Author Topic: IBKR - Interactive Brokers  (Read 169312 times)

sleepydragon

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Re: IBKR - Interactive Brokers
« Reply #440 on: September 12, 2018, 05:45:51 AM »
IBís commission structure intends to attract the kind of customers that trade a lot, using margin and trade options and futures. If u trade multiple times per day, IB is cheaper


benhacker

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Re: IBKR - Interactive Brokers
« Reply #441 on: September 12, 2018, 10:46:20 AM »
Muscleman,

for limit orders, you will (certainly) get better fills at IB.  for small/medium market orders, I would guess you get better fills at retail brokers who sell to internalizers (you can think of internalizers as outside MM's basically paying Fido to share in making markets for their retail orders... why?  Because retail orders are on average dumb(er) money, so you can afford as a MM to make a tighter market in those cases).

For large market orders, retail internalizers can dump your order to the NBBO and in that case you are likely out of luck.  for limits, you can be front run by a retail internalizer (they outbid you by $0.001) if they so choose (I'm not sure if Fido or others can prevent your order from showing on the NBBO... I don't think so)... and they so choose (on average) when it is to your detriment.

My 2 cents (and my understanding may not be perfect here on the above). brokers do report average spread / market impact of their customers trading on their platform, and IB scores better across all metrics.  YMMV.

« Last Edit: September 12, 2018, 01:36:16 PM by benhacker »
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muscleman

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Re: IBKR - Interactive Brokers
« Reply #442 on: September 13, 2018, 05:11:57 AM »
Muscleman,

for limit orders, you will (certainly) get better fills at IB.  for small/medium market orders, I would guess you get better fills at retail brokers who sell to internalizers (you can think of internalizers as outside MM's basically paying Fido to share in making markets for their retail orders... why?  Because retail orders are on average dumb(er) money, so you can afford as a MM to make a tighter market in those cases).

For large market orders, retail internalizers can dump your order to the NBBO and in that case you are likely out of luck.  for limits, you can be front run by a retail internalizer (they outbid you by $0.001) if they so choose (I'm not sure if Fido or others can prevent your order from showing on the NBBO... I don't think so)... and they so choose (on average) when it is to your detriment.

My 2 cents (and my understanding may not be perfect here on the above). brokers do report average spread / market impact of their customers trading on their platform, and IB scores better across all metrics.  YMMV.

When i place small market orders at IB, I still get bad fills. MSON for example two weeks ago. Bid 18.95 ask 19.3. I tried to sell 400 shares at Fido and at bid, and got 19.16 fill. Then I tried to sell 500 shares at IB at bid. I was filled right at the bid.
It seems to me that IB has an internalizer called MM. Whenever MM is involved, I got a tiny bid of improvement. Otherwise it is always fill at the NBBO.

I never place larger orders in one day. For medium orders, I like to use TD's time slice order, which sends out 100 shares every 10-15 minutes through Citadel. I know Citadel is an evil internalizer and if it knows there is a large consistent buying force throughout the day, it will try to run up the price first. But that's ok for a medium sized order which only sends out 100 shares every 5-15 minutes.

IB has something similar, called accumulation/distribution algo order. I tried it but wasn't impressed. It was basically an order held on the client side TWS, and periodically send orders out. If I set the buy limit to hit the ask, it will almost always just hit the ask at NBBO, just like a single order. Even if it is a small order, IB tries to fill me at NBBO.
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muscleman

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Re: IBKR - Interactive Brokers
« Reply #443 on: September 13, 2018, 05:15:48 AM »
IBís commission structure intends to attract the kind of customers that trade a lot, using margin and trade options and futures. If u trade multiple times per day, IB is cheaper

I don't understand why IB is cheaper if you trade multiple times a day vs a single trade a day. Fido has $4.95 flat fee, and IB can easily run up to $20-100 for small priced stocks like a $1 stock. If one trade is expensive, multiple trades is more expensive.
For margin, I don't use margin, but my understanding is that if you buy and sell within one day, there is no margin charge? If you hold margin positions overnight, then of course there is margin charge, and IB has advantage here.
I agree that IB's option and future commissions are low.
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sleepydragon

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Re: IBKR - Interactive Brokers
« Reply #444 on: September 13, 2018, 05:28:53 AM »
IBís commission structure intends to attract the kind of customers that trade a lot, using margin and trade options and futures. If u trade multiple times per day, IB is cheaper

I don't understand why IB is cheaper if you trade multiple times a day vs a single trade a day. Fido has $4.95 flat fee, and IB can easily run up to $20-100 for small priced stocks like a $1 stock. If one trade is expensive, multiple trades is more expensive.
For margin, I don't use margin, but my understanding is that if you buy and sell within one day, there is no margin charge? If you hold margin positions overnight, then of course there is margin charge, and IB has advantage here.
I agree that IB's option and future commissions are low.

If u just trade 1 dollar stock, I agree IB is not cheap. But most retail day traders trade Apple, Tesla , index futures and oil futures etc. I couldnít make myself invest in IBKR, because I think a lot of itís clients lose in stock market. They need to keep getting new suckers that trade a lot. Their margin rate is so low it attracts customers that use a lot of margin. But the good thing is their margin calls are much more automated than other brokers and will liquidate within minutes in real time (no phone calls etc), which is good for them

Spekulatius

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Re: IBKR - Interactive Brokers
« Reply #445 on: September 13, 2018, 05:52:40 AM »
The price for trading is headed towards zero.An average investor us better off going to Fidelity. A day trader may be better if with IB because  of lower margin and fast execution. Also keep in mind that UB pays better interest rates on cash balances, which becomes an advantage again now that Money market interest rates are rising again. This is somewhat negated by minimum acvoubt fees and/ or fees for data feeds. I keep my IB account for international stocks and the occasional OTC stock trade.

Edit: Another advantage is that IB never quit on me, not in the ugliest days of 2008 or during flash crashes. During the same periods I could  not log in other accounts like Fidelity or couldnít trade. I made sone very nice trades during the flash crash, as I recall.
« Last Edit: September 13, 2018, 07:05:34 AM by Spekulatius »
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Hielko

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Re: IBKR - Interactive Brokers
« Reply #446 on: September 13, 2018, 06:17:15 AM »
IBís commission structure intends to attract the kind of customers that trade a lot, using margin and trade options and futures. If u trade multiple times per day, IB is cheaper

I don't understand why IB is cheaper if you trade multiple times a day vs a single trade a day. Fido has $4.95 flat fee, and IB can easily run up to $20-100 for small priced stocks like a $1 stock. If one trade is expensive, multiple trades is more expensive.
For margin, I don't use margin, but my understanding is that if you buy and sell within one day, there is no margin charge? If you hold margin positions overnight, then of course there is margin charge, and IB has advantage here.
I agree that IB's option and future commissions are low.

If u just trade 1 dollar stock, I agree IB is not cheap. But most retail day traders trade Apple, Tesla , index futures and oil futures etc. I couldnít make myself invest in IBKR, because I think a lot of itís clients lose in stock market. They need to keep getting new suckers that trade a lot. Their margin rate is so low it attracts customers that use a lot of margin. But the good thing is their margin calls are much more automated than other brokers and will liquidate within minutes in real time (no phone calls etc), which is good for them
I think you have a bit of a skewed view of the typical Interactive Brokers client. Average account equity is something like $250,000 which generates a bit more than one trade a month or something like that, and probably their clients as a group aren't significantly underperforming a relevant index. At least not like a typical day trader that throws a few hundred or a few thousand dollars on a site like plus500 to lose it all in a couple of months.

KCLarkin

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Re: IBKR - Interactive Brokers
« Reply #447 on: September 13, 2018, 07:28:27 AM »
When i place small market orders at IB, I still get bad fills. MSON for example two weeks ago. Bid 18.95 ask 19.3. I tried to sell 400 shares at Fido and at bid, and got 19.16 fill. Then I tried to sell 500 shares at IB at bid. I was filled right at the bid.

Have you tried reversing the order of trades? Sell on IB first then Fido? Market makers/HFT might be backing off after they see the first order.

Also, if you want to get filled between bid/ask, why don't you use one of IBKRs algos that are designed to do that? IBKR is very explicit in warning users to never use market orders.

undervalued

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Re: IBKR - Interactive Brokers
« Reply #448 on: September 13, 2018, 09:41:59 AM »
When i place small market orders at IB, I still get bad fills. MSON for example two weeks ago. Bid 18.95 ask 19.3. I tried to sell 400 shares at Fido and at bid, and got 19.16 fill. Then I tried to sell 500 shares at IB at bid. I was filled right at the bid.

Have you tried reversing the order of trades? Sell on IB first then Fido? Market makers/HFT might be backing off after they see the first order.

Also, if you want to get filled between bid/ask, why don't you use one of IBKRs algos that are designed to do that? IBKR is very explicit in warning users to never use market orders.

I experience the same thing, I don't trade pretty often though.
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muscleman

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Re: IBKR - Interactive Brokers
« Reply #449 on: September 17, 2018, 07:26:09 AM »
When i place small market orders at IB, I still get bad fills. MSON for example two weeks ago. Bid 18.95 ask 19.3. I tried to sell 400 shares at Fido and at bid, and got 19.16 fill. Then I tried to sell 500 shares at IB at bid. I was filled right at the bid.

Have you tried reversing the order of trades? Sell on IB first then Fido? Market makers/HFT might be backing off after they see the first order.

Also, if you want to get filled between bid/ask, why don't you use one of IBKRs algos that are designed to do that? IBKR is very explicit in warning users to never use market orders.

I tried reversing the order of trades but that didn't help. I have not been using market orders. i always use limit order. The only question is whether I hit bid/ask with my order or not. I think the problem is that IB always tries to route to the exchange, and sometimes the other HFTs have better pricing that's unavailable to IB. But other retail brokers like Fido and TD would look at all those venues and find the best pricing.
IB's algo trades won't help much. They are just a fancy way to slice your order into multiples at different limit prices. That's it. If a single limit order fills poorly, then multiple orders won't improve.

That's my personal experience that I would like to share with you guys, and I will continue to experiment on this, but I am inclined to move my mother's account away from IB soon.
I am muslceman. I have more muscle than brain!