Suprised that no one has posted that Lightspeed has raised all their commissions. Minimum commission is now $1.00 per trade. Stocks are $0.0045 a share up 12.5 % from $0.0040. Options are $0.60 a contract up 20% from $0.50. Futures are $0.60 a contract up 20% from $0.50. Not good for traders that a broker is jacking up commissions.
Like I've said before, they're nothing to write home about. Looks like IB will still dominate the landscape
I don't think this really matters... don't most people negotiate with LightSpeed? Unless you're the world's biggest piker bitch, this shouldn't affect you. Years ago I was going to open LightSpeed retail and negotiated a rate that was... well, *substantially* lower than the rate they're showing on the website. Much cheaper than IB. Much, much cheaper.
IB's commissions are cheap because they trade against your order flow. Ever heard of Timber Hill? You get what you pay for...
Agreed. Not a fan of IB at all. I use LS now. They're nothing to jump over the moon over, but it is what it is.
Buy a brain and do some research before you insult people.... Interactive Brokers internalizes order flow to a company they own called Timber Hill. Essentially what most retail firms do is set their pricing structure such that it is in your favor (in terms of commission and fees) to route orders AUTO or SMART versus sending direct to an exchange. By internalizing orders IB crosses your trade with other IB clients rather than sending to an exchange. What this means is that even though the stock is traded on NYSE for example, your trade will never reach the open market. Timber Hill has internal matching/crossing engines that take your trade first. This is why you will often see sub-penny price improvement when you route SMART. They front-run your trade and if you read the fine print your order is essentially handled as a Market order versus a limit to an ECN. IB/Timber Hill looks at your order first. If they don't like it or want to pass on the trade then they can flash it (they get paid for this) to dark pools, and finally if the dark pools pass on your trade then they send on to whatever exchange has liquidity. All of this takes time and costs you slippage which most people overlook because the commissions are lower. Also, your fees are lower but IB makes the spread by charging you the offer to get long and the bid to get short. So every order they cross internally they make the penny spread from their customers while having the ability to front-run your trade via price improvement.
Looks like they gained market share with their acquisitions and raised rates to recoup all the costs. I know a trader who just wired in his funds during the holidays, and the site had the old rate, so this is quite new. It will be interesting to see if Speedtrader keeps its rates at $.39 cents per 100 shares (.0039 per share) with no minimum commission per trade. However their site says it's $1 per option contract vs. $0.60 for Lightspeed.
you make it sound as if a large percentage of flow is being internalized, the #'s don't bear that out http://interactivebrokers.com/download/3Q_2010_IB_ORDER_ROUTING_REPORT.pdf well over 90% of stock executions are taking place on exchanges, could be significantly more but they only give top 5 venues. and there is the option of having fees/rebates passed through with the unbundled option and can direct the order flow to where you want (granted via the api they charge an arm and the leg to do as much)