Brokers and commissions

[ChadK]

A friend is considering moving over to Interactive Brokers, but is having a difficult time decoding the if-then-else statements describing their commissions.  Can someone who regularly trades SPX and RUT options please let me know how much they're actually paying for those two instruments? 

[Paul]

I don't trade them every day but paid 1.33 per option contract yesterday.

[bam1960]

58 minutes ago, ChadK said:

A friend is considering moving over to Interactive Brokers, but is having a difficult time decoding the if-then-else statements describing their commissions.  Can someone who regularly trades SPX and RUT options please let me know how much they're actually paying for those two instruments? 

I think I average under a 1.00 for RUT and about 1.20 for SPX 

[ChadK]

Thanks for the replies.  Seems difficult to beat the $0.75 comms and ~$0.025 fees that he and I are getting at TOS.  But of course comms aren't everything, if better fills can be had because IB isn't getting paid for their order flow like TOS is.

[SBatch]

12 minutes ago, ChadK said:

Thanks for the replies.  Seems difficult to beat the $0.75 comms and ~$0.025 fees that he and I are getting at TOS.  But of course comms aren't everything, if better fills can be had because IB isn't getting paid for their order flow like TOS is.

IB absolutely gets paid for their order flow.  They simply like to mislead customers by stating that "IB does not sell order flow to another broker."  This of course is a distinction without a difference because they route directly to the exchange that pays them for the order flow so there is no other broker in between, meaning their rebate is even larger than those who use a wholesaler.  This is from their most recent quarterly order routing report:

"Payment for Orders: IB receives payments for certain orders in varying amounts from U.S. options exchanges, specialists and/or market makers pursuant to the mandatory marketing fee programs that have been adopted by the exchanges and approved by the SEC. If multiple exchanges are quoting at the NBBO for an option order and IB has discretion as to where to send the order or a portion of it, IB  generally will “break the tie” by sending the order to an exchange where it will receive the most payment for the order, or to an exchange designated by a firm from whom IB will receive the most payment at that market."

Edited July 26, 2017 by SBatch

[Paul]

Keep in mind also that for regular stock options anyway,  the price changes if you are adding or subtracting liquidity.  Not sure on the mechanics ( probably related to what Batch mentions above)  but I quite often get greatly discounted commissions and have even had a credit, believe it or not.

 

 

[ChadK]

19 hours ago, SBatch said:

IB absolutely gets paid for their order flow.

 

Thanks for the clarification.

[bam1960]

4 minutes ago, ChadK said:

 

Thanks for the clarification.

But like someone said earlier there are many times I get a credit for some trades making it difficult to compare apples to apples but i do believe overall I am better off commissions wise with IB than at TOS, I have an account at TOS as well and I do think my fills are better on IB.

[PaulCao]

Hi SBatch, 

Thanks for clarifying IB's stance, 

I believe this means if you use Direct order to route your orders, then they won't use this discretion to SMART route your order depending on the best payment they can receive (but still has to be the NBBO)? 

My biggest issue with options trading is not necessarily the broker's routing but figuring out the true mid price - sometimes, the mid for a spread is distorted because "Joe 1-lot" has already bid up the price for one of the legs; I wish options software could look at the whole entire volatility smile of a options series across a single expiration, smooth out the outliers and create true mids for your spreads, 

But that would be too fair for the market-makers (which until recently IB was with TimberHill before they sold it to Two Sigma), so I won't hold out my breath, 

Thanks,
Paul

[cuegis]

14 minutes ago, PaulCao said:

Hi SBatch, 

Thanks for clarifying IB's stance, 

I believe this means if you use Direct order to route your orders, then they won't use this discretion to SMART route your order depending on the best payment they can receive (but still has to be the NBBO)? 

My biggest issue with options trading is not necessarily the broker's routing but figuring out the true mid price - sometimes, the mid for a spread is distorted because "Joe 1-lot" has already bid up the price for one of the legs; I wish options software could look at the whole entire volatility smile of a options series across a single expiration, smooth out the outliers and create true mids for your spreads, 

But that would be too fair for the market-makers (which until recently IB was with TimberHill before they sold it to Two Sigma), so I won't hold out my breath, 

Thanks,
Paul

I was a market maker in options for many years,on several commodities, and stock exchanges (AMEX).

I traded with Timber Hill.

As for your desire to be able to see the "real" mid, or what market makers on the floor would call "fair value", everybody came to work everyday with "value sheets".

They were either provided by whoever you worked for, or if worked for yourself, there were programs that you could buy that you could run every night and print out for the next day.

Since all of the floors are now long gone, and there are no longer "those" kind of "organic"market makers, I still think that there are a few options software companies around that can create the equivalent of those "value sheets".....or just have it right on your computer.

This way, you can know the fair value of each option depending upon what you set for your IV and where the price is, then work off that.

I know "Option Vue" still has something like this but, they are way too expensive.

Maybe ivolatility.com might have an affordable version. I'm pretty sure they do.

[stewbd00]

On 7/26/2017 at 3:32 PM, ChadK said:

Thanks for the replies.  Seems difficult to beat the $0.75 comms and ~$0.025 fees that he and I are getting at TOS.  But of course comms aren't everything, if better fills can be had because IB isn't getting paid for their order flow like TOS is.

I trade SteadyCondors in both my IB and TOS accounts.  My commission structure on TOS is $1.00/contract, and that consistently works out better than IB's fees for SPX & RUT.  On the last Steady Condors opening, here's what I paid at IB:

SPX:  $12.33 for 5 Verticals, $4.93 for 2 Verticals, $3.07 for 1 Vertical, and $1.44 for a single put.  $21.77 for 17 contracts or ~1.28/contract

RUT: $9.61 for 5 Verticals, $3.83 for 2 Verticals, $2.49 for 1 Vertical, and $1.24 for a single put.  $17.17 for 17 contracts or ~1.01/contract

 

[ChadK]

28 minutes ago, stewbd00 said:

I trade SteadyCondors in both my IB and TOS accounts.  My commission structure on TOS is $1.00/contract, and that consistently works out better than IB's fees for SPX & RUT.  On the last Steady Condors opening, here's what I paid at IB:

SPX:  $12.33 for 5 Verticals, $4.93 for 2 Verticals, $3.07 for 1 Vertical, and $1.44 for a single put.  $21.77 for 17 contracts or ~1.28/contract

RUT: $9.61 for 5 Verticals, $3.83 for 2 Verticals, $2.49 for 1 Vertical, and $1.24 for a single put.  $17.17 for 17 contracts or ~1.01/contract

 

 

Excellent data.  Thanks so much for the detail!  While commissions shouldn't be the deciding factor on which broker to use, it's important to know what you're in for, and IB's website is difficult to understand what the costs actually are.  As mentioned, we pay $0.75/contract at TOS, with an additional $0.02357/contract in fees, for about $0.773 all-inclusive.

[Sirion]

Has anyone who uses Tradier had any luck getting a break on the $40/month per account? I have 3 accounts, regular, traditional IRA, and Roth IRA. Generally my most active trading is done in my IRAs due to the tax sheltering, but I doubt it would be enough to pay $40/month for some of those accounts right now as I just don't hold enough positions in them. 

[Noah Katz]

If you don't trade a lot just pay the regular .35/contract.

[stewbd00]

@SBatch do you ever trade while mobile using Tradier?  If so, which app do you use to trade while mobile?

[SBatch]

1 hour ago, stewbd00 said:

@SBatch do you ever trade while mobile using Tradier?  If so, which app do you use to trade while mobile?

Their web platform is mobile compliant so you can just use the website to trade mobile.

[stewbd00]

Thanks, @SBatch  I'm ready to give them a try after I spent $91 in commsissions rolling 20 VIX verticals earlier today with IB. 

[apsoccermd]

41 minutes ago, stewbd00 said:

Thanks, @SBatch  I'm ready to give them a try after I spent $91 in commsissions rolling 20 VIX verticals earlier today with IB. 

Rolling the VIX contracts was painful..

However... most of the cost came from Exchange fees..  CBOE  charged me a 1$ in fee for each contract.. From what i understand, Tradier also passes exchange fees to the consumer.. If that is the case, then I am not sure how much there is to save... Can anyone with experience clarify this? 

Thanks

[stewbd00]

@apsoccermd good point on additional fees for VIX....According to the Tradier website, there is a fee of somewhere between 0.18-0.60 per contract for VIX options.  Can anyone that is on the $40/month plan at Tradier tell us what they are actually charging for VIX, SPX & RUT fees?  It's a bit vague on what the actual price is for each product:

 

Are there any option contracts that have fees in addition to ORF and TAF?

Yes, there are currently 17 Index Options that have an additional per contract fee. These fees currently range from $0.18/contract - $0.60/contract but only apply on these symbols: DXL, EPX, HGX, MNX, MVR, OEX, OSX, RUT, SOX, SPX, SVO, UTY, VIX, XAU, XEO and XDE.

[luxmon]

44 minutes ago, stewbd00 said:

@apsoccermd good point on additional fees for VIX....According to the Tradier website, there is a fee of somewhere between 0.18-0.60 per contract for VIX options.  Can anyone that is on the $40/month plan at Tradier tell us what they are actually charging for VIX, SPX & RUT fees?  It's a bit vague on what the actual price is for each product:

 

Are there any option contracts that have fees in addition to ORF and TAF?

Yes, there are currently 17 Index Options that have an additional per contract fee. These fees currently range from $0.18/contract - $0.60/contract but only apply on these symbols: DXL, EPX, HGX, MNX, MVR, OEX, OSX, RUT, SOX, SPX, SVO, UTY, VIX, XAU, XEO and XDE.

They pass though the CBOE regulatory fee for VIX options of 0.41 per contract.  Add on the ~0.043 OCC fee that is added to everything and you'll end up paying about 0.45-0.46 in the end.  Cheapest I've seen.  

I can't remember the SPX or RUT fees as I quit trading them there long ago, but I do know SPX was higher than VIX.  I don't trade them anymore since they don't allow time spreads on cash settled options (at least in my relatively small account there), and their inability to provide margin relief for broken or unbalanced butterfly/condors.  

Tim

[stewbd00]

Just in case anyone else has the same question about SPX, RUT & VIX options at Tradier, I did email them, and here are the fees that they charge on each:

VIX: $0.36/contract

SPX: $0.53/contract

RUT: $0.18/contract

[XylanderV]

Hey guys..I saw on one of the Topics (and I can't find it now) the mention of a broker who charged $45/mo for unlimited stocks and option trades...Seems like it was DYNO-something maybe?  After paying around $500 in fees to TD Ameritrade in 3 months I think I need to make a change...hard to make money when they are making all the money :)..

thanks for help..Chris

[apsoccermd]

On 8/15/2017 at 10:17 PM, XylanderV said:

Hey guys..I saw on one of the Topics (and I can't find it now) the mention of a broker who charged $45/mo for unlimited stocks and option trades...Seems like it was DYNO-something maybe?  After paying around $500 in fees to TD Ameritrade in 3 months I think I need to make a change...hard to make money when they are making all the money :)..

thanks for help..Chris

I have been working with Tradier on my new account... So here is the best deal so far i think options traders can get ( I am planning to do strictly options on this account).

$40/m - All you can trade options (SteadyOptions offer), don't forget , we pay exchange fees.. plus other fees , such as share assignment.. etc

$29/m -  Dynamic Trend Software package.. You have to contact  customer service  and ask for this offer.. 

 

This seems like the best deal , cost wise for options traders..

 

BTW... if anyone have experience and can comment on "Dynamic Trend" quality for options trading.. i would like  to here some feedback.. 

Edited August 19, 2017 by apsoccermd

[Bull3t007]

Im looking at tradier as well, im just worried about the mobile part. Some have mentioned that tradier supports mobile web page but I heard that the portfolio management from Tradier itself is horrible due to it splitting the combos after execution. So I cant really imagine doing it on a mobile phone, I do not feel like making mistakes when I get a trade alert from Kim.

 

Does anyone use Tradier and uses a good mobile platform? I know some platform are linked to tradier and have a mobile app. I have an android phone so some platforms do not support this for some reason.

Edited August 20, 2017 by Bull3t007

[stewbd00]

Just a quick update on my experience with Tradier so far.  I started trading with them on 9/1, and order execution has been good so far.  One surprise that I didn't see discussed before is that they do not have live data for the RUT index, but they do have live data for SPX, NDX & VIX.  I'm using ONE to enter trades through Tradier, and I have to switch the data feed from Tradier to IB to get Greeks, IV and last pricing on the RUT index.  Not a big deal, but it is slightly annoying.  I contacted their support about this, and because of the cost associated with real-time RUT data, they currently have no plans on adding support for real-time RUT data.  Just something to be aware of if you do choose to use Tradier.

[JRR]

I'll add my impression so far after about 6 weeks.  Fills have been ok although I would definitely give an edge to IB. My biggest annoyance with Tradier is that they do not allow any modifications to a partially filled order. They also do not allow you to change quantity on a spread order once you've submitted - price changes are allowed but not qty changes.

I spoke to them about the order modification limitations and they said it's a common complaint but they do intend to support at some point in the future. 

[Noah Katz]

1 minute ago, JRR said:

My biggest annoyance with Tradier is that they do not allow any modifications to a partially filled order. They also do not allow you to change quantity on a spread order once you've submitted - price changes are allowed but not qty changes.

 

 

Does anyone know if these limitations flow through to the Trend platform?

[cuegis]

14 minutes ago, Noah Katz said:

 

 

Does anyone know if these limitations flow through to the Trend platform?

A lot of things seem to be adding up to disqualify them.

There are certain, basic things that a trader should never even have to think about. They should just assume that everything is there, and it should be.

$40 a month is starting to look like "you get what you pay for!"

[JRR]

24 minutes ago, Noah Katz said:

 

 

Does anyone know if these limitations flow through to the Trend platform?

Not sure about Trend, but LiveVol and Tradier;s own web based forms do not allow.

[4REAL]

4 hours ago, Noah Katz said:

Does anyone know if these limitations flow through to the Trend platform?

yes Trend has indeed these limitations, so :

• not possible to change quantity once order is placed, but price can be changed though (as mentioned before by @JRR)
• not possible to pause orders, you have to cancel and then replace order (quite annoying) 

Edited September 6, 2017 by 4REAL

[Noah Katz]

bummer, thanks

[craigsmith]

If I were to take a guess, I would say all of their platforms have the limitation. I think what is happening is Tradier passes on all exchange fees. So any modification to an order would actually be a cancelled order and opening a new order. So if the exchange charges a cancel order fee, Tradier is passing that along. 

 

IB doesn't have this issue because they don't pass on the cancel order fee. Most other brokers probably don't have the issue because they are charging so much, they just eat the fee.

 

[4REAL]

Does anyone know if Tradier charges a fee for cancelling an order or changing price (after order is placed) ? So far I did not see any fees for cancelling or changing orders,  But they might charge on monthly basis ?

Edited September 6, 2017 by 4REAL

[JRR]

No, they don't charge for cancel or cancel/replace.

[craigsmith]

3 hours ago, JRR said:

No, they don't charge for cancel or cancel/replace.

My mistake, it was just a guess on my part because it's not stated anywhere on their website (and it seems like modifying an order shouldn't be a "feature").

 

I would love to have unlimited trades for 40 bucks a month, but I'm an active trader and it seems like it's just too cumbersome with any platform (I was going to use ONE). 

 

If anyone else is using this broker, I would love to hear more.

Edited September 7, 2017 by craigsmith
additional info

[akito]

TastyWorks also has that "limitation" that you can't change the quantity while editing a live order. Perhaps all brokers that use apex clearing has this "limitation"? Regardless, I personally don't see this as a big issue. Cancel and replace works well.

I would love to sign up with Tradier for their low fees, but the lack of a mobile app is a dealbreaker.

Edited September 7, 2017 by akito

[cuegis]

32 minutes ago, akito said:

TastyWorks also has that "limitation" that you can't change the quantity while editing a live order. Perhaps all brokers that use apex clearing has this "limitation"? Regardless, I personally don't see this as a big issue. Cancel and replace works well.

I would love to sign up with Tradier, but the lack of a mobile app is a dealbreaker.

IB just came out with a new , updated version, of their mobile app, about 2 months ago, and it is VERY good!

 

 

[cuegis]

The strangest thing just happened with a trade at IB.

I bought 1 call at $1.75, to test the market on something.

When I looked at the trade afterward, the commission was .34 cents

How does that happen?

 

I did it a 2nd time and it was .34 again!

Edited September 13, 2017 by cuegis

[Djtux]

Just now, cuegis said:

The strangest thing just happened with a trade at IB.

I bought 1 call at $1.75, to test the market on something.

When I looked at the trade afterward, the commission was .34 cents

How does that happen?

What do you mean ?

You are talking about rebates ?

Sometimes you could even get 0 commission or negative commissions (rare)

[Yowster]

Just now, cuegis said:

The strangest thing just happened with a trade at IB.

I bought 1 call at $1.75, to test the market on something.

When I looked at the trade afterward, the commission was .34 cents

How does that happen?

@cuegisIB commissions vary based on "contributing to market liquidity".   I've actually had trades were my commission was a credit - so I actually got a few cents for executing the trade instead of spending.   Overall, if you do a lot of trades your IB commissions will average in teh 0.75-0.79 range per contract.

[Djtux]

For single option like a call, there is the routing option https://www.interactivebrokers.com/en/software/tws/usersguidebook/configuretws/configure_smartrouting.htm to try to get more rebate.

[cuegis]

2 minutes ago, Yowster said:

@cuegisIB commissions vary based on "contributing to market liquidity".   I've actually had trades were my commission was a credit - so I actually got a few cents for executing the trade instead of spending.   Overall, if you do a lot of trades your IB commissions will average in teh 0.75-0.79 range per contract.

I do a LOT of trades everyday (several hundred) , plus I have been with them for 20 years.

A few weeks ago I asked if I could get some sort of discount on my commissions because of all of this....but they said they don't do that.

Honestly, I really don't micro-examine the rate I pay on every trade.

For some reason I just happened to check today because I wanted to see if there was anything negative about doing a 1 lot as opposed to a larger block.

[Arpit]

Dear Folks,

 

I am a new member at Steadyoptions and was interested in using Tasty Works as the account. Any reviews so far on Tasty Works based on your trading as per Steady Options.

[Kim]

Tasty Works gets decent reviews from our members. Just search the forum.

[IgorK]

On 2017-09-13 at 3:27 PM, Djtux said:

For single option like a call, there is the routing option https://www.interactivebrokers.com/en/software/tws/usersguidebook/configuretws/configure_smartrouting.htm to try to get more rebate.

Interesting page.  Do you guys have any suggested settings for this page for SO traders?

[Dan27]

23 hours ago, Kim said:

Tasty Works gets decent reviews from our members. Just search the forum.

I trade on TastyWorks and ThinkOrSwim. Tastyworks is great for quickly and easily entering trades. Very intuitive interface. Commissions are just about as low as you can get. Lacks advanced features, however. 

If you are new to trading, I would actually recommend ThinkOrSwim. Although the interface is more complicated - it's not tough to learn the basics. But, crucially, the "Risk Profile" on the Analyze tab enables you to 'visualize' the trades - which will make the trades make a lot more sense. I think getting a grasp on this is necessary. Less necessary with more experience. You can call them to get a $1.00 per contract commission rate.

I just opened a Tradier account and placed some trades last week (using Trend). So far, so good. Will probably be moving my full margin account from Tasty. Will post a review after more trading.

[akito]

Does anyone have any screenshots of the default web-based interface for tradier? Does it have different pages for making a trade, watching your portfolio of positions, and viewing existing/past orders activity? Curious to see exactly how bare-bones it is.

[Noah Katz]

Not a screenshot, but each account has a Dashboard page w/this info:

 

Total Account Value     Funds Available (Trading)

A More Balances pulldown with 

Cash

Long Stock Value

Long Option Value

Short Option Value

Settled Cash

Sweep

Then position Info: 

 

 

 

 

Symbol	Quantity	Last	Change	Value	Cost Basis	Gain/Loss

 

Along w/the Dashboard page there's an Activity tab with trade history.

That's pretty much it.

 

[cuegis]

I just received an email , from Tastyworks, informing me that they just came out with a new Iphone, mobile app today.

It appears to be an exact replication of everything their regular PC program is.

Ironically, I don't trade through them but, I know they build great software, and this app looks quite good, for those in need of a great mobile app.

Take a look at it.

[kirkr1517]

I downloaded the Tastyworks app earlier this week.  It's a good first attempt, but it's hard to use it for actual trading.  They only have a "curve" view, which is very hard to use.  They're supposed to be coming out with a more traditional table view soon.  For now, I can only use the app to look at my trades, but I still use the web version for the actual trading.