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2 minutes ago, Noah Katz said:

 

[oops, should be "their" business model]

 

That's the first I've heard of order flow rebate; where are those $ coming from?

 

 

The exchanges compete for order flow by giving rebates to brokers/clearing firms.

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I have read that the brokers sell our orders to the exchanges and that is where they make money. That means we are not getting the best possible price in lieu of low commissions/no commissions. However, with limit orders with options we are ready to accept the prices but it hurts if the trades are not executed because of this.

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19 minutes ago, Maji said:

I have read that the brokers sell our orders to the exchanges and that is where they make money. That means we are not getting the best possible price in lieu of low commissions/no commissions. However, with limit orders with options we are ready to accept the prices but it hurts if the trades are not executed because of this.

That is true, and some brokerages have that as their business model!

No free lunch.

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Can someone translate for me this please?

Tick Size Regime
 
 
Dear Client,

You are receiving this notice as you maintain permissions to trade one or more markets impacted by the MiFID II directive through which the smallest permitted trading increment or, tick size, will be subject to a mandatory regime starting 2 January 2018. This change, which is intended to ensure an orderly market, applies to all EEA traded stocks, depository receipts and certain equity based ETFs with the tick size for a given security based upon its price and liquidity band.

As a result of these changes, exchanges will be cancelling any GTC or GTD orders effective with the 29 December close of business. IBKR, in turn, will look to simulate any cancelled orders for 2 January 2018 after which they will be carried natively at the relevant exchange(s), however, the prices of such orders will be rounded away to comply with the mandatory tick increments. We there recommend that you review and make any necessary changes to GTC and GTD orders prior to the 2 January 2018 market open.

Outlined below is the new tick size table.
 
 Liquidity Bands
Price Ranges 0 ≤ Avg daily # of transactions < 10 10 ≤ Avg daily # of transactions < 80 80 ≤ Avg daily # of transactions < 600 600 ≤ Avg daily # of transactions < 2 000  2 000 ≤ Avg daily # of transactions < 9 000 9 000 ≤ Avg daily # of transactions
0 ≤ price < 0,1 0,0005 0,0002 0,0001 0,0001 0,0001 0,0001
0,1 ≤ price < 0,2 0,001 0,0005 0,0002 0,0001 0,0001 0,0001
0,2 ≤ price < 0,5 0,002 0,001 0,0005 0,0002 0,0001 0,0001
0,5 ≤ price < 1 0,005 0,002 0,001 0,0005 0,0002 0,0001
1 ≤ price < 2 0,01 0,005 0,002 0,001 0,0005 0,0002
2 ≤ price < 5 0,02 0,01 0,005 0,002 0,001 0,0005
5 ≤ price < 10 0,05 0,02 0,01 0,005 0,002 0,001
10 ≤ price < 20 0,1 0,05 0,02 0,01 0,005 0,002
20 ≤ price < 50 0,2 0,1 0,05 0,02 0,01 0,005
50 ≤ price < 100 0,5 0,2 0,1 0,05 0,02 0,01
100 ≤ price < 200 1 0,5 0,2 0,1 0,05 0,02
200 ≤ price < 500 2 1 0,5 0,2 0,1 0,05
500 ≤ price < 1 000 5 2 1 0,5 0,2 0,1
1 000 ≤ price < 2 000 10 5 2 1 0,5 0,2
2 000 ≤ price < 5 000 20 10 5 2 1 0,5
5 000 ≤ price < 10 000 50 20 10 5 2 1
10 000 ≤ price < 20 000 100 50 20 10 5 2
20 000 ≤ price < 50 000 200 100 50 20 10 5
50 000 ≤ price 500 200 100 50 20 10
 

 

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@IgorK I received the same email from IB (even though I don't have any GTC orders open right now).   In case you didn't know, "tick size" is the minimal INCREMENT allowed on the price of a stock (etal) when placing an order.  Eg, most of the stocks that SO trade are $0.01 increment (1% of a USD; one US penny), but some stocks you can trade at $0.0001 increments, while others force you to trade at increments of 5 cents ($0.05), etc.   It sounds like some new rules are going into effect that may tweak tick sizes, apparently based on the trading price and volume (liquidity) - as detailed in their table.  IB is letting you know that any existing (eg GTC) orders on your account are potentially going to be tweaked by the system to match the new rules (regime, in their words), and if you have any such orders you may want to change them yourself (thus making changes the way YOU would prefer verses letting the system change things for you - you might not like the results you end up with).  Sidebar personal rant: I just became aware of this this morning - it would have been nice to have a bit more warning from IB.

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1 hour ago, skydragon said:

@IgorK I received the same email from IB (even though I don't have any GTC orders open right now).   In case you didn't know, "tick size" is the minimal INCREMENT allowed on the price of a stock (etal) when placing an order.  Eg, most of the stocks that SO trade are $0.01 increment (1% of a USD; one US penny), but some stocks you can trade at $0.0001 increments, while others force you to trade at increments of 5 cents ($0.05), etc.   It sounds like some new rules are going into effect that may tweak tick sizes, apparently based on the trading price and volume (liquidity) - as detailed in their table.  IB is letting you know that any existing (eg GTC) orders on your account are potentially going to be tweaked by the system to match the new rules (regime, in their words), and if you have any such orders you may want to change them yourself (thus making changes the way YOU would prefer verses letting the system change things for you - you might not like the results you end up with).  Sidebar personal rant: I just became aware of this this morning - it would have been nice to have a bit more warning from IB.

One of the items that will be most affected is penny stocks, which can trade as small as .0001

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On 12/13/2017 at 2:55 PM, SBatch said:

 

Business model is the same as Tradier, the largest revenue comes from the rebate for order flow.  All US brokers receive this but do their best to hide it.  Those that outsource the front end platform technology can have an extremely lucrative model without charging commissions.

I've been reading a lot of the discussions about brokers and their commission schedules - that's important but I think the more relevant issue is the quality of order fills. I've been trading with ToS but lately I've been very disappointed with the quality and speed of their order fills, especially with SO-triggered calendars. Orders at the mid rarely get filled and then you need to chase or forget about the order. I'm about ready to start looking at other brokers - does anyone else have these kinds of issues?

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Anyone on Tradier using their web interface? All the cost basis figures are wrong for some reason. (They were fine yesterday) Is anyone seeing the same issue? I sent a question over to support. Frankly, this is kinda ridiculous.

 

EDIT:

Apparently, they said an overnight batch process had messed up and they are trying to have it fixed within 1-2 hours from now...

Edited by akito

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58 minutes ago, akito said:

Anyone on Tradier using their web interface? All the cost basis figures are wrong for some reason. (They were fine yesterday) Is anyone seeing the same issue? I sent a question over to support. Frankly, this is kinda ridiculous.

 

EDIT:

Apparently, they said an overnight batch process had messed up and they are trying to have it fixed within 1-2 hours from now...

I think not only the web interface but also the backend is kind of messed up now.  I can't do any order activities at this moment. Only thing working is market data streaming.

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1 minute ago, wr200m said:

@SBatch @clems I suppose when Tradier has an outage of sorts, you guys would experience it from your GUI as well, right? 

Correct.  However, it just began functioning again.

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1 hour ago, akito said:

Anyone on Tradier using their web interface? All the cost basis figures are wrong for some reason. (They were fine yesterday) Is anyone seeing the same issue? I sent a question over to support. Frankly, this is kinda ridiculous.

 

EDIT:

Apparently, they said an overnight batch process had messed up and they are trying to have it fixed within 1-2 hours from now...

As an FYI, this happens to all brokers at some point.  Sometimes brokers get a bad feed from the OCC or their clearing firm and this is the end result.  I experienced it a bunch of times with IB in 2015 before dropping them.

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17 minutes ago, SBatch said:

Correct.  However, it just began functioning again.

The preview finally works now but submit for change or new order still does not get the order in. Tradier said they are working on this but can't give ETA. This is about the longest outage with them in my 5 months with them. I have requested repeatedly they set up an alert system re: system status on their main web site or via twitter. One would think being a smaller API shop they would be nimble enough to implement such a feature. 

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Regarding tradier current status: I have some orders that are on their active working status visible to me, but internally they are filled or canceled - Tradier is working on that right now, but all new orders would be taken in.

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5 minutes ago, wr200m said:

The preview finally works now but submit for change or new order still does not get the order in. Tradier said they are working on this but can't give ETA. This is about the longest outage with them in my 5 months with them. I have requested repeatedly they set up an alert system re: system status on their main web site or via twitter. One would think being a smaller API shop they would be nimble enough to implement such a feature. 

I think order processing may be intermittent. I was able to place a few orders in just a few moments ago.

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We had some issues with IB with 2017 with some options spread order that could not get though during expiration friday if i remember correctly.

Hopefully you guys close whatever position you need today.

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Confirmed that I have an order GTC this morning to close at 2.1 but around their outage period, I adjusted it lower and it did get executed. However, on the web interface as well as my api status query, it stayed as order open for STC at 2.1. 

Tradier manually amended the order status but told me it would not show through the interface just yet. I requested that no matter how long it takes, the original order id must have the newest status at some point for my api to pull in.

In sum, new order should work but old orders whether outstanding or with a change status, I recommend you to manually confirm (say, change the price by a penny and see if it gets through)

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1 minute ago, wr200m said:

Anyone having issue with IB market data? I can't get any ticker now. This Friday has not been good for me.

I had notification about Account Management inaccessible. Not sure about market data.

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IB confirmed this time without arguing - market data went down.

 

hi, my IB TWS crashed and then i logged on but could not see any market data.

US Farm: disconnected

ushmds: disconnected

gdc1.ibllc.com: connected

Mike C: Yes, Market Data went down, out back office is currently working on getting it back up

 

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1 minute ago, traveller said:

IB account management is back up but not reflecting balances margin requirement etc

The same happens this Tuesday. they said it is normal after NY.

Edited by IgorK

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if logged in to IB, dont log out.

I was logged in and data was updating but something was off, so I logged out and then logged back in -guess what -data is not connected. 

 

 

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Well, if you happen to trade through IB, then nothing is manageable at this very moment.

There entire system is down since 2PM,and will probably remain down through the close.

This is SO serious. the  last 2 hours , on a Friday, and you cannot trade at all!

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1 minute ago, cuegis said:

Well, if you happen to trade through IB, then nothing is manageable at this very moment.

There entire system is down since 2PM,and will probably remain down through the close.

This is SO serious. the  last 2 hours , on a Friday, and you cannot trade at all!

I got orders executed through IB. However, I don't get any quotes. Seems like their realtime data feed is offline. Same for stocks and currencies... First time I'm experiencing this kind of outage with IB. 

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Just now, ChrisE said:

I got orders executed through IB. However, I don't get any quotes. Seems like their realtime data feed is offline. Same for stocks and currencies... First time I'm experiencing this kind of outage with IB. 

Me too, and I have been with then since the 90's!

Are you saying that , if you look at quotes on another platform, that IS working, you can still trade, and get filled at IB right now?

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1 minute ago, cuegis said:

Me too, and I have been with then since the 90's!

Are you saying that , if you look at quotes on another platform, that IS working, you can still trade, and get filled at IB right now?

Exactly. I got Kim's official SVXY trade filled via IB like an hour ago or so... No data though, so I was firing a 5.50 GTC order into the blue. And got filled. 

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1 minute ago, ChrisE said:

Exactly. I got Kim's official SVXY trade filled via IB like an hour ago or so... No data though, so I was firing a 5.50 GTC order into the blue. And got filled. 

How did you know that, even though no data was coming through, you were still able to actually trade, and get filled?

I read all of their messages,and none of them informed their customers that this option was available.

I'm lucky to have TOS, so I can see all the quotes, and like you say, I'm basing my limit bids and asks on that , and just throwing it out into the wind, which luckily, I don't really need to....and it is VERY windy today!

 

Wow, you really got lucky.

Fortunately, I don't really have to enter, or exit anything at the moment, which is quite unusual for a Friday in the last hour.

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They acknowledge the data issue... been trying Americas, Europe, and Asian servers... As of right now I can not open new TWS sessions. So if anyone has a live TWS session online, better not close it down... ;-) 

Bildschirmfoto 2018-01-05 um 12.07.46.png

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It just this minute...or in the past 5 minutes, came back on.

EXCEPT for one of the things I have a position in GC futures options.

There are live quotes, and you can trade anything, except GC futures and options!

I think CL,and some other commodities too!

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On 1/2/2018 at 8:12 AM, skydragon said:

@IgorK I received the same email from IB (even though I don't have any GTC orders open right now).   In case you didn't know, "tick size" is the minimal INCREMENT allowed on the price of a stock (etal) when placing an order.  Eg, most of the stocks that SO trade are $0.01 increment (1% of a USD; one US penny), but some stocks you can trade at $0.0001 increments, while others force you to trade at increments of 5 cents ($0.05), etc.   It sounds like some new rules are going into effect that may tweak tick sizes, apparently based on the trading price and volume (liquidity) - as detailed in their table.  IB is letting you know that any existing (eg GTC) orders on your account are potentially going to be tweaked by the system to match the new rules (regime, in their words), and if you have any such orders you may want to change them yourself (thus making changes the way YOU would prefer verses letting the system change things for you - you might not like the results you end up with).  Sidebar personal rant: I just became aware of this this morning - it would have been nice to have a bit more warning from IB.

 

On 1/2/2018 at 9:32 AM, cuegis said:

One of the items that will be most affected is penny stocks, which can trade as small as .0001

Thanks guys.

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It is ironic that ,considering how rare it is for this sort of thing to happen, that both Tradier, and IB, both had their data go down today.

IB recovered around 3PM, for most products, but, the futures/futures options remained down for the rest of the day.

They just came back on at 4PM, right after the equities markets closed.

Very strange!

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2 minutes ago, cuegis said:

It is ironic that ,considering how rare it is for this sort of thing to happen, that both Tradier, and IB, both had their data go down today.

IB recovered around 3PM, for most products, but, the futures/futures options remained down for the rest of the day.

They just came back on at 4PM, right after the equities markets closed.

Very strange!

I am in Canada and din't have this issue. Or didn't notice...

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2 minutes ago, cuegis said:

It is ironic that ,considering how rare it is for this sort of thing to happen, that both Tradier, and IB, both had their data go down today.

IB recovered around 3PM, for most products, but, the futures/futures options remained down for the rest of the day.

They just came back on at 4PM, right after the equities markets closed.

Very strange!

I think it most likely is related to the MIFID II rollout. All data providers/brokers/et al were supposed to be MIFID II compliant by start of this year.

These probably look like programming bugs due to changes needed to be incorporated. Hopefully it will be ironed out soon.

Just my 2 cents on this.

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Hi guys,

I am interested in opening an account with tastyworks. I read alot on this forum about the different brokers, pros/cons and different opinions. I feel that TW's platform would be suitable for a newbie like me.

I checked their website and it seems that you need to go through the whole account opening process to access the platform, ie no paper trading possible before applying to open an account.

am I correct?

thanks for your help

Roger

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Just a quick question for those using Tradier and ONE (OptionNet Explorer).... Is anyone paying the $40 a month in commissions to Tradier AND getting the special pricing through Tradier on the ONE platform?

 

I thought I saw some members had posted they are getting the special pricing for both, but when I setup my account this week, Tradier said I could not get the special pricing on ONE and use the SO discount of $40 a month.

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1 hour ago, frenchroger said:

Hi guys,

I am interested in opening an account with tastyworks. I read alot on this forum about the different brokers, pros/cons and different opinions. I feel that TW's platform would be suitable for a newbie like me.

I checked their website and it seems that you need to go through the whole account opening process to access the platform, ie no paper trading possible before applying to open an account.

am I correct?

thanks for your help

Roger

Yes,that part is true. I have been tempted to open an account with them,since they started. But, they didn't have all of the features that I require to make it worth my while up until now.

There were no commodities,and far more important, futures options, which is a deal breaker for me.

But, they just told me this week, that they just started having futures,and will have futures options by the end of the month.

Plus, they have had a full year of operation, that has apparently gone well so, I have no reasons left to not open an account with them.

They also told me that they have a team of lawyers, that they are paying for, right now,, to fight to get rid of the  "Pattern Day Trader" rule.

The single , most ridiculous rule ever passed!

Just to show how stupid it is.

You can have a six figure account, which I do, and, if you have funds tied up in commodities positions, which l also ,very often do, leaving you with less than $25,000 in the "securities" section of your account, you are pegged as PDT,and are barred from opening any new equity/ETF positions, even with a "total" net liq value, greater than $100,000.

I REALLY do not think that this was the intention of the PDT rule.

This is a universal rule, that applies to any brokerage you might be at. There is no way around it.

But , I really appreciate that TastyWorks has taken this on as a mission, to once and for all, get banished.

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2 minutes ago, cuegis said:

Yes,that part is true. I have been tempted to open an account with them,since they started. But, they didn't have all of the features that I require to make it worth my while up until now.

There were no commodities,and far more important, futures options, which is a deal breaker for me.

But, they just told me this week, that they just started having futures,and will have futures options by the end of the month.

Plus, they have had a full year of operation, that has apparently gone well so, I have no reasons left to not open an account with them.

They also told me that they have a team of lawyers, that they are paying for, right now,, to fight to get rid of the  "Pattern Day Trader" rule.

The single , most ridiculous rule ever passed!

Just to show how stupid it is.

You can have a six figure account, which I do, and, if you have funds tied up in commodities positions, which l also ,very often do, leaving you with less than $25,000 in the "securities" section of your account, you are pegged as PDT,and are barred from opening any new equity/ETF positions, even with a "total" net liq value, greater than $100,000.

I REALLY do not think that this was the intention of the PDT rule.

This is a universal rule, that applies to any brokerage you might be at. There is no way around it.

But , I really appreciate that TastyWorks has taken this on as a mission, to once and for all, get banished.

But this is not true with IB where you have all trading done in one universal account (options, futures, commodities etc.)

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48 minutes ago, Kim said:

But this is not true with IB where you have all trading done in one universal account (options, futures, commodities etc.)

Trust me, it very much is true with IB. Because they are my broker, and I have had more conversations with them, in the past 2 weeks, about this exact issue.

Even though it is one universal account, with 3 sections ("Total"/"US Securities"/"US Commodities), whenever you put on a new "commodity position, cash is immediately "swept" over to the commodities section of the universal account. 

And, it gets even worse, because they don't "officially", visibly, sweep the money back to the securities section, until after the close, even though, the second you liquidate a commodity position, in reality, it does immediately go back to the securities section (if you have your account setup for an immediate sweep of funds to the securities section), and all of the 0's dissappear instantly,and it then reads "unlimited" (with regard to day trades)

I am a bit dissappointed with them because one person tells me , with absolute fact, one thing is true, then, on the next phone call, I am told the exact opposite thing is the way it works.

It even got down to them asking me to provide them with a "screen shot" of my account section that shows 2 things

1- "Total" Net Liq greater than $25,000 ( it was WAY more than that amount), and

2- on the bottom, where it shows how many day trades you have remaining, to show them that it has all 0's for the next 5 days.....

In addition, with a reasonably large account, I have been getting emails, at the end of the day everyday, explaining that I am now pegged as a PDT,and can no longer open any new "equity/ETF " positions, until I ...well, you know the rest of what it says.

I have been with them almost since they opened,because I traded on the AMEX, and Tom Petterfy was a big figure there, going back to the 60's.

When he saw the writing on the wall, that sooner, than later, the floors would shut down, and everything would be electronic, he then opened IB.

They have always been on the cutting edge, especially, in those early days,during the transition from :floor" to "electronic".

But, in the past 2 weeks, specifically over this one issue, I have been very disappointed  with one expert telling me the opposite from the next expert.

They kept having me hold for 10+ minutes, while they moved me along to the next person up on the "food chain":. and then again,and again.

Ultimately, the last person I spoke to, said..."I don't need the screen shot, I can see your account right in front of me, and you are right"

You have to have $25,000 in the "US Securities" section of your account, in order to open new positions in equities/ETF's.

I even called Tastyworks, and, without telling them who my broker was, asked them all about the same issue.

They told me it was a universal, regulatory issue, that applies to all brokerages.

That is when they told me that they have a legal team working on getting the PDT rule permanently revoked.

Because, you know their motto..."trade small/trade OFTEN", so PDT goes against everything they stand for. And I agree!

 

Edited by cuegis

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By the way, I believe someone has to talk to IB on commissions on options on stocks and indexes. With Tradier and Robinhood brokers offers, and partially considering recent TastyWorks $10 commissions cap on single leg, IB becomes really not competitive with regards to commissions on options.

The only reason I still did not switch to Tradier myself is no portfolio margin in Tradier which really useful for our PureVolatility plays. And the lack of option on futures and no plans to implement these features. But I am monitoring and thinking..

 

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Guys, I reside in Canada and use ToS platform from TD. Their commission of $1.25 per contract looks a bit too high. Can you suggest any good and less expensive brokerage available in Canada?

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3 hours ago, Antoxa said:

Guys, I reside in Canada and use ToS platform from TD. Their commission of $1.25 per contract looks a bit too high. Can you suggest any good and less expensive brokerage available in Canada?

Interactive Brokers

Edited by izzo70

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16 minutes ago, izzo70 said:

Interactive Brokers

Thank you, @izzo70

As I can see they charge 1.25 for Canada. But is it for all trades in Canadian account? Or is it for options traded on Canadian exchange only?

aF5X4UGR2Ouz2Gaf6KTSzg0dOV6Ya4.png

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As much as the field has been getting a lot more competitive over the past year, and even with their few faults, I decided that I still have to stay with IB because 80%+ of my trading is in commodities futures options, and I I'm pretty sure, for the moment,they are by far, the best for that.

Those markets, at least the ones I trade most (Gold, Silver, Crude, Soybeans, Sugar, copper etc), are open, and very liquid, 23 hours a day , in some cases.

I'm not crazy, and stay up all night, trading at 3AM.

I actually go to bed by 11 PM, and wake up at 7:30 AM, so I'm not doing anything throughout the night (otherwise you would eventually lose your mind).

But, especially lately, I have been able to put on positions, in the 6 PM (all the markets open at 6PM EST), until around 10PM, and the next morning when I check on them, I seem to have gotten some kind of head start on the next day, by having put on positions that I would no longer be able to put on anymore.

So, for me, the brokerage that can service that aspect of the market the best, is a priority.

 

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The weekend has past and a few cost basis figures are still wrong in Tradier...

 

Edit:

So the problem, at least for me, started last Friday. All cost basis figures for existing positions were wrong. Newly opened positions on Friday showed correct cost basis figures. Looking today, everything has been flipped. Positions opened before last Friday now show the correct cost basis, but positions opened on last Friday now show wrong cost basis figures. Swing and a miss, Tradier.

Edited by akito

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    • By Ringandpinion
      I wanted to start a new topic on recent problems with major retail brokers.  With the recent dropping of commissions and subsequent massive influx of new retail traders (for many reasons), the major retail brokers have all run into slow downs, outages, backlogs and other failures.  I've been aware for sometime that my fills on both TOS and IB have had intermittent problems.  The recent thinkorswim outage was a real pain to me and I didn't get hurt by it, just massively inconvenienced, no doubt others were hit in the pocket book.  I'm a big fan of TOS, mainly because I've been on their system for a long time, their rates aren't the greatest but they don't have any other fees.  The problem I see is that there is no end in sight for these brokers to be overloaded.  Little or no commissions, zero or very little account size, and massive new resources needed on their part to solve the problem.
       
      I don't have a problem with a minimum account size and I would even be willing to pay a little more in fees or even a monthly tithe for a platform to get better fills and steadier service.  I'm starting the broker search now, I'm not looking forward to any of this, I was happy with what I had but I don't think I have that any more.  I'll post my efforts here if anybody is interested and would appreciate feedback from others as well.
    • By cwerdna
      I figured I'd start a general topic on IB since this isn't about commissions.

      I found a quirk w/IB that I'd not seen w/TOS. I bought a FDX call (not a trade discussed here) and had an open sell order on it. With the sell order open, I tried to buy another FDX call and IB won't let me. It says "Order Reject: This account cannot have open orders on both sides of the same US Options contract in any related accounts."

      If I try to override and transmit, it rejects it for the same reason. Known issue? Any workaround or just something I have to live with?

      I can do the same thing on TOS (and am doing it now). it doesn't care. It lets me do that.

      I'd rather not cancel the open sell order on FDX as I'd get hit w/a cancel/modify fee on IB, which is something unheard of on TOS (and most brokerages that I'm aware of).
    • By cmh1008
      Hi there, I am new to using the IB/ TWS platform. My understanding is that the probability of ITM can't be displayed in the option chain in TWS. As a substitute you can use the option's delta, however that does not seem to correlate very well. I would expect deviations in the low one digits but get much bigger differences. For example, in the attached screenshot I am looking at selling a 70.7 delta put on the SPY which should have a probability ITM of around 30% (1-70.7%) , then looking at the quote details shows me a probability of profit 59% which is quite far off? My only explanation would be commisions but is that it? Really stuck here so help is really appreciated? Many thanks!
       

    • By Kim
      I would like to share some parameters of selecting the right broker, based on my personal experience and feedback from our trading community. You can also read our extensive Brokers and commissions discussion on our forum.

      First, lets take a look at excellent Brokers Review published by Barrons. They do it every year, and it's worth to review the results and to read the brokers description.

      In 2018, Interactive Brokers takes the top spot, dominating in range of offerings, portfolio analysis and reports, and costs categories.



      What is more important for us as options traders is the "Best for Options Traders" category. Interactive Brokers is #1 in this category as well.



      What makes IB the best overall broker?

      You can read the Barrons article for details, but let me share my personal opinion.

      I believe that there are three most important factors when selecting the options broker:
      Cost
      Lets assume that you buy a straddle for $2 ($1 each option). With IB you will pay 0.70 per contract. To do a round trip trade is $2.80. This is 1.4% of the cost of the trade. So if my gain is 10%, then I keep 8.6% after commissions.

      If you pay $1.5 per contract, then your total cost is $6. That's 3%. You need 3% gain just to break even.

      Over time, this is HUGE. Commissions are probably the single most important factor if you are an active trader.

      Some brokers also charge a fee per ticket. This is an account killer, especially for smaller accounts. If your broker charges a ticket fee, you need to change brokers immediately.

      Here is an example from Etrade:



      Just to be clear, you will be paying $6.95 PER TRADE ($4.95 for more active traders) In addition to per contract fee. So if you trade for example one straddle, it will cost you (as an active trader) $11.90 for a round trip trade, compared to ~$3 with IB.

      TD Ameritrade is even worse:



      I'm sorry, but this is a robbery. Those brokers simply don't deserve your business.

      IB used to be the cheapest broker, but there are few other excellent options today in terms of cost.

      SteadyOptions members might consider Tradier Brokerage Special Offer. Tradier offers a special $40/Month of Flat Price Trading for SteadyOptions Clients. For $40/month the SteadyOptions client can trade unlimited options trades and there will be no per trade commissions. Please review the link for details.

      eOption also offers a special rate of $1.99 per options trade (or equity trade) plus 10₵ per options contract.to our members. Please see eOption Brokerage Special Offer for more details.

      tastyworks is also an excellent option, especially for larger accounts. They charge $1.00 per contract for opening trades, $0.00 for closing trades (so just slightly cheaper than IB), but they also capped the commissions to $10 per leg. For larger accounts, this means huge savings.
      Execution
      What's the point to have low commissions if your execution sucks?

      Well, IB has one of the best executions in the industry, thanks to its "Smart Routing":
      Unlike smart routers from other online brokers, IB SmartRouting never routes and forgets about your order. It continuously evaluates fast changing market conditions and dynamically re-routes all or parts of your order seeking to achieve optimal execution and maximize your rebate. IB SmartRouting represents each leg of a spread order independently and submits each leg at the best possible venue. From my experience, and based on members feedback, this algorithm does indeed provide an advantage compared to most other brokers. However, members who used Tradier and tastyworks also reported pretty good results.
      Platform
      Having a good and intuitive platform is the third factor that you should consider.
      It should be stable, intuitive and offer fast way to place trades. IB platform requires some learning curve, and some users consider it outdated, but personally, I like it. I might be biased as I have been using for over 10 years now, but I believe the learning curve is well worth it.
      Many users praise TD Ameritrade (thinkorswim) platform for its expensive features, but their current commissions structure makes it terrible for active options traders. Unless you were grandfathered at their older rates, or can negotiate commissions under $1.00/contract with no ticket fee, I would avoid them.
      Other Considerations
      There are some other things that you should consider, such as:
      How is the Customer service? Unfortunately, IB has one of the worst customer services in the industry. Don't expect any hand holding, and don't expect any help in case you have some trading issue. Their philosophy is "our algorithm is always right, obviously you (the customer) did something wrong."  Does the broker charge extra for real time data and how much? How about assignment fee and exercise fee? IB charges ZERO for both, while some other brokers charge $15-20. What are the margin rates? IB has the lowest margin rates in the industry. What happens in case of margin call? IB has the strictest rules regarding margin rules. When you get a margin call (in case of assignment for example), they might liquidate your positions within minutes. It's an automated process, nothing you can do about it, so try not to get a margin call with IB. What about Global Markets? IB is rated #1 by Stockbrokers.com in the Best for International Traders category. It offers very wide range of international markets and products, and also accepts clients from all around the Globe. Many other brokers have limited exposure in terms of countries they accept clients from.  Conclusion
      In this article, I tried to offer some personal perspective on selecting an options broker. In my opinion, Interactive Brokers, tastyworks and Tradier offer the best combination of cost, execution and platform. 

      That doesn't mean there are no other good brokers. This conclusion is based on my personal experience and feedback from hundreds of members.
       
      Additional reading:
      Brokers And Commissions Trading and getting fills with Interactive Brokers Executing Orders in Interactive Brokers Tradier Brokerage Special Offer Tastyworks A New Brokerage Firm eOption Brokerage Special Offer
    • By cuegis
      Have all of the IB customers received the email last night (Mar 17) informing us that we have to change our data feed subscriptions by
      April 1, 2017, otherwise we are going to be defaulted to 20 minute delayed quotes? With each quote being a "snapshot" of a moment in time and no longer "streaming" info?
      I was not 100% sure what I needed to do but, I added a $4.50 package that appears to turn the delayed data back into real-time streaming data.
      I think that was the correct choice, but I just wanted to hear from others
    • By Crazy ayzo
      I'm looking for someone that is a power user of some of the following... Tradehawk with Tradier, Interactive Brokers, Optionnetexplorer ONE, CMLviz TradeMachine... and any other tools that you find particularly useful.   My schedule is fairly flexible.  I'm in the pacific time zone.
      If this is something that interests you either post here or PM me with an hourly rate.  It's ok if you only know some of the tools, I don't expect anyone to know them all.  I can pay via paypal.
      After I get a better handle on the tools, I'd also be interest in working with someone on strategy of non-directional trades.
       
      P.S.  I did get Kim's approval before making such an off-topic post.
    • By Kim
      The impact of commissions on your results can be astonishing.
       
      This excellent article by Business Insider is asking the right questions (and also answering some of them):
       
      When you pay commission fees for online stock trades, where does that money go? Do you get better execution by paying $9.99 to TD Ameritrade than by paying $1 to Interactive Brokers? How much better? Enough to justify the difference in price?
       
      Their conclusions:
      At least 17 million investors overpaying for online brokerage Only 12% of commission fee is used for trade execution at top brokerages Over $1.8 billion per year wasted on unused premium services Lets analyze one specific month, January 2015, and see how different commissions structure can impact the returns of our SteadyOptions model portfolio.
       
      SteadyOptions $10k model portfolio traded 228 contracts in January. If you paid $0.75/contract with no ticket fee, you spent $171 on commissions, which is 1.7% of your portfolio value. While not cheap, but considering the fact that we produced 20.7% ROI in January (12.4% return on the whole account assuming 10% allocation), it is completely reasonable.
       
      However, if you had a ticket fee of $8, in addition to $0.75/contract, you would pay $427 in commissions, more than double. In this case, your returns will be reduced by 4.3%.
       
      This will make HUGE difference in the long term. To see how huge, I went to pro-trading-profits.com, a third party website that tracks performance of 400+ newsletters. I clicked on SteadyOptions performance report and played with different parameters. Using the $0.75/contract with no ticket fee, a $10,000 portfolio would produce $35,693 gains since inception. Adding $8 ticket fee to each trade would reduce the gains to $23,869.
       
      The impact of the ticket fee is especially significant if you have relatively small account.
       
      Of course commissions is only part of the whole package. Other factors include tools, platform, customer service etc. Barron's publishes a comprehensive brokers review every year. Here is the last one. Interactive Brokers (IB) was ranked #1 by Barron's third year in a row. This is the broker I personally have been using for the last 7 years and I'm very happy.
       
      Barron's mention that "IB offers a lot more support to new clients, including individuals, especially those with larger accounts. Yes, using the word "support" in the same sentence as Interactive Brokers (without the modifier "dismal") is a change for us, but the firm has clearly made this a point of focus."
       
      Their conclusion:
       
      "Interactive Brokers continues to have extremely competitive pricing, and the lowest margin fees of any broker in our survey. You may incur some data fees, but the firm takes care of any options-exercise costs, which can generate unexpected fees at many other brokers."
       
      On the open section of our forum, we have couple very useful discussions about brokers:
       
      Brokers and commissions
      Interactive Brokers tips, tricks, webtrader etc.
       
      There is a consensus among our members that IB and TOS by TD Ameritrade offer the best combination of commissions, platform, and execution. If you decide to go with TOS, I highly recommend that you negotiate a commissions structure that does not include a ticket fee.
       
      Here are couple more good articles worth reading:
       
      The Truth Behind Broker Commissions - Learning Markets
      Comparison of online brokerages in the United States
      Relative Importance Of Options Brokerage Fees
       
      For Canadian traders, here is an excellent study on the commissions schemas offered by Canadian discount Brokers.
    • By Kim
      I tried to to buy 1 Apr SPX 1300 put and getting an error message that I have insufficient margin. The message indicates that the margin will increase by 53,985 (see attached image).

       

      I opened a ticket with IB. Their response was:

       

       

       

      I couldn't believe this, but the fact remains.
    • By Bschulz
      I'm opening an account at IB and wondering if there is a promotion code or partner code to use for SO members?
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