SteadyOptions is an options trading forum where you can find solutions from top options traders. Join Us!

We’ve all been there… researching options strategies and unable to find the answers we’re looking for. SteadyOptions has your solution.

1,264 posts in this topic

Recommended Posts

3 minutes ago, slego said:

Yes with fidelity i tried limit orders for a week but that didnt really work out especially for multi leg purchases. On top of this we are always about 10 mins behind when the trade is placed and then tweeted, so that doesnt help either, and same for the closing. I dont know if i could improve anything into getting into trades, it really seems the ten minute lag and subsequent fill is what makes the difference for the trade to be a winning one. 

The lag varies from trade to trade, but most of the time it is much less than 10 minutes. But this is not really relevant. In many cases you can get better fills by entering/exiting few hours after the alert, or before the alert. We encourage members to learn the strategies and set their own price targets. Honestly, it has nothing to do with the broker. Tradier is using the same clearing firm as IB, so fills should not be very different. And yes, please NEVER use market orders. Market makers will eat you alive. Always limit orders, and be patient. 90% of the time you will get fills similar or better to the official fills. Just read the discussion topics to see how veteran members are using the service. It has been discussed many, many times.

Share this post


Link to post
Share on other sites

When you open multi leg positions, do you open each separately? It seems that when you place an order for multi leg using fidelity, the limit order capability disappears which i guess makes sense because if one goes up, the other goes down. 

Share this post


Link to post
Share on other sites
4 minutes ago, slego said:

When you open multi leg positions, do you open each separately? It seems that when you place an order for multi leg using fidelity, the limit order capability disappears which i guess makes sense because if one goes up, the other goes down. 

Not sure what do you mean. Yes, we place it as one order, never leg in, and it is still a limit order. I'm pretty sure Fidelity has this feature.

Share this post


Link to post
Share on other sites

Perhaps i am still unfamiliar with the details on fidelity platform functionality but i feel i would've seen it by now, allow me to demonstrate. See screenshots below for a single leg and multi:

 

single.jpg

mutli.jpg

Share this post


Link to post
Share on other sites

Maybe members who are familiar with Fidelity platform can comment, but it seems to me that "Net Debit" is equivalent to limit. There is no "limit" option when you drop down the menu for spreads?  

Share this post


Link to post
Share on other sites

and no there was  no limit option in the drop down menu for a multi leg opening, but like you said setting a net debit value does not place the trade until the desired entry is attained. 

Edited by slego

Share this post


Link to post
Share on other sites

Tried the net debit option in fidelity for the EXPE trade posted (which had orders filled at 12:42 pm with 6.97$ net debit per yowster trade), i also set the net debit at $6.97 at 12:53 pm and it wasn't filled by 1:22pm, at which point the stock price had moved too much so i canceled the order. Maybe this one was particularly unlucky but i feel i wont get into many trades using this method, i will keep trying.

Share this post


Link to post
Share on other sites
On 11/1/2019 at 1:19 AM, Yowster said:

Looks like a lot of brokers are finally improving their options commissions.   I think I recently read that Etrade is doing 50 cents per contract with no base fee.

 

 

I do larger trade sizes than the SO ones and I’m considering changing from IB, with the better price deals elsewhere, that would actually save me quite alot in $ terms. Living in Thailand, I can go Etrade (I believe) or Tasty works

Per contract prices -  

76c IB (my current average)

52c Etrade (30+ trades a qtr) (they don’t have a clearing charge and orf is set at 1.7c)

64c Tasty works (open/close average plus 10c clearing and 4c orf)

Etrade is better than IB – but only if I can get near the same pricing on fills?

And tasty works is even better for me than E trade, with their $10 max. cap  

It comes down to, can I get as good executions with the others, as with IB

Reading the below link I have my doubts?  

https://www.stockbrokers.com/guides/order-execution

 

 

I had the following conversation with Tasty works:

·        Me: Hello can you tell me if tasty works receives payment for order flow please?

8 minutes ago

M

Michael

·       Yes, like every other broker, we do in order to keep costs down. You can read more about out it here: https://tastyworks.com/disclosures.html

 

·    

·       Me: Not every other broker does, IB whom I’m with at the moment doesn't. I’m only asking because i can’t be sure my options trade executions will be as good with tasty works as im getting currently with IB?

5 minutes ago

M

2 minutes ago

Michael

·       IB will internalize their order flow so will take other side of customers trades and accept rebates from exchange for flow. Overall, payment for order flow actually creates tremendous liquidity. Without it, liquidity will go away and commissions will go up

Basically IB are doing the same thing as what our liquidity parters do, but they are just doing it in house. You can also read about it on their website here: https://www.interactivebrokers.com/en/index.php?f=563
 

I don’t like changing from what I’m used to but IB is being beaten on price these days, whilst themselves remaining non negotiable on pricing, however I need to know if I’m going to do worse on execution.

I'm thinking i might fund an account at maybe Etrade, since my old Optionshouse account ended up over there, and compare v’s IB, by making the same trade with each broker, same time on separate laptops, as that’s the only way I can see, to get some idea of how it’s likely to go?

 

 

 

 

Share this post


Link to post
Share on other sites

Does anyone have any experience with Robinhood? This is a zero fee zero commissions brokerage available to US residents only (they are about to enter the UK also). I have been using Robinhood for a few months now and it seems too good to be true. My entry and exit prices do not seem any worse than my other options brokerage (Fidelity), however I have not done an exhaustive comparison between the two. The only comp I have is the AMGN calendar in January where my Robinhood/Fidelity buy and sell prices were within ~0.7% of each other, I tried to get the same entry prices but the exit prices may not have been close in timing.

I will try a more exhaustive comparison i.e. try to execute a trade on both platforms at the same time and see how the prices compare.  

I guess my question is - has anyone had any bad experience with Robinhood? They more vulnerable to fraud - as we have seen a "glitch" in their systems already, previously highlighted by @Djtux - should I be concerned about this?

Share this post


Link to post
Share on other sites

@sdrgay, does Robinhood offer desktop platform for option trading? Or do they still only allow trading from a mobile app? I think the absence of desktop app can be a deal breaker for most of the folks here who actively trade options.

As for vulnerability, Robinhood uses Apex as their clearing firm. The same do other firms offering commission free US option trading: Tradier, TastyWorks e.t.c. So your money are actually handled by Apex. The level of funds security should be almost the same among mentioned brokers.

Edited by Stanislav

Share this post


Link to post
Share on other sites
3 hours ago, Stanislav said:

@sdrgay, does Robinhood offer desktop platform for option trading? Or do they still only allow trading from a mobile app? I think the absence of desktop app can be a deal breaker for most of the folks here who actively trade options.

As for vulnerability, Robinhood uses Apex as their clearing firm. The same do other firms offering commission free US option trading: Tradier, TastyWorks e.t.c. So your money are actually handled by Apex. The level of funds security should be almost the same among mentioned brokers.

They have a web desktop interface but i haven’t used that.

Also they don’t use Apex anymore for maybe more than a year.

Share this post


Link to post
Share on other sites

I use the Robinhood desktop platform which is good enough. As a no frills brokerage their resources for background research are poor but the desktop trading interface is fine. Anyone who uses their phone for executing trades will not like Robinhood - their phone trading interface is quite limited. However, hard to beat the zero fees/commissions! 

Share this post


Link to post
Share on other sites
19 minutes ago, Djtux said:

They have a web desktop interface but i haven’t used that.

Also they don’t use Apex anymore for maybe more than a year.

@Djtux, thanks for clarifying that Robinhood does not use Apex anymore. I actually checked Robinhood web site before posting my reply, and found they mention Apex (https://robinhood.com/us/en/support/articles/360001215203/common-tax-questions/). But I did not notice they wrote in one of the answers they started to use Robinhood Securities as their clearing platform in 2018.

Well, this is a big warning sign. As Apex is quite respectful firm that exists many years. And who knows what Robinhood Securities is - looks like an affiliated firm with Robinhood brokerage. So effectively they are self-clearing now.

Edited by Stanislav

Share this post


Link to post
Share on other sites
4 minutes ago, mrw02536 said:

What is their option commissions for our SO trades?

IB commissions will vary, its not a flat fee structure.   However, over the course of many trades it averages out to be about $0.75 per contract (give or take a bit).  A lot of it depends on where the order was filled.   For example, of the official trades that I opened and closed today my commissions were:

  • LYFT closing:  $0.84 per contract
  • BG closing:  $0.18 per contract
  • EXPE opening:  $0.38 per contract

Share this post


Link to post
Share on other sites

I'm using Tradier for a flat $10.00/month. Do we have information about differences in filling trades among the brokers? I was using E*Trade for 25c a contract and find no difference between the 2 in filling trades - not that good.

Share this post


Link to post
Share on other sites

I'm trying to estimate the number of contracts/month (opening and closing), I think it's about 100 for a $20K portfolio. IB could amount to $75.00 in commissions for the month, E*Trade about $25.00. Larger portfolios are proportionately higher. Should this be a factor in lowering costs or does a greater ability to fill trades make up the difference?

Edited by mrw02536
error

Share this post


Link to post
Share on other sites
1 hour ago, Marc Swiss said:

@Kim @Yowster Which broker are you using, IB ?

IB. But this is pretty much the only alternative in Canada. 

10 minutes ago, mrw02536 said:

I'm trying to estimate the number of contracts/month (opening and closing), I think it's about 100 for a $20K portfolio. IB could amount to $75.00 in commissions for the month, E*Trade about $25.00. Larger portfolios are proportionately higher. Should this be a factor in lowering costs or does a greater ability to fill trades make up the difference?

I believe it's more. I tried to count it a while ago and it was around 200 for 10k portfolio.  We have some cheap calendars that will have 40 contracts per trade but also some trades like EXPE with only 4. Average is probably around 10-15. With 20 trades that's around 200-300 contracts give or take per 10k portfolio. 

 

I don't know if thrte is big difference in fills between the leading brokers.

Share this post


Link to post
Share on other sites
36 minutes ago, Yowster said:

IB commissions will vary, its not a flat fee structure.   However, over the course of many trades it averages out to be about $0.75 per contract (give or take a bit).  A lot of it depends on where the order was filled.   For example, of the official trades that I opened and closed today my commissions were:

  • LYFT closing:  $0.84 per contract
  • BG closing:  $0.18 per contract
  • EXPE opening:  $0.38 per contract

My average at IB is also $ 0.75.

Share this post


Link to post
Share on other sites
2 minutes ago, TrustyJules said:

Tradier is definitely the cheapest - I am TW and the cost is about a buck per trade. There are some benefits in the interface being quite intuitive but if I could I would move to Tradier too. Sadly not an option.

Why not? They open international accounts for Belgian residents. 

Share this post


Link to post
Share on other sites

As a comparison, I use Fidelity Investments, which chargers $0.65 per contract.  My commission fees were $319 for January(about 21 trading days, about 200 trades, many with multiple # of contracts) and so far through today, 11th in Feb, it has been $150  (about 110 trades many with multiple contracts).  I know you may be able to do it more cheaply, but I get good trade execution on multiple exchanges, and have the security of knowing I am dealing with a substantial trading broker. 

 

Share this post


Link to post
Share on other sites
1 hour ago, mrw02536 said:

It looks like Tradier has the others beat by a mile with only $10.00/month. Not getting all. the fill is a problem but not filling doesn't lose you money, only potential profit.

Not necessarily true, getting fills to close a trade can be a problem with Tradier.  It’s a trade off against cost per trade that I’ve chosen to live with.  In my experience, while there have been a few trades where closing was an issue, for the most part I’ve matched the official trade returns.

Share this post


Link to post
Share on other sites
11 minutes ago, Wandering said:

Not necessarily true, getting fills to close a trade can be a problem with Tradier.  It’s a trade off against cost per trade that I’ve chosen to live with.  In my experience, while there have been a few trades where closing was an issue, for the most part I’ve matched the official trade returns.

I think measuring fills against the official fills is not the right way to judge a broker. Conditions might have changed, and it's possible that you won't get the same fills with other brokers as well. In some cases fills might be better, depending on many factors (IV, stock price etc.) but it's very difficult to know if you were not filled because of the broker or because of the other factors.

I'm with IB, but in some cases I have orders not filled while I see fills at better prices. For example, today I had an order to close ROKU at 0.95 and was not filled, while seeing fills as high as 1.00.

Share this post


Link to post
Share on other sites
2 minutes ago, Kim said:

I think measuring fills against the official fills is not the right way to judge a broker. Conditions might have changed, and it's possible that you won't get the same fills with other brokers as well. In some cases fills might be better, depending on many factors (IV, stock price etc.) but it's very difficult to know if you were not filled because of the broker or because of the other factors.

I'm with IB, but in some cases I have orders not filled while I see fills at better prices. For example, today I had an order to close ROKU at 0.95 and was not filled, while seeing fills as high as 1.00.

I am an IB customer and sometimes it looks that the IB´s Smart Route order process is not so smart or it is very smart, but with a hidden logic.

Share this post


Link to post
Share on other sites
59 minutes ago, billave said:

As a comparison, I use Fidelity Investments, which chargers $0.65 per contract.  My commission fees were $319 for January(about 21 trading days, about 200 trades, many with multiple # of contracts) and so far through today, 11th in Feb, it has been $150  (about 110 trades many with multiple contracts).  I know you may be able to do it more cheaply, but I get good trade execution on multiple exchanges, and have the security of knowing I am dealing with a substantial trading broker. 

 

Does fidelity have live streaming quotes?

Share this post


Link to post
Share on other sites
4 hours ago, Kim said:

I'm with IB, but in some cases I have orders not filled while I see fills at better prices. For example, today I had an order to close ROKU at 0.95 and was not filled, while seeing fills as high as 1.00.

I have noticed the exact same thing. But phrasing as "some occasions" would be an understatement, it occurs quite frequently at least for me. (I always use "smart" routing)

 

How reliable is this information anyway? When we are seeing these fills for e.g. Calendars, are these really only the orders which have been filled as a Calendar or do they just show a calculated difference between the short and long position ?

Edited by Marc Swiss

Share this post


Link to post
Share on other sites
7 hours ago, Kim said:

I'm with IB, but in some cases I have orders not filled while I see fills at better prices. For example, today I had an order to close ROKU at 0.95 and was not filled, while seeing fills as high as 1.00.

A few days ago we compared fills in real-time with another SO forum member. He is at Tradier, and I'm at IB. We tried to close some NVDA calendars on the session ending when volume is high. I got a few bites with IB, filled maybe 10% of the order, and that's it, despite using Pause/Resume technique. And after I reported my partial fills, the guy at Tradier got fill at 1 cent higher price withing a few seconds. I saw his 1-cent higher fills in Time and Sales, but IB just did not want to fill my lower bid.

 

So, their Smart Routing is definitely not so smart. I would switch to Tradier for option trading immediately if I could..

Edited by Stanislav

Share this post


Link to post
Share on other sites

2All IB users: By the way, I was advised by a person who knows Interactive Brokers internal processes and procedures to write a ticket to IB and explain them that their US Stock Option commissions are not competitive anymore with appearance of brokers like Tradier, Robinhood, eOption e.t.c.

This won't change anything immediately. As we know IB does not negotiate commissions. However, all such tickets are accumulated and then can be taken into consideration. Especially if they receive many similar tickets. 

So if we write them, let's say a hundred tickets, complaining on their US Stock option commission rates, they can at least notice us. And probably over a time come to the idea of modifying their option commission plan.

 

If you are an IB user, consider writing a ticket to IB where you compare their commission plan to Tradier, Robinhood, eOption, and say that for active trading in options IB rates are not competitive now.

 

Share this post


Link to post
Share on other sites
23 minutes ago, Stanislav said:

So, their Smart Routing is definitely not so smart. I would switch to Tradier for option trading immediately if I could..

Why can't you do the switch ? Country restriction to open a tradier account ? I was browsing around on tradiers website and couldn't find any information about which countries they support. 

Share this post


Link to post
Share on other sites
23 minutes ago, Marc Swiss said:

Why can't you do the switch ? Country restriction to open a tradier account ? I was browsing around on tradiers website and couldn't find any information about which countries they support. 

Yes, I talked to them about a week ago, Tradier does not work with residents of my country. As they put it "due to the foreign jurisdiction risk assessment given to us by our clearing firm, Apex". 

For international accounts you need to write a letter to their support and ask if it is possible to open an account.

 

 

Share this post


Link to post
Share on other sites

Just received an email reply from Tradier, telling me that unfortunately they cannot help because 

 

"We cannot open accounts for UK residents as we are not a registered brokerage firm in England."

I suspected this, as a couple of years ago I had had a similar response, so I was hoping that maybe things have changed since.

 

I trade full-time and do a lot of contracts a month, and my charges are really mounting up, so I welcome suggestions from other UK/European trades.

Edited by zxcv64

Share this post


Link to post
Share on other sites
5 hours ago, Stanislav said:

A few days ago we compared fills in real-time with another SO forum member. He is at Tradier, and I'm at IB. We tried to close some NVDA calendars on the session ending when volume is high. I got a few bites with IB, filled maybe 10% of the order, and that's it, despite using Pause/Resume technique. And after I reported my partial fills, the guy at Tradier got fill at 1 cent higher price withing a few seconds. I saw his 1-cent higher fills in Time and Sales, but IB just did not want to fill my lower bid.

 

So, their Smart Routing is definitely not so smart. I would switch to Tradier for option trading immediately if I could..

Unfortunately I have to agree with you. IB used to be the best in terms of commissions and execution - not anymore. Add to this their terrible customer service - and at this point, personally I cannot recommend them anymore. But in Canada, we don't have much choice at this point. 

Share this post


Link to post
Share on other sites
13 hours ago, Kim said:

I think measuring fills against the official fills is not the right way to judge a broker. Conditions might have changed, and it's possible that you won't get the same fills with other brokers as well. In some cases fills might be better, depending on many factors (IV, stock price etc.) but it's very difficult to know if you were not filled because of the broker or because of the other factors.

I'm with IB, but in some cases I have orders not filled while I see fills at better prices. For example, today I had an order to close ROKU at 0.95 and was not filled, while seeing fills as high as 1.00.

Kim, where do you see filled orders in IB? I've seen some people posting real prices for options trades from TOS but I can't find how to view it in IB.  Thank you.

Share this post


Link to post
Share on other sites
15 hours ago, TrustyJules said:

Really? Thanks for the heads up - I last looked into it in 2019 and the answer had been no.

I opened with them late last year, now have both TW and Tradier. Tradier is a bit more cumbersome to use on the mobile though, given that we both travel quite a bit that is actually a real shortcoming 

Share this post


Link to post
Share on other sites
36 minutes ago, Daisy said:

Kim, where do you see filled orders in IB? I've seen some people posting real prices for options trades from TOS but I can't find how to view it in IB.  Thank you.

In "High" column you can see the high of the day.

Share this post


Link to post
Share on other sites

There are some advantages with IB that tradier lacks. For example, OCA orders. For hedges straddles I would have the entire trade closing order open and next to it both short legs with 0.05. If one of them fills, other orders are cancelled. This makes it much easier to trade hedged straddles. With Tradier I have a closing order for the entire trade but have to monitor whether I can close the legs before.

 

 

Share this post


Link to post
Share on other sites
16 minutes ago, Kim said:

In "High" column you can see the high of the day.

 

Thank you. Is there any way to see real prices for filled option trades?  I looked at Time and Sales but I could only see quotes there and not the actual executed trades.  Something similar to the TOS table posted by one of the SO members?TOS.png.

 

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account. It's easy and free!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now

  • Similar Content

    • 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?
  • Recently Browsing   0 members

    No registered users viewing this page.