I believe ibkr is the only broker that gives rebates for adding liquidity for options. Does it apply for stocks too or just options? I am currently trading with Schwab and has negotiated lower rate than standard 0.65$ rate. I believe no other brokers offers such rebate accept public.com Ibrk has min. 1$ compared to schwab which has only 0.65$ which is kinda high so options rebate ..is it really worth moving to ibkr? My average volume is about 100 contract a day. @Robert Morse does lighspeed has rebates like ibkr?
TDA, prior to the merger finalization allowed negotiating for lower rates on option commissions, for those trading some volume. Your trading (100 contracts/day) would have been adequate for that. I don't know if Schwab would do the same, but they have grandfathered the TDA negotiated rates when I was transitioned. You may want to ask Schwab about lowering their rates. (I know nothing about IBKR or rebates however).
We offer the option to be subject to the Option exchange maker/taker schedule on single leg option orders on Sterling Trader Pro, EZE EMS and CBOE SILEXX in addition to a SMART route that avoids most of them. Our starting rate is $0.50/Option plus regulatory and routing fees. 100 contacts a day is about 2000 per month, which gets you down to about $0.35/option after you hit that level in any calendar month. https://lightspeed.com/pricing-fees/options. Unlike IBKR we do not make you earn your tier each month.
100 a day even round trips isn’t much volume. I thought you were doing 1000 to 10,000+ contracts daily.
1. I am not sure what you mean..do you offer rebate to add liquidity or not? 2. if we use your free lightspeed platform ..you don't offer liquidity rebate? 3. If we use smart route we don't pay 0.35$ routing fees. otherwise we pay 0.50 plus 0.35 so 0.85. in other words if I want to be paid for adding liquidity I have to pay 0.85 correct? 4. Also until I hit 2000 contracts I pay 0.50 and above that volume it will start charging 0.35 but for the first 2k it will always be 0.5?
10,000+ contracts daily....maan, that's like winning the Super Lotto everyday if an individual trader can nail the market movement foresight. Mouth watering to fantasize about that volume.
This is the best I can do in a public forum. #1. I already told you which software we do. Option fees are reconciled after end of month on those, and you can choose between directing orders and SMART. As a reminder if you remove liquidity with choosing an exchange, it can get expensive. #2. For most retail accounts, no. #3. The $0.35 add on for option orders not using the SMART Route only applies on Lightspeed Trader and you will not be subject to those direct fees, as we do not want a manual process for all Lightspeed Trader retail customers. If you want to get paid for adding, you need to choose another trading software. #4. You start at $0.50 and can request a lower rate after each tier. I have the authority to start you at a lower tier if you show me similar volume at your current broker. Negotiated rates are on a case-by-case basis.
Ok so here is what I understood so far. All brokers encourage you to use their SMART route (non directed routes) for which they don't pay liquidity rebate to clients. IBKR openly shares how much rebate a client can get per exchange. for example BATS provide $1.05 for each non penny pilot options - https://www.interactivebrokers.com/en/accounts/fees/BATSoptfee.php so basically not only you charge per contract but you also keep that liquidity rebates form exchange which you don't pass on to clients. So even though all brokers say oh we only charge 0.65$ or 0.50 per contract - actually you are charging much higher i.e. if clients route thru bats - your actual per contract charge is 0.50+1.05 = 1.55$ (by not paying those rebates to clients) Did I misunderstood anything in above?
IB's SMART route is different than most. Many of my customers want to get in and out fast. They want the ability to Buy on the ASK and Sell on the bid. If you do that on BATS, you are charged $0.85 today for non-penny options. In fact, most exchanges charge you to remove or to reroute the order to option exchanges with liquidity. So, what you have left out is that our smart route to a DMM avoids that, saving money for our customers. Your statement below is not accurate. In addition, on Sterling Trader Pro, EZE EMS and SILEXX we offer both. That way customers that prefer to add liquidity can also get paid or use the SMART route to avoid those fees. It is hard to explain market structure this way. Let get back to your question and avoid your math, which is not correct. Using IBKR, you can add or take liquidity and be subject to option exchange fees. We offer that too, but to retail customers not on Lightspeed Trader. What we and many Retail brokers offer that they do not, is a smart route to avoid them.
I understand if you are not careful you may end up paying liquidity related charges (instead of making you might take liquidity) so in that sense my math can not be always accurate but for the most part this is a hidden fee most retail brokers don't want to really disclose to clients. For third party software you mentioned you are charging per month plus market data which is highly marked up. So yes you allow a experienced clients to earn liquidity rebate but you take some if not all that rebate in software fees. You said - What we and many Retail brokers offer that they do not, is a smart route to avoid them. ...just to clarify are you saying lightspeed and other retail brokers offer smart route to avoid maker/taker liquidity related stress(and get in and our fast) but ibkr does not offer smart route?