Looking for another broker after Freetrade closes.

Discussion in 'Retail Brokers' started by MRWSM, Mar 30, 2005.

  1. MRWSM


    Would like to hear some suggestions of where to move my account since Freetrade is closing. IB would not work for me since I trade large amount of shares. Would like a very low flat fee, or monthly service type deal with unlimited trades.
  2. def

    def Sponsor

    I wouldn't be so quick to write off IB. Firms that depend on selling order flow may not provide the best executions. 1 penny on 5000 shares is 50 bucks.
    Also fyi, IB caps commissions at .2% of trade value and doesn't charge SEC fees.
  3. MRWSM


    I'll look into IB but seems expensive when moving thousands of shares unless you guys get filled a penny under the bid and a penny above the ask, LOL. I was consistently getting level II numbers on my market order fills, so hard to see the benefit at IB. Might consider trying the nq futures.
  4. That's why they're closing, there's no money in it. Why would anybody charge you $0 unless they're being paid under the table? Else, the'll just go the way of freetrade.
  5. MBT
  6. I have accounts at both freetrade and IB. IB is great for scaling in and out, but lousy for big share scalps. Frankly, in the retail arena, freetrade was really the only place where someone could make a net profit on a penny with a 1,000 share round trip. Izone, at $5 per trade, effectively destroys that capacity. Regardless, for a trade of more than 500 shares, Izone will still be cheaper.

    Execution is important, but so commission. 5000 shares at IB will run $27.50 -- round trip is $55 -- vs. Izone at $5/$10.

    If IB really wanted to increase its market share, it would revise its commission structure to accomodate both types of trading, by capping individual trades at $5.

    For now, I'm just gonna continue to hold my two accounts, and look for some other firm who wants to give me a better deal than either that I have now.
  7. Yeah, in theory you could make a profit on a penny, and I did so on occasion. However, the slowness of the interface (even using a better front end) and the lack of routing, many times cost you that 1 or 2 cents. Unless you were getting GREAT fills , I didn't see the big benefit to Freetrade.

    Maybe trading huge lots of low priced stuff, but thats about it.
  8. def

    def Sponsor

    w/o looking, I'd be fairly certain that izone is selling the order flow. in your example, if you can get a penny better per side (this will naturally not occur on all trades) you will pay a hidden $100 fee.

    As for market share, I'd rather stay in business than do 100% of the market for nothing. We also believe our routing is better and worth the price - epsecially when you consider that SEC, ECN and all other fees are included.
  9. Well, that's what I was doing...trading huge lots of low priced stuff.
  10. 1. Sometimes 1 penny is all you can get, and it doesn't matter how good your execution/routing is or whether your paying for order flow, because the MMs and specialists are gonna run or tank the market against you without reference to any of those anciliary issues.

    2. I doubt that Freetrade was losing money at $3 per share. They were probably losing money on a whole bunch of people who were trading less than 21 times a month. Otherwise, Izone would still offer the first 20 trades for free and the remainder for $5.

    I think your cap on large shares at .2% of value is unreasonable in today's market, and I'll bet it causes your clients to send a lot of big volume trades that would otherwise occur through IB, to other brokers -- because it does with me.

    3. My other issue with IB is that TWS doesn't work behind a proxy server via http, so I'm stuck with using Webtrader in the office, which is basically saying forget about trading at the office.

    My experience is that IB is good for scaling in and out -- also good for having lots of products under one roof. But, I only trade equities, so none of that matters to me.
    #10     Mar 31, 2005