Author Topic: IBKR - Interactive Brokers  (Read 164486 times)

Hielko

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Re: IBKR - Interactive Brokers
« Reply #110 on: June 04, 2015, 08:43:22 AM »

I'm wondering why you even bother to give your own opinion about this trade-off because it is obvious that you A) don't understand the tiered pricing structure and B) have never tried it.

See my first post in this topic. Tiered is a fixed plus a variable amount where the variable amount is impossible to estimate. Because the amount of trades I make is low I guessed that fixed would be better for me but I still have no idea how you are even estimating the variable costs per trade of the tiered system.
You can take the worst case scenario when estimating the variable fees, which would be the case when you take liquidity at the most expensive exchange. When you switch to variable rate you see an estimated fee range when you try to submit an order to IB:

For example:

buying 100 BRK shares @ 141 would cost between 0.01 and 0.67 USD
buying 100 CNRD shares @ 31 would cost between -0.63 and 0.67 USD


writser

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Re: IBKR - Interactive Brokers
« Reply #111 on: June 04, 2015, 08:54:31 AM »
Quote
See my first post in this topic. Tiered is a fixed plus a variable amount where the variable amount is impossible to estimate. Because the amount of trades I make is low I guessed that fixed would be better for me but I still have no idea how you are even estimating the variable costs per trade of the tiered system.

First of all, that just not true. You can determine variable costs exactly using the information in the IB pricing page. And second, as opposed to you I don't make random assumptions, I actually use the tiered structure. A few posts before I gave a detailed breakdown of variable costs and explained to you why they are largely irrelevant. I also explained to you that in practice the only relevant variable costs are the per-exchange liquidity charges / rebates and you can look these up. A couple of examples:

Quote
Remove liquidity @ NYSE: .0035 (tiered level 1 fee) + remove liquidity NYSE fee: .0027 (look up on website) + clearing fee: .0002 (look up on website) = .0064 cent / share. The FINRA fees etc. add up to ~ .0001 cent / share (again, look up on website). I just bought 100 lots of an unnamed stock on NYSE today and that cost me 64 cent. Exactly the calculated amount.

Add liquidity @ NASDAQ: .0035 (tiered level 1 fee) - add liquidity NASDAQ rebate: .0021 (look up on website) + clearing fee: .0002 (again, look up on website) = .0016 cent / share. Today I bought 500 shares MCGC (free idea) and it cost me exactly 80 ct. Again, exactly the calculated amount

Selling is slightly more expensive because of extra transaction fees (again, as is mentioned on the IB pricing info page).

Multiple people here have been using the tiered system and have been clearly explaining that tiered pricing would be cheaper for you but you are too stubborn to do the actual calculations and keep repeating claims about 'unknown hidden costs' while you have never even tried it. I'll stop trying to convince you. Just stick to the fixed pricing - much cheaper. ::)
« Last Edit: June 04, 2015, 09:04:53 AM by writser »
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Txvestor

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Re: IBKR - Interactive Brokers
« Reply #112 on: June 04, 2015, 09:48:52 AM »
Can any of you speak to the benefits other than trading costs with interactive brokers. I currently am with a brokerage that offers me $0 trades but the other charges and fees have been adding up to around $200 a year. I am also not real happy with their order execution as I sometimes see trades execute at prices just below or above my limit orders.
Finally there is no option to lend shorts etc. so thinking about making a move.

wachtwoord

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Re: IBKR - Interactive Brokers
« Reply #113 on: June 04, 2015, 09:55:26 AM »
Multiple people here have been using the tiered system and have been clearly explaining that tiered pricing would be cheaper for you but you are too stubborn to do the actual calculations and keep repeating claims about 'unknown hidden costs' while you have never even tried it. I'll stop trying to convince you. Just stick to the fixed pricing - much cheaper. ::)

You should have started with reading my posts. Since Hielko replied I have assumed his experience is correct and waited until I get home to figure out how to switch. Thanks Hielko!

The rest of the posts I've just been defending myself from your unfunded attacks. In the first post you make here you already started, get out at the wrong side of the bed much. I actually started to post here to help the people investigating the stock because I looked up how the tiered approach works and I thought others could benefit (I also explicitly sourced my finding so you can decide whether my source is trustworthy). After that I just asked how people are sure how much the additional costs are as they are described quite imprecisely by IB, and in general I would not think it would make sense for the tiered approach to be beneficial to me (because of my low volume) without looking it up. I mean why does the fixed approach even exist and who would use it. Of course I didn't try out the tiered approach yet as I believed it would be more expensive. I think all I asked were valid questions and you got your panties in a bunch.

Thanks again Hielko. I'm going to go look up how to switch :)
"Beware of he who would deny you access to information, for in his heart he dreams himself your master"

benhacker

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Re: IBKR - Interactive Brokers
« Reply #114 on: June 04, 2015, 10:05:10 AM »
Quote
Can any of you speak to the benefits other than trading costs with interactive brokers. I currently am with a brokerage that offers me $0 trades but the other charges and fees have been adding up to around $200 a year. I am also not real happy with their order execution as I sometimes see trades execute at prices just below or above my limit orders.
Finally there is no option to lend shorts etc. so thinking about making a move.

I think this has been covered a few times over the years, but I'll reiterate my "pitch" for IB at the risk of being branded a zealot. :)

Cons:
1) Generally mediocre web interface for basic function (reports are not simple, webtrader is the web equivalent to Fido or Schwab, but it's not great).
2) Customer support while improving is much worse than other brokers.
3) Minimum account fees need to be factored in to any savings you expect ($20 / month for a <$10k account, $10 / month for a 10k - 100k account, $0 above.... for any IRA, add on an additional $7.5 / quarter)
4) For Foreign withholding of dividends, at least for US customers, IB withholds on IRAs in addition to taxable accounts.  This should be fixed some day, but basically is annoying and either you have to increase audit risk on your taxes by reclaiming the dividends, or writing it off.
5) Most don't like two factor login (edit)
6) No free real time quotes (edit)

Pros - Individual Investor:
1) Cost - Margin rates
2) Cost - commissions (both stock, option, currency, and future commissions are in the vast majority of real world experience lower.  You can do the math on their fees + commissions to see if you are in the vast majority I describe above)
3) Cost - Corporate actions (no BS corporate re-org fees)
4) Cost - Ability to lend out shares and capture part of borrow fees
5) Cost Transparency - Ability to see exact borrow rate costs on short sales in real time
6) Access - international and product access is *almost* unparalleled (exceptions are South African equities, Korean equities, and a few others.  I would bet money this will be solved in 2 years).
7) Features - For those wishing to do advanced stuff, IB is pretty amazing.  They have access to algos, automated trading tools, a probability tool for future stock price distribution at certain dates (based on option markets) and tools to tailor strategies to exploit a divergent view.
8) History of lowering costs to customers and being rationale about pricing - removed $10 / month fee for $100k accounts for example... and in general is just a cost plus model which I think is more fair.
9) I continue to get what I consider excellent fills at IB, I frequently get executed better than my limit and ask/bid.  I can't remember the last time something traded through my price and I didn't get filled.

Pros - Institutional Investor:
1) No minimums
2) Fully electronic sign up for clients which is pretty simple
3) Access to IB marketplace (maybe a pro for retail as well)
4) Block trading, rebalance tool, and other services like billing, etc seem well designed and simple from my experience.
5) Ability to have a trade-away account if you run a fund

Hope that helps.

Ben

« Last Edit: June 04, 2015, 11:10:11 AM by benhacker »
Ben Hacker
Beaverton, Oregon - USA

tombgrt

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Re: IBKR - Interactive Brokers
« Reply #115 on: June 04, 2015, 10:29:03 AM »
6) Access - international and product access is *almost* unparalleled (exceptions are South African equities, Korean equities, and a few others.  I would bet money this will be solved in 2 years).



This would be so sweet given the relative cheapness of those markets. I'm a customer through Lynx in Belgium (they use the ib platform) and am very happy, no other broker available comes close here in Belgium imo. Service (both ib and Lynx) is great as well which is very important to me.

Also agree on the fills btw which is extremely important when buying those more illiquid and smaller stocks. A bad or missed fill could cost you quite a bit more than a few trades.

wachtwoord

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Re: IBKR - Interactive Brokers
« Reply #116 on: June 04, 2015, 10:34:24 AM »
6) Access - international and product access is *almost* unparalleled (exceptions are South African equities, Korean equities, and a few others.  I would bet money this will be solved in 2 years).



This would be so sweet given the relative cheapness of those markets. I'm a customer through Lynx in Belgium (they use the ib platform) and am very happy, no other broker available comes close here in Belgium imo. Service (both ib and Lynx) is great as well which is very important to me.

Also agree on the fills btw which is extremely important when buying those more illiquid and smaller stocks. A bad or missed fill could cost you quite a bit more than a few trades.

Why don't you use IB directly? It's cheaper.
"Beware of he who would deny you access to information, for in his heart he dreams himself your master"

undervalued

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Re: IBKR - Interactive Brokers
« Reply #117 on: June 04, 2015, 10:37:51 AM »
I just moved to IBKR. Do you guys subscribe to real time quotes? I mainly invest in US companies but I don't want to pay a $10 monthly fee just to get the real time of stock prices. This is going to make it more expensive than other brokerages. I rarely trades.. Probably 10-20 trades per year.
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

wachtwoord

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Re: IBKR - Interactive Brokers
« Reply #118 on: June 04, 2015, 10:42:18 AM »
I just moved to IBKR. Do you guys subscribe to real time quotes? I mainly invest in US companies but I don't want to pay a $10 monthly fee just to get the real time of stock prices. This is going to make it more expensive than other brokerages. I rarely trades.. Probably 10-20 trades per year.

Yahoo finance has real-time quotes, I use that.
"Beware of he who would deny you access to information, for in his heart he dreams himself your master"

tombgrt

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Re: IBKR - Interactive Brokers
« Reply #119 on: June 04, 2015, 10:45:26 AM »
6) Access - international and product access is *almost* unparalleled (exceptions are South African equities, Korean equities, and a few others.  I would bet money this will be solved in 2 years).



This would be so sweet given the relative cheapness of those markets. I'm a customer through Lynx in Belgium (they use the ib platform) and am very happy, no other broker available comes close here in Belgium imo. Service (both ib and Lynx) is great as well which is very important to me.

Also agree on the fills btw which is extremely important when buying those more illiquid and smaller stocks. A bad or missed fill could cost you quite a bit more than a few trades.

Why don't you use IB directly? It's cheaper.

I probably should but haven't bothered yet so far. I got with Lynx through an acquaintance and am happy with their service so I stuck with them. I don't trade often so difference wouldn't be that big. One difference I've heard is that IB doesn't charge the Belgian stock tax (0.25%) and Lynx does. So in theory you could evade the tax I guess.
Also, if anything ever happened to me, I want to make it easier on my family to contact my broker and get things in order. Their HQ is basically located 2km from my home.  :)