Some commision realities about IB and Tradestation

Discussion in 'Interactive Brokers' started by jay123, Oct 24, 2003.

  1. def

    def Sponsor

    Ofcourse we take into account the cost of ECN and SEC fees when with our pricing. But most firms charge these fees and as you should be aware, SEC were raised recently and we didn't raise our fees. What I was trying to get across is that I don't see anyone complaining about that and if we wanted to be deceptive, we could advertise a lower fee and tack on those prices in the small print.

    My point is that you make it sound like we are trying to pull the wool over clients eyes. We simply aren't. There are order types available to get you a complete fill and I think your thread is trying to make something out of nothing.
    #11     Oct 24, 2003
  2. jay123


    I am saying that after all this posting that I am an IB customer. However I use them for trading futures only. In that respect they are truly competitive in terms of pricing. In fact probably one of the best around without constraints of having to do minimum volume per month. I do use another broker whom I won't mention because I don't want to be told that I'm a "salesman" pushing for that firm. However, I will say that the firm I'm with uses Realtick and I negotiated per ticket charges at 7 per trade. Ecn Fees are rebated back at .02 for providing liquidity on INCA, ISLD, or ARCA. (Regular ECNS fees apply of .003 .003 and .003 respectively for taking liquidity) (Now this would tell you that I am larger lot trader) The point is after all is said and done, that for a small lot trader IB is truly the way to go. In the end absolute commission savings would still be greater if all you traded was 100-700 shares per trade with IB then if you traded with my broker. However once you reach the higher threshold IB is no longer that alternative place to trade stocks through if you were only concerned with some sort of commission savings (not taking in to account multiply other factors etc etc). I will say once again that IB does have an incredibly fast direct access platform and I think its performs wonderfully. Plus a universal account is a remarkable achievement. Furthermore, in items of where commissions stand in this day and age as to where they were when I began trading a decade ago, anywhere you trade now is 1/6 the price in terms of commissions. However, I am trying to point out mathematical facts that are built in to IB's commission structure that are not readily apparent.
    #12     Oct 24, 2003
  3. jay123


    Def your focusing to much on the metaphor "pulling the wool over clients eyes" as a reason to negate my original post. Lets say I negate that statement. Does my post now have more credibility to you? Either way your right you did not increase your price when SEC fees went up this is true and I will acknowledge this. What you just said is a mathematical fact as well and I agree with it. In this regard your firm decided to remain with its costs and not pass along adiditonal mandatory fees to its end customers. Agreed.
    #13     Oct 25, 2003
  4. kowboy


    Please tell us who you use for an alternative broker. I promise I
    (and hopefully we at ET) won't complain about you pushing your broker. But do you really pay only $7 if you scale in and out of a trade, or do you incur the 7 bucks each time you change a limit order and scale in or out with a smaller size order?
    #14     Oct 25, 2003
  5. arnegr


    all scams
    #15     Oct 25, 2003
  6. jay123


    I do not incur additional ticket charges when I modify the price of an order. However, as is stated back and forth between myself and Def even my broker has a commision model that it has developed that handily adds in a built in profit in order to keep it's business alive. Its good business, its called capitalism. I just felt that when it comes to IB and to TradeStation...and let me say its more TradeStation than IB that really advertises their "cheap" commision structure as if they are just giving away the food off their plate. Its all in the marketing, and as we know marketing is another form of corporate deception. Madison Ave at its finest. Lets put it this way, I am no saint and if I ran a broker/dealer I would be doing the exact same thing. However, in this case I dont so I am on the other end of the sprectrum and will speak against it. Its like saying that an IB or Tradestaion employee when going to buy a car will say to a salesman hey just give me the sticker price because I know thats your cost and I dont want to take food off your plate. NO they would haggle down knowing what the true costs are of a car dealer after manufacture incentives and rebates. Does the car dealer get mad and make you feel bad about yourself for haggling? Of course they do its their job to keep the dealer costs up and profits maximized. Should you be ashamed to hagggle and save money from the dealer because of this no way! In the end the dealer knows that for each educated consumer there are 100 suckers in the end that will pay sticker price. However with the advent of the internet I can now just compose a post like this and in one click of the submit button I can reach 18,000 people and let them know what I think. Internet its a crazy medium.
    #16     Oct 25, 2003
  7. jay123


    USD 0.01/Share USD 1.00 For up to 500 shares

    USD 0.005/Share Incremental shares > 500

    USD 0.003/Share Additional API fee for equity directed

    As you can see from what I copied from IB's website they add on .003 as additional fees for those that execute with equity orders via an API. Example Ninja Trader or Button Trader or even Esignal. Thus now the true costs of doing business are a bit higher than I thought for those who would rather use a more accomodating interface than the barebones one provided by IB.
    In other words this would mean that each 1000 shares gets tacked on 3 bucks, which is the going rate of any trades done through ISLD, INCA, and ARCA. Keep this in mind as well fellow traders as I know many of you are using these platforms to place trades through to IB. These costs also add up fast. No diifferent than an ECN fee.
    #17     Oct 25, 2003
  8. A whopping $2.50 extra when you change an order??? An extra charge I might add which could have been avoided either with a market order, or a limit order with the limit set somewhat higher above the existing offer.

    Ever had this one happen? Put your trade in at the offer....get filled on a quick 200 shares, and the price moves away immediately, and not just .01 away, to a point where you don't want to make the trade. IB charges $2 for the trade. I don't see how they make a dime on this trade personally. But in any case, there are any number of places with a minimum ticket the one you mention for $7 (or higher).

    Not sure really what your point is here. Chances are if you compare IB with many of the other competitors, it's cheaper....ESPECIALLY if you know how they work their charges, and simply alter your trades to fit their system. But if it is not, then you should change.

    Personally, I'm thrilled with the commission structure, along with all the other advantages that IB offers.

    #18     Oct 25, 2003
  9. Now this is a surprise ! I expected you to complain about futures commissions with IB. Didn´t you notice that with sufficient volume you can get lower commissions somewhere else ? BTW, you´re not one of those 1-lot-traders, are you ?

    #19     Oct 25, 2003
  10. Why don´t you just accept the definition of an order ?
    Modifying an order means:

    1) Cancel old order
    2) Submit new order

    So what ?
    #20     Oct 25, 2003