have to pay the SEC section 31 fees only on sell orders. IB lists on their website what that is at this time. It changes. Yes, you can consider routing and exchange fees as the same for this example. However, they are not the same. At another broker, the routing fee is what is charged by the member firm that routes your order to the exchange. Exchange fees are charge by the exchange. In this case, your clearing firm is also your execution broker.
Sorry, I just noticed that the min ticket charge for fixed is $1.00. What is your average order size?
Just so I can learn a little bit more, in your opinion, when is it more beneficial for someone that very rarely adds liquidity to the market to go with tiered vs fixed?