One more thing I just found out over at TOS..They dont charge anything(tiny fee)for closing options under .05....I was charged as much as 1.50 over at IB..And no,I do not work for TOS
I am thinking of switching from IBKR. I pay about 2.5% of my total portfolio in option fees to them every year. TDA would bring that down to about 1%. IBKR doesn't seem to offer anything right now, except lower margin rates, which I'm not planning to use. One thing I wonder about is the difference in execution quality between IBKR and TDA, which seems to accept PFOF for options. On IBKR, I almost always get fills at least 0.05 and usually 0.10 better than the NBBO. This makes up for the commission if we assume that I'd be unable to get this sort of price improvement on other platforms. Does anyone who uses a PFOF-taking brokerage get significant price improvements with SPX options? Are you almost always (95%+) able to get filled at a better price than the NBBO?
Also,IB cash sweep is apx 100 basis points higher than TOS... Im running IB and TOS simultaneously to check execution fills.. What's NBBO and PFOF??
If you are mainly trading SPX you are probably better off with TD as they don't pass on the extra exchange fees (up to .65). There is no rebate for adding liquidity here either. Fills should be the same with either IB or TD in the SPX. This is a single listed product so orders are sent into the exchange's electronic book so it shouldn't matter what broker that order comes from. With large orders, they may be sent to a broker's Par station first.
Do a comparison with TOS first before switching to be sure. Personally I do suspect IB's execution on option spreads is poorer compared to other brokers with PFOF.
I have been running Tos and IB sided by side for about a week now. I like alot of things about TOS,but my major concern is their execution/routing of spreads. IB appears to be far superior in that regard... If you split a market in TOS, the order is sent to the exchange with the highest bid/lowest offer. The order stays on that exchange,and does not get rerouted.An offer can come in at your bid price,and you wont be filled. I believe that is is theoretically possible for an order to trade thru your limit and not be filled. It is up to you to reroute orders to other exchanges.You also do not see the market on spreads in TOS..You see the offer if buying,or the bid if selling..They also show the mid with no size..What i dont understand is that any spread order I place mid market in TOS is hidden.It is not reflected anywhere in TOS.However,when I do place that order in TOS,and I look at the spread market in IB,my order is displayed with my size... Am I correct that IB reroutes orders to the best possible fill price? I believe I have seen executions where they trade legs on separate exchanges. IMHO,if you trade a ton of spreads in equities and arent a market taker you are better off with IB and paying the higher commisions.. As far as I can tell,its a bit difficult to monitor multiple option spreads in TOS..You wont know where the bid/offer is,just the mid... Any thoughts or feedback appreciated
I know that it is possible to set up TWS such that it appears IB gives crap access. I *suspect* the same may be said of ToS, but I do not know this. Further, with IB being a DMA, you are guaranteed swift and timely delivery of your orders to the market (outside of any crappy TWS settings)... What of ToS?? The last I knew, ToS sold for order-flow, but I have a vague recollection that they are now DMA?? Or DMA for some accounts?? IDK. At any event, the platform is certainly sophisticated enough to hide order-impairing settings... Conclusion is, without sitting down and going through all order pre-sets for both platforms and both brokerages, this would not be a worthy bit of research. FWIW, I am a 13 year IB/TWS *fan*. (For as much as I occasionally bitch. I mean, don't we all? I mean, isn't it, like, our *responsibility*??? Yeah. Yeah. It's like that... )
My experience with IB is opposite of yours. Single legged options are fine but anything more than that is horrible.
It's a pity that IB does not accept PFOF but their execution does not match that of other brokerages accepting PFOF. Theoretically is far off the reality.
IB accepts PFOF for their "Lite" TWS, which is thereby free. The older "Pro" TWS -- which is directed or SMART-routed, has long audited as delivering better trades than the market, by far.