Brokers and commissions

[Kim]

I must say that it puzzles me why people negotiate a rate with TOS which they can get with IB without any negotiation? The fact that you even need to negotiate to get a good rate speaks volume. And fills at TOS are consistently worse than IB.

[sakura]

Yeah.... @Kim, I hear what you are saying. Actually I even have an account at IB and have been trading it for years already (not too actively, of late). But my account at TOS is a lot bigger and I am using a part of that account for my SO trades. And... I am somewhat lazy in moving some more funds over to IB so I can do my SO trading over there. And, honestly I do not like the TWS platform, at all. I'm very happy with the TOS platforms, both mobile as desktop. But maybe I should give TWS another try. I will give it some more thought ;-)

 

You are of course right about the low commissions and better fills.

Edited September 19, 2018 by sakura

[Zin]

I was able to negotiate with TOS my commissions from 1.5 to 1 per option trade recently. The problem is that TOS would not reduce my option assignment fees which are 15 and increased commissions for a stock from 5 to 6.95. What are assignment fees at IB? 

[Kim]

1 minute ago, Zin said:

I was able to negotiate with TOS my commissions from 1.5 to 1 per option trade recently. The problem is that TOS would not reduce my option assignment fees which are 15 and increased commissions for a stock from 5 to 6.95. What are assignment fees at IB? 

Assigment fee ZERO. 

Exercise fee ZERO.

[Alan]

 

@Kim & @sakuraIf the fills are definitely better with IB, that is important to know.  Also, the absence of assignment and exercise fees is definitely a bonus.

I called IB today to ask a few questions. They told me the following. Please let me know if your experience is different.

1) If one has a 0.70 contract rate at IB & one closes out a short option position between 0.05 - 0.10, the commission drops to 0.50. If the short option is below 0.05, the commission drops to 0.25. I asked if the commission ever goes to zero, and the person I talked to said "no". However, I do believe I have heard IB traders here say that below a certain level they are not charged a commission. For comparison, at TOS there is no reduction in commission between 0.05 & 0.10, but at 0.05 & under there is no commission charged at all.

2) If one is trading index options, IB adds the 0.44 exchange fee per contract to the 0.70 commission. Therefore, the roundtrip cost is 2.28 per contract. I asked if it is possible to negotiate a waiver of the exchange fees if trading large volumes and was told that any negotiation of this would have to be directly with the exchange. I cannot imagine the exchange waiving the fee, but who knows. The person I talked to at IB said that IB would not absorb the fee. This is where TOS appears to be more appealing. If one is at a commission rate greater 0.50, TOS will absorb the exchange fees. If one is under 0.50, they will add the exchange fees.

Note that it is possible to get commission rates much lower than 0.75 (i.e. under 0.50) at TOS, but one will have to trade very large volumes. I imagine the same is available at IB.

If the fills, indeed, are much better at IB, that argues strongly for the SO strategies where it seems that any advantage in fills can make a significant difference is returns.

One of the things that I like to take into consideration when assessing a strategy is scalability. Can the strategy be traded with a large account? It is quite possible that Chris' experience with the fund is a model for trading the SO strategies in large amounts. Hopefully, that is working out well, and he is getting results similar to the SO performance results. It would be nice to know that if I am successful with the SO trades, I would be able to ramp up the account.

That said, with the exception of a few equity options with very large open interest, I generally have looked to index options as the way to potentially trade a large account. Of course, that requires finding a strategy that works - I am still looking. However, if one is fortunate to find such a strategy, the large open interest of index options plus their generally higher prices means that that one can conceivably trade a 5 or 6 figure account. That IB does not absorb exchange fess puts a damper on using them for any such index option strategy.

For those of you with IB accounts, have any of you been able to get a fee structure without the added exchange fee for index options?

 

[Djtux]

5 minutes ago, Alan said:

I asked if the commission ever goes to zero, and the person I talked to said "no". However, I do believe I have heard IB traders here say that below a certain level they are not charged a commission. For comparison, at TOS there is no reduction in commission between 0.05 & 0.10, but at 0.05 & under there is no commission charged at all.

For a single leg option, when you close the position, i think there is no commission if it's 0.01 or 0.02, i don't remember exactly.

https://www.interactivebrokers.com/en/index.php?f=1590&p=options1

"Commissions are not charged for US cabinet buy-to-close trades."

Also note that on single leg options, sometimes you can get rebates as well.

 

For IB, i don't think that they negociate. I might be wrong. What you see is what you get.

[Yowster]

@Alan IB does not have a flat fee structure.  However, I can tell you that having trading thousands of contracts each year the IB commissions (including exchange fees) averages right around 0.75 per contract.    Sometime you pay more, sometimes you pay less, sometimes (rarely) you even get a credit where you are paid to execute the trade.    Option trades for 0.01 are always commission free (and in general trades with options worth only a few cents tend to be cheaper commissions).    Bottom line is that if you trade a lot of contracts each year then your commissions will average out to be pretty close to 0.75 per contract.

[Alan]

20 minutes ago, Yowster said:

@Alan IB does not have a flat fee structure.  However, I can tell you that having trading thousands of contracts each year the IB commissions (including exchange fees) averages right around 0.75 per contract.    Sometime you pay more, sometimes you pay less, sometimes (rarely) you even get a credit where you are paid to execute the trade.    Option trades for 0.01 are always commission free (and in general trades with options worth only a few cents tend to be cheaper commissions).    Bottom line is that if you trade a lot of contracts each year then your commissions will average out to be pretty close to 0.75 per contract.

@YowsterTherefore, if one is trading a wide variety of options (both equity and index), TOS & IB are more a less a wash as far commissions/fees are concerned for most moderate volume traders. The advantage, if true, is the better fills at IB.

What would be interesting is a test. Several of us enter the same exact trade at exactly the same time at IB, TOS, Tastyworks, Tradier, etc., and see who gets filled first & who gets the best fill. Of course, some here have probably already done this.

 If, indeed, the fills are better at IB, trade index options on TOS & the rest either at IB or the other brokerages if the latters' lower commission structure overcomes any fill disadvantages.

[Kim]

2 minutes ago, Alan said:

@YowsterTherefore, if one is trading a wide variety of options (both equity and index), TOS & IB are more a less a wash as far commissions/fees are concerned for most moderate volume traders. The advantage, if true, is the better fills at IB.

What would be interesting is a test. Several of us enter the same exact trade at exactly the same time at IB, TOS, Tastyworks, Tradier, etc., and see who gets filled first & who gets the best fill. Of course, some here have probably already done this.

 If, indeed, the fills are better at IB, trade index options on TOS & the rest either at IB or the other brokerages if the latters' lower commission structure overcomes any fill disadvantages.

Yes, it is similar if you were able to negotiate 0.75 with TOS. To me, the fact that you even need to negotiate while you get much lower rates with many other options friendly brokers is a disgrace. In my opinion, they don't deserve your business. There are too many other excellent alternatives today.

When I argued about rates with TOS Trade Desk Manager, his response was: "IB has a place in this industry much like the discount retail stores do in their industry. It comes down to what the client wants, you can buy a car for 10k that will get your from point A to point B but there is also a market for a 30k car which will do the same but with a better experience."

How arrogant is this? IB is constantly recognized as the best broker by Barrons, year after year, and he compares it to a 10k car? 

[akhouston]

2 minutes ago, Kim said:

Yes, it is similar if you were able to negotiate 0.75 with TOS. To me, the fact that you even need to negotiate while you get much lower rates with many other options friendly brokers is a disgrace. In my opinion, they don't deserve your business. There are too many other excellent alternatives today.

When I argued about rates with TOS Trade Desk Manager, his response was: "IB has a place in this industry much like the discount retail stores do in their industry. It comes down to what the client wants, you can buy a car for 10k that will get your from point A to point B but there is also a market for a 30k car which will do the same but with a better experience."

How arrogant is this? IB is constantly recognized as the best broker by Barrons, year after year, and he compares it to a 10k car? 

@Kim, what's are the known downsides / pitfalls of the Tradier's 40 bucks flat fee offer? How much worse the experience / fills / other stuff that we don't know about? With IB and multiple SO services I am out of several K in commissions, which with Tradier would've been 360 so far. Quite a difference, however this tread makes me think of the proverbial free lunch that is nowhere to be found

[Kim]

2 minutes ago, akhouston said:

@Kim, what's are the known downsides / pitfalls of the Tradier's 40 bucks flat fee offer? How much worse the experience / fills / other stuff that we don't know about? With IB and multiple SO services I am out of several K in commissions, which with Tradier would've been 360 so far. Quite a difference, however this tread makes me think of the proverbial free lunch that is nowhere to be found

 Tradier Brokerage Special Offer topic discusses Tradier. Overall members report good fills and excellent customer service. I would sign up myself, but they don't accept Canadian clients.

The platform is very basic, that's the only downside I'm aware of, but there is Tradier/Tradehawk combo (I think around $100/month), it is discussed in details on Tradier topic.

[Alan]

21 minutes ago, Kim said:

Yes, it is similar if you were able to negotiate 0.75 with TOS. To me, the fact that you even need to negotiate while you get much lower rates with many other options friendly brokers is a disgrace. In my opinion, they don't deserve your business. There are too many other excellent alternatives today.

When I argued about rates with TOS Trade Desk Manager, his response was: "IB has a place in this industry much like the discount retail stores do in their industry. It comes down to what the client wants, you can buy a car for 10k that will get your from point A to point B but there is also a market for a 30k car which will do the same but with a better experience."

How arrogant is this? IB is constantly recognized as the best broker by Barrons, year after year, and he compares it to a 10k car? 

@Kim Unfortunately (or maybe not), when you tried to get lower rates at TOS, they were incalcitrant. I tried too for many years. Remember, I was stuck at 1.50. Then all of sudden, probably because of a global change in the competition, they were willing to lower the rates. It was crazy how many of us were able to get down to 0.75 (& some lower).

The other thing is the rates under 0.50. If one is trading large volumes, it might be worth going for these lower rates in non-index options. Of course, if IB offers the same, and if the fills, as being discussed here, are better at IB, then it wouldn't make sense to switch. That said, in your recent article about brokerages where you showed a study comparing them all, TOS & IB were exactly the same in all aspects except the commissions. Per the information I seem to be getting, the commissions might be better at TOS if trading very large volumes.

Edited September 19, 2018 by Alan

[ChadK]

1 hour ago, Alan said:

2) If one is trading index options, IB adds the 0.44 exchange fee per contract to the 0.70 commission. Therefore, the roundtrip cost is 2.28 per contract. I asked if it is possible to negotiate a waiver of the exchange fees if trading large volumes and was told that any negotiation of this would have to be directly with the exchange. I cannot imagine the exchange waiving the fee, but who knows. The person I talked to at IB said that IB would not absorb the fee. This is where TOS appears to be more appealing. If one is at a commission rate greater 0.50, TOS will absorb the exchange fees. If one is under 0.50, they will add the exchange fees.

I pay 0.01 to 0.02 per contract in "Misc Fees" at TOS.  This is on equity options or index options, on top of my 0.75 rate.

Regarding regular equity stock trades, I was able to negotiate (a long while ago) down to 0.01 per share, $1.00 minimum, $6.95 max.

Why would someone stay at TOS vs IB even if they had to negotiate their rate?  Customer service is quite good (when needed), I prefer their trading platform much more than IB's, and their platform worked behind my company firewall whereas IB's didn't (now they both don't work), and TOS's mobile app is pretty good too.

[Kim]

2 minutes ago, ChadK said:

I pay 0.01 to 0.02 per contract in "Misc Fees" at TOS.  This is on equity options or index options, on top of my 0.75 rate.

Regarding regular equity stock trades, I was able to negotiate (a long while ago) down to 0.01 per share, $1.00 minimum, $6.95 max.

Why would someone stay at TOS vs IB even if they had to negotiate their rate?  Customer service is quite good (when needed), I prefer their trading platform much more than IB's, and their platform worked behind my company firewall whereas IB's didn't (now they both don't work), and TOS's mobile app is pretty good too.

Fair points, and I agree regarding customer service. However, the comparison is not only to IB - there are tastyworks, Tradier etc. 

[Alan]

5 minutes ago, ChadK said:

I pay 0.01 to 0.02 per contract in "Misc Fees" at TOS.  This is on equity options or index options, on top of my 0.75 rate.

Regarding regular equity stock trades, I was able to negotiate (a long while ago) down to 0.01 per share, $1.00 minimum, $6.95 max.

Why would someone stay at TOS vs IB even if they had to negotiate their rate?  Customer service is quite good (when needed), I prefer their trading platform much more than IB's, and their platform worked behind my company firewall whereas IB's didn't (now they both don't work), and TOS's mobile app is pretty good too.

I pay the 0.01-0.02 "Misc Fees" also. I should have mentioned it earlier.

 

[ChadK]

14 minutes ago, Kim said:

However, the comparison is not only to IB - there are tastyworks, Tradier etc.

True.  There are many options (no pun intended) and one size does not fit all.  I have accounts at tastyworks and Tradier (plus ONE) as well.  I have tried many of others over the last decade plus, but for me, TOS is my choice and is worth the potential extra cost.  (I didn't like the TOS comms for the very low priced SO trades...I use Tradier for that.  But the bulk of my trading is not 20 cent spreads, so I use TOS.)

[Crazy ayzo]

Ouch.  I just joined to learn about options.  I've been using my Etrade account.  My A-hole hurts after comparing this to how much I pay for an options trade.

[Paul]

1 hour ago, Crazy ayzo said:

Ouch.  I just joined to learn about options.  I've been using my Etrade account.  My A-hole hurts after comparing this to how much I pay for an options trade.

IF I was you I would just open an account at Interactive.  They might not be the best at all things but they have been pretty reliable for me for more than six years.  Why make life complicated.  They haven't hurt my bottom line.  If you want to get more fussy later, sure, go ahead.  I can assure you that they won't be the difference between a good income and a lousy one.

 

[cuegis]

I just received an email from IB introducing a bunch of new features including a new advanced options trading mobile app, direct deposit, debit cards, and tons more......

Here is the page that it is linked to.....

https://www.interactivebrokers.com/en/general/communiques/2018/news-at-ibkr-09-2018-vol4.php#section-one-drop

 

[Djtux]

3 minutes ago, cuegis said:

I just received an email from IB introducing a bunch of new features including a new advanced options trading mobile app, direct deposit, debit cards, and tons more......

Here is the page that it is linked to.....

https://www.interactivebrokers.com/en/general/communiques/2018/news-at-ibkr-09-2018-vol4.php#section-one-drop

 

Thanks, i have not receive that notification, but i see this :

Quote

Desktop TWS
You can now roll puts and calls in a complex strategy in a single order by using the right-click menu after selecting the complex position in your portfolio. In addition, you can now select and close individual option positions as a complex combination strategy in TWS by selecting individual legs and using the right-click menu to select "Close as Combo."

I never used their roll function, maybe that upgrade makes it usable ?

[krisbee]

2 minutes ago, Djtux said:

Thanks, i have not receive that notification, but i see this :

I never used their roll function, maybe that upgrade makes it usable ?

see this. For high priced stock, i used to have 99delta bto and keep rolling. 

https://www.interactivebrokers.com/en/software/tws/usersguidebook/specializedorderentry/rollover_options.htm

[cuegis]

19 minutes ago, Djtux said:

Thanks, i have not receive that notification, but i see this :

I never used their roll function, maybe that upgrade makes it usable ?

I actually got their debit card when it first came out.

Now they offer around 2.5% on cash balances, so I'm starting to also use it like another checking account.

I think all accounts are SIPC insured for something like $5 million, which is a lot better than $250,000 FDIC at banks.

Edited September 20, 2018 by cuegis

[Larry]

The current listed options commissions at TD Ameritrade are $6.95 per ticket + 0.75 per contract. IMHO, TD Ameritrade offers the simplest and best portfolio margin (T+0 risk at -10%/+12% and < 2x net liquidation value). Neither Tradier, Tastyworks nor Robinhood offer portfolio margin right now, although Tastyworks emailed me and said they would offer it by the beginning of next year. IB offers portfolio margin, but the formula seems quite complex.

So, a question, what's the lowest per ticket charge you've been able to negotiate at TDA? 

[Larry]

I meant -12%/+10%

[ChadK]

25 minutes ago, Larry said:

So, a question, what's the lowest per ticket charge you've been able to negotiate at TDA?

"Most" people at TDA have $0 ticket charge and only pay a per contract fee.  Many (with a fair amount of trading volume history) pay $0.75/contract or less.

[rasar]

This is FYI; I'm posting it here because I don't know where else to post it.

TOS is having problems with their chart price bubbles lagging actual prices. I spoke with customer service and they acknowledged the problem. It is also affecting the and Time&Sales prices. (They had a back-end system change over the weekend, and this is probably a result of that).

[Mattatut]

Anyone using Fidelity? What are your thoughts if you are?

[cuegis]

It seems like IB has recently lowered their rates.

Over the past few weeks, every 2 legged spread has been $1.25, and 3 leg spreads have also been $1.25.

These are not "outliers", they are on every trade.

[skydragon]

I received an email from TastyWorks this week proclaiming that options on futures are now available at TW.   (Just passing along the news.  Contact TW if you'd like more info.)

[gowthamn]

What about portfolio margin? Many brokers don't even offer that.

[cuegis]

I received this email from IB about using their "adaptive algo" feature to create better fills.....

https://www.clientam.com/en/index.php?f=19091

 

Dear Client, Since you place non marketable orders, you may want to try using Patient Adaptive Algo orders instead, as they attempt to achieve the fastest fill at at the best all-in price. Please see our website to learn more about Adaptive Algo orders. To unsubscribe, please modify settings in TWS using the FYI button in Mosaic.

Interactive Brokers

 

[samico]

On 11/30/2018 at 10:36 AM, cuegis said:

I received this email from IB about using their "adaptive algo" feature to create better fills.....

https://www.clientam.com/en/index.php?f=19091

 

Dear Client, Since you place non marketable orders, you may want to try using Patient Adaptive Algo orders instead, as they attempt to achieve the fastest fill at at the best all-in price. Please see our website to learn more about Adaptive Algo orders. To unsubscribe, please modify settings in TWS using the FYI button in Mosaic.

Interactive Brokers

 

Have you tested it already @cuegis?

[cuegis]

2 hours ago, samico said:

Have you tested it already @cuegis?

No, I haven't gotten around to it yet...It definitely looks very interesting

[krisbee]

FYI (if someone doesn't know)

https://www.cnn.com/2018/12/01/business/markets-closed-george-h-w-bush/index.html

 

[siddharth]

With TD Ameritrade and TOS, they are offering me $5 and 55 cents per contract. Is that a good commission rate for Steady Option type trades? I am planning to trade about 100k so basically so 10 times the contracts in the trade guidelines.

[gowthamn]

4 minutes ago, siddharth310584 said:

With TD Ameritrade and TOS, they are offering me $5 and 55 cents per contract. Is that a good commission rate for Steady Option type trades? I am planning to trade about 100k so basically so 10 times the contracts in the trade guidelines.

What is the $5 for? Ticket charge?

[siddharth]

Just now, gowthamn said:

What is the $5 for? Ticket charge?

Yes

[g5harlan]

At Ally my fees are $3.95/trade plus $.50/option. It appears that so long as I am trading a $50k portfolio that my trades typically average between $.70/option for the half units (20 options) down to  $.60/option (40 options) for the full units. These are average costs per option. I cannot comment on how Ally compares to other brokers on filling an order, but I seem to get the trades about the same pricing and fill times as IB. This of course is just a guesstimate. 

[SureTrader]

 

Hey Guys, New to SO here. What is the best mobile platform connected thru Tradier? Trade Hawk and Trend don't have mobile apps. Could you let me know the platform price as well with SO? Also, can we trade futures options in that platform? Thanks

 

[SureTrader]

I came across two brokerages 1. Firstrade and 2. Hrtrader. Both have mobile apps and $0 commissions. Hrtrader needs a minimum of $30K to open and monthly $25 flat fee OR total free if you have 50K daily margin and EOD free cash plus 50 trades mo.

Anyone has experience with them? The reviews on both are average but want to know if someone has real experience.

[akito]

38 minutes ago, Suresh Kampalli said:

I came across two brokerages 1. Firstrade and 2. Hrtrader. Both have mobile apps and $0 commissions. Hrtrader needs a minimum of $30K to open and monthly $25 flat fee OR total free if you have 50K daily margin and EOD free cash plus 50 trades mo.

Anyone has experience with them? The reviews on both are average but want to know if someone has real experience.

FYI, for Firsttrade, I had previously inquired with their support staff about the mobile capabilities of their platform and unless things have changed, their mobile app does NOT support multi-leg option orders. Neither does their mobile web interface. So you would have to either use "desktop" mode on your mobile browser and constantly pan and zoom around or just use their website on a desktop i.e. multi-option orders on mobile is not a good experience.

 

I have not heard of Hrtrader before and while what they offer sounds interesting, I do not see any reviews of them online at all, which seems a little strange...

[zeon]

Question I just opened a account with IB does one need to subscribe to OPRA (US Options Exchanges) to get live data that is an extra cost I was not anticpating

I don't seem to be getting live quotes on options when I attempt to open an option spread It may be a config issue or do I need to add this to get live option pricing  from IB   I did try when the market was open as well

 

[gowthamn]

 

My requirements are:

• I do NOT care about advanced analysis and P/L diagrams. I have another software for that. Just need to execute orders.
• Fills should be comparable to ToS. So fills should be good.
• Has to have an android mobile app which can do multi-leg (up to 4 legs) trades.
• My current commission with ToS is 0.5 per contract and I have no ticket fee. Looking to reduce the brokerage drastically.

 

Any suggestions?

 

[g5harlan]

15 hours ago, gowthamn said:

 

My requirements are:

• I do NOT care about advanced analysis and P/L diagrams. I have another software for that. Just need to execute orders.
• Fills should be comparable to ToS. So fills should be good.
• Has to have an android mobile app which can do multi-leg (up to 4 legs) trades.
• My current commission with ToS is 0.5 per contract and I have no ticket fee. Looking to reduce the brokerage drastically.

 

Any suggestions?

 

- I do not use my broker for advanced analysis.

- My fills have been comparable to IB or just about any other broker I have seen mentioned here that members are happy with.

- I do not know if my broker has an Android app as I do not utilize this.

- My commission is 0.4, but I do have a ticket fee of 2.95. My average commission is 0.46 to 0.48, probably not cheap enough for you to warrant a move.

My broker is Ally. I was already trading options long before I came across SO. I have been pleased with trading SO trades with Ally so far. Yes I would like to get rid of the ticket fee, but with any decent volume the ticket fee becomes less of a concern. If I had not already been trading options and did not have a good commission schedule, I would probably have moved to IB as most here seem to be happy with them.

[Gen88]

On 12/16/2018 at 7:20 PM, zeon said:

Question I just opened a account with IB does one need to subscribe to OPRA (US Options Exchanges) to get live data that is an extra cost I was not anticpating

I don't seem to be getting live quotes on options when I attempt to open an option spread It may be a config issue or do I need to add this to get live option pricing  from IB   I did try when the market was open as well

 

Aren’t all brokers have live feeds? So that’ll be extra on top of commissions for IB

[zeon]

Well I figured out I was originally classified as a professional which had some pretty hefty fees for a live fee. But I changed to non professional which lowered the fees quite a bit in fact the fees are waived as long as you do a small amount of trading every month

 

[g5harlan]

5 minutes ago, zeon said:

Well I figured out I was originally classified as a professional which had some pretty hefty fees for a live fee. But I changed to non professional which lowered the fees quite a bit in fact the fees are waived as long as you do a small amount of trading every month

 

What does IB define as "small amount of trading?"

[zeon]

$30.00 in commisions

[zinc]

Anyone know of any brokers that would be suitable for commission intensive trades (i.e. Creating Alpha TLT trades) that accept Canadians?

None of their suggested brokers there seem to...

[Gen88]

On 4/24/2018 at 9:29 AM, Kim said:

Looking more closely into opening an account with IB. Are these selections still good for the SO trades we do? I don’t really understand the data subscriptions are charged with IB and not others..