Viable (not prohibitively high commish) alternative 2 Interactive Brokers 4 Hang Seng

Discussion in 'Retail Brokers' started by Full Tilt, Dec 14, 2010.

  1. I've been trading the Hang Seng (HSI) more lately and have tried to find an alternative to Interactive Brokers- to no avail.

    OEC now has the HSI but their commissions are more than 3x IB's. $10 USD RT plus 42.40 HKD (~$5.40 USD) exchange fees (even though the ACTUAL ex fees are 21.20HKD- wtf).

    So, it's about $4.90 USD all in RT with IB, over $15 at OEC. I have found the same disparity with Phillip, Saxo, MF Global (who it appears has dropped the contract), etc.

    I cannot imagine traders in HK are paying $10-15 USD RT, but i can't find a broker even close to IB's rate, and often they don't even have DOM.

    Does anyone know a legitimate alternative? Last week's outage has me looking for, at a minimum, a backup to IB in case IB goes down, but would ideally like to find something better than IB, but there is no way i can add 7-10,000 USD per month in additional commission- it would destroy my P&L.
  2. Roark


    This is like the holy grail. It doesn't exist.
  3. Search the site: the question has been asked.

    OEC were the great white saviour - guess what - it appears they are not.

    I have traded HSI with IB for over 6 years. Last weeks outage was far worse than anything else I've experienced. The prior biggy was a hurricane outage where some people missed the warning so for about 6 months afterwards I watched the HK weather. The only other significant outage was a flood that took out my local communications.

    Its a lot more likely that you will have issues with your ISP or something local to your home/office than that IB will have that level of outage.

    Jeez ... have you watched hsi collapse this afternoon. Open 23220 ... low 22828. Thats 392 points in first 6 minutes after two days of irritating coiling.
  4. Serenity


    Try Berkeley futures?

    How long was the IB outage on the HSI last week?
  5. It was over an hour.

    I am talking to Berkeley this morning. I doubt they'll be competitive with IB, but hoping to be proven wrong.

    My conversation with OEC was maddening. The guy insisted (and "confirmed" with his clearing co) that HSI is 21.20 HKD a side and that is what they charge in addition to $5/side. I cannot imagine how a HSI trader can make money at these rates unless they're position trading it (good luck with that!). He insisted they have many big traders who think the rates are good bc they're executions are much better. um, ok. Also, he said no asian markets ahve negotiable commission with OEC. NEXT.
  6. Thanks. Yes, i searched but i was hoping somebody new might have a secret to share. I assume, given your name, you're in NZ. Where do you think the bigger retail traders in HK trade through? All the HK brokers are very high. IB always has good rates, but with the HSI, it's by a factor of 3- seems pretty odd that the rest of the players are just handing IB all the high volume traders on a platter and not trying to compete.

    Maybe the answer is that IB makes so much money taking the spread and/or trading on the other side of me (whatever you want to call it) that THAT is the real money for them, not the commissions. So many times I'll put a limit outside of the spread to make sure i get out and the B or A disappears immediately and I get the limit instead of the 2 or 3 points above i expected. It happens enough that I think that is IB making money on me. I'm not sophisticated enough to know if that is true or not, but it sure does seem that way.

    I will open an account somewhere with some level of funding to allow me to get out of at least 3 contracts in case IB goes down.
  7. def

    def Interactive Brokers

    Complete and utter BS above. IB doesn't take the other side of your trades. Orders to the HKFE are routed directly via our own connections and our speed is exceptional. I call a further BS to OEC stating they can provide better executions on the HKFE than IB.

    To make things more clear:
    IB's orders are routed via a dedicated API that is separate from the API's of it's affiliate Timber Hill. The number of API's we have is scalable and if there were a need, as a member we could order additional APIs. Orders sent are directly routed to the exchange immediately upon transmission.

    As for what you're describing above, you've got to realize that the HSI future does not have a deeply liquid book in terms of size. The top bid/ask sizes are often only a few contracts. You're competing for that slice of liquidity against many automated systems and hundreds if not thousands of other traders at times it seems when the market is moving quickly - ie. you are stopping yourself out. The fact that you're getting fills and not missing them is testament to the speed of the order. If on the other hand you are placing these orders and most often find the market coming back at you for an immediate loss, perhaps you can just try lifting the offer and see if you get filled at your price.

    And a final note and answer to your question. why are our fees lower and why am I certain about our connectivity? It is a simple answer. We are members of the exchange and self-clear.
  8. Serenity


    Def is right, HSI is not that liquid at the best of times let alone when you need it...

    For scalping you need depth and the best market in Asia for that would be the KOSPI index.

    Good luck.

    Berkeley futures are negotiable so don't be fazed by the intial rates they will come down based on your volume etc...