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Jason W

Be aware that Interactive Broker's actual commission is way more than $0.0035 per share

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While doing reviews for this week, I notice that my commission is a lot more than I expected. 

Here is a snap of my trades and commission on Friday. 

You can see the first 1000 shares i bought was charged $6.70

second 1000 shares was charged $3.70

third trade for 2000 shares was charged $13.14 !!! 

I'm not sure why the first trade was charged so much more than the second one. Those trades were made 3 seconds apart. 

The average commission on those trades are more like 0.006 per shares or $6 for 1000 shares rather than the 0.0035 like they advertised. 

I doubt interactive broker was over charging me particularly. And while the fine prints at the bottom did say its 0.0035+fees, I  think this is still very misleading

and I hope new traders are aware of this. 

 

Carlos if you see this post, can you tell us what's the actual commission on SpeedTrader ? It says $2.95 +fees. The question is how big are those fees ?

At interactive brokers, those fees are almost double of what they advertised. 

 

interactive broker charge you more .png

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I've noticed the same! It really depends on the stock, liquidity at that moment, etc. @Lee W knows how to  display regulatory fees separate from the Comm/Fee in the IB report. I believe you need to create a custom report.

Examples from Friday:

GSK bought 200, Comm+Fee: 0.74, per Share = 0.0037
MU bought 400, Comm+Fee: 1.47, per Share = 0.0037
SKX bought 400, Comm+Fee: 2.32, per Share = 0.0058
SKX sell 133, Comm+Fee: 0.54, per Share = 0.0041

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It would be very helpful if we can display regulatory fees separate from comm/Fee, then we can know how the fees are charged and why some trades cost almost twice as much as other ones. 

Thanks man !!!

I will ask Lee tomorrow. 

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per IB customer service..."fees" can vary quite a bit depending on liquidity, routing etc. I believe the same applies to the $2.95 pricing with ST where fees are also a separate ticket item. I was told you can switch pricing structure "on the fly" with IB so you should probably tinker around while you are at IB to find out whether the 0.005 pricing (incl. fees) works better for you. I would be very interested to know more about this. there's been a few discussions about this elsewhere on the forum.

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Are we talking about ECN fees? They are separate from comission that brokers take. You can get them even in DAS simulator. Go to top bar "Trade" -> "Account Report".  I'm in simulator and calculate costs 0,0035 per share + ECN fees shown in Account Report. The more you have tickets/scale, the more they add up. 

Then there is different lot's. "Board Lot" is block of shares that are measured in hundreds(100, 200, 300, 1000 etc.). Block less then a hundred(60,70, etc) is "Odd Lot" and numbers between hundreds are "mixed Lot". All these have affect ECN fees. It's quite easy to understand. If you add liquidity like Board Lots you get rewarded by lower fees. If you make it harder to the market to fill orders you have to pay like in Mixed Lot.

 

My biggest weakness is overtrading and these fees has major impact if you overtrade. And Roberts post shows the range were i have seen them vary. But it's great that DAS calculates them so you don't need to guess or average them. 

In few strategies i have tested by using LIMIT orders because it adds liquidity and it not only reduces ECN fees but you can get rebate for adding liquidity, hence reducing fees even more. Never seen these rebates in live or done research so not sure does it really work in practice. But at least ECN fees are smaller. Mostly i just try to scale fewer times than Andrew because it'll eat small account if you scale six times on small share sizes.

I still wouldn't start using LIMIT orders in fear of fees. Like Andrew says, at the beginning(or for a while after) it's not important at all. You need to learn everything else first and then you can make adjustments so you can be more cost efficient. But it is still good to know these things exists.

 

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On 7/22/2018 at 2:09 PM, Robert H said:

I've noticed the same! It really depends on the stock, liquidity at that moment, etc. @Lee W knows how to  display regulatory fees separate from the Comm/Fee in the IB report. I believe you need to create a custom report.

Examples from Friday:

GSK bought 200, Comm+Fee: 0.74, per Share = 0.0037
MU bought 400, Comm+Fee: 1.47, per Share = 0.0037
SKX bought 400, Comm+Fee: 2.32, per Share = 0.0058
SKX sell 133, Comm+Fee: 0.54, per Share = 0.0041

Robert is correct.

20 hours ago, Jason W said:

It would be very helpful if we can display regulatory fees separate from comm/Fee, then we can know how the fees are charged and why some trades cost almost twice as much as other ones. 

Thanks man !!!

I will ask Lee tomorrow. 

Jason, here's what you do.  Log in to the IB Acct Management page.  Go to Statements.  To the right, you'll see Create Custom Statement.  Click that.  On the next page, give the statement a name (maybe Commissions and Fees).  Under "period," choose Daily.  Then, in the "sections" at the bottom, click Commission Details.  A check will appear showing you've selected that one.  It is the only one you need to select.  Next, mark any of the "Section Configurations" you want.  You don't have to choose any.  Click "continue" at the bottom right.  You'll then get to review you choices.  Click "create" at the bottom right.  Next page, click OK.

Next you'll be taken back to the Statements page.  You'll see the custom statement off to the right.  Click the little arrow to the right of the statement name.  It will run the statement for whatever date is in the field (in the list of fields). 

This report will show you the total commission as well as the breakdown of broker charges and third party charges.

Hope that helps!

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There you have it folks! They don't call him Lee 'The Legend' for nothing lol.

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1 hour ago, Lee W said:

Robert is correct.

Jason, here's what you do.  Log in to the IB Acct Management page.  Go to Statements.  To the right, you'll see Create Custom Statement.  Click that.  On the next page, give the statement a name (maybe Commissions and Fees).  Under "period," choose Daily.  Then, in the "sections" at the bottom, click Commission Details.  A check will appear showing you've selected that one.  It is the only one you need to select.  Next, mark any of the "Section Configurations" you want.  You don't have to choose any.  Click "continue" at the bottom right.  You'll then get to review you choices.  Click "create" at the bottom right.  Next page, click OK.

Next you'll be taken back to the Statements page.  You'll see the custom statement off to the right.  Click the little arrow to the right of the statement name.  It will run the statement for whatever date is in the field (in the list of fields). 

This report will show you the total commission as well as the breakdown of broker charges and third party charges.

Hope that helps!

 

On 7/22/2018 at 11:09 AM, Robert H said:

I've noticed the same! It really depends on the stock, liquidity at that moment, etc. @Lee W knows how to  display regulatory fees separate from the Comm/Fee in the IB report. I believe you need to create a custom report.

Examples from Friday:

GSK bought 200, Comm+Fee: 0.74, per Share = 0.0037
MU bought 400, Comm+Fee: 1.47, per Share = 0.0037
SKX bought 400, Comm+Fee: 2.32, per Share = 0.0058
SKX sell 133, Comm+Fee: 0.54, per Share = 0.0041

Lee you are a true legend of this community !!!

Thank you guys so much !!!

 

So now we can see that IB's fee is consistent. But some trades will have a third party fee. 

The question now is when do they occur ? and under what conditions you will be charged a third party fee ?

I'm not even sure if its optimal to worry about fees when we trading. But those first two trades i made, I press the same hotkey twice, only 3 seconds apart. One trade has a huge third party charge, the other one has none. 

 

interactive broker charge you more 2 .png

Edited by Jason W
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Have you figured out, what is causing this huge Third party fee and how to avoid them, if possible?

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On 7/23/2018 at 1:01 AM, Ville said:

Are we talking about ECN fees? They are separate from comission that brokers take. You can get them even in DAS simulator. Go to top bar "Trade" -> "Account Report".  I'm in simulator and calculate costs 0,0035 per share + ECN fees shown in Account Report. The more you have tickets/scale, the more they add up. 

Then there is different lot's. "Board Lot" is block of shares that are measured in hundreds(100, 200, 300, 1000 etc.). Block less then a hundred(60,70, etc) is "Odd Lot" and numbers between hundreds are "mixed Lot". All these have affect ECN fees. It's quite easy to understand. If you add liquidity like Board Lots you get rewarded by lower fees. If you make it harder to the market to fill orders you have to pay like in Mixed Lot.

 

My biggest weakness is overtrading and these fees has major impact if you overtrade. And Roberts post shows the range were i have seen them vary. But it's great that DAS calculates them so you don't need to guess or average them. 

In few strategies i have tested by using LIMIT orders because it adds liquidity and it not only reduces ECN fees but you can get rebate for adding liquidity, hence reducing fees even more. Never seen these rebates in live or done research so not sure does it really work in practice. But at least ECN fees are smaller. Mostly i just try to scale fewer times than Andrew because it'll eat small account if you scale six times on small share sizes.

I still wouldn't start using LIMIT orders in fear of fees. Like Andrew says, at the beginning(or for a while after) it's not important at all. You need to learn everything else first and then you can make adjustments so you can be more cost efficient. But it is still good to know these things exists.

 

New to DAS. When you say you wouldn't start using LIMIT orders does that mean you use marketable limit orders right now? Ive never heard of them outside Andrews books and DAS lingo. Those are basically buying at the inside Ask and upto the limit you set (i.e ask+$0.05)? 

Also whats your fee structure setup with at IBKR? The set fee rate of like $1 per trade or I'm assuming the $0.0035 fee structure. I never did the math. I wonder at how many shares its worth it to switch over. 

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On 7/23/2018 at 3:45 PM, Lee W said:

Robert is correct.

Jason, here's what you do.  Log in to the IB Acct Management page.  Go to Statements.  To the right, you'll see Create Custom Statement.  Click that.  On the next page, give the statement a name (maybe Commissions and Fees).  Under "period," choose Daily.  Then, in the "sections" at the bottom, click Commission Details.  A check will appear showing you've selected that one.  It is the only one you need to select.  Next, mark any of the "Section Configurations" you want.  You don't have to choose any.  Click "continue" at the bottom right.  You'll then get to review you choices.  Click "create" at the bottom right.  Next page, click OK.

Next you'll be taken back to the Statements page.  You'll see the custom statement off to the right.  Click the little arrow to the right of the statement name.  It will run the statement for whatever date is in the field (in the list of fields). 

This report will show you the total commission as well as the breakdown of broker charges and third party charges.

Hope that helps!

The other thing is that as far as I know most people are lazy and keep it set to SMART routing instead of pick ARCA or the like and researching at what share point the route fees actually start to pay you to take positions as well as not routing out dark. 

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On 11/27/2019 at 9:18 AM, Sapperstien said:

New to DAS. When you say you wouldn't start using LIMIT orders does that mean you use marketable limit orders right now? Ive never heard of them outside Andrews books and DAS lingo. Those are basically buying at the inside Ask and upto the limit you set (i.e ask+$0.05)? 

Also whats your fee structure setup with at IBKR? The set fee rate of like $1 per trade or I'm assuming the $0.0035 fee structure. I never did the math. I wonder at how many shares its worth it to switch over. 

I use both. Depends on situation. 

It is good if you can use LIMIT orders as you get better price for the stock(think if you trade 3000 shares a day and you save 3c per share =90$ a day), but what i mean is that at the beginning it is not the most important thing to get the best price. It is more important to get in a good setups and have good risk to reward

Also it depends how you trade. I think in Andrews fast paced style it is essential to get in fast and get out fast. If you are catching bigger swings, then i don't think there is such a hurry that you can't take LIMIT orders. I think Norm is using some sort of LIMIT Order -Hotkey...

 

I like Tiered sizing. I trade small and make partials, so it make sense to me. The fee structure depends on how you trade. You need to calculate how many partials do you take and how big size you trade. IB has Tiered and Fixed. Tier is 0,0035$(min. 35c) + ECN. Fixed is 0,005$(min. 1$) and includes ECN. CMEG has 0,0065$(min. 50c) including ECN.

 

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