Brokers and commissions

[Kim]

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.

[slego]

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:

 

[Kim]

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?  

[slego]

Ahh yes i think you are right, i was misinterpreting what this net debit/credit option was...

[slego]

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 November 5, 2019 by slego

[slego]

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.

[Djtux]

About Robinhood : https://www.bloomberg.com/news/articles/2019-11-05/robinhood-has-a-glitch-that-gives-traders-infinite-leverage

[rick]

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?

 

 

 

 

[Kim]

@richIB used to have a clear advantage in terms of commissions and execution, but I don't think this is the case anymore. tastyworks has a big advantage of capped commissions, which is great for bigger accounts, and I believe their execution should be as good as IB.

Another option to consider is Tradier Brokerage Special Offer 

[rasar]

Schwab buying TD Ameritrade:

https://www.reuters.com/article/us-td-ameritrade-m-a-charles-schwab/charles-schwab-in-talks-to-buy-smaller-rival-td-ameritrade-cnbc-idUSKBN1XV16S

It's going to be interesting to see their plans for ToS.

[skydragon]

On 11/21/2019 at 8:11 AM, rasar said:

Schwab buying TD Ameritrade:

https://www.reuters.com/article/us-td-ameritrade-m-a-charles-schwab/charles-schwab-in-talks-to-buy-smaller-rival-td-ameritrade-cnbc-idUSKBN1XV16S

It's going to be interesting to see their plans for ToS.

Looks like it's official

https://www.amtd.com/news-and-stories/press-releases/press-release-details/2019/acquisition-information-center/default.aspx

[Debby_Tompkins]

Hello Kim,

The information you provided is very informative, thanks a lot. As I'm new to this forum it looks like I am at the right place.

Thanks

[sdrgay]

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?

[Stanislav]

@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 February 9, 2020 by Stanislav

[Djtux]

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.

[sdrgay]

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! 

[Stanislav]

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 February 9, 2020 by Stanislav

[Marc Swiss]

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

[Yowster]

1 minute ago, Marc Swiss said:

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

IB

[mrw02536]

What is their option commissions for our SO trades?

[Yowster]

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

[mrw02536]

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.

[mrw02536]

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 February 11, 2020 by mrw02536
error

[Kim]

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.

[Flameirinhas]

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.

[mrw02536]

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.

[TrustyJules]

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.

[CJ912]

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. 

[mrw02536]

I can add this about Tradier. Their customer service is very responsive. The trading interface is not great but adequate. 

[TrustyJules]

1 minute ago, CJ912 said:

Why not? They open international accounts for Belgian residents. 

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

[billave]

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. 

 

[Wandering]

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.

[Kim]

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.

[Flameirinhas]

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.

[Gen88]

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?

[Marc Swiss]

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 February 12, 2020 by Marc Swiss

[Stanislav]

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 February 12, 2020 by Stanislav

[Stanislav]

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.

 

[Marc Swiss]

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. 

[Stanislav]

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.

 

 

[zxcv64]

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 February 12, 2020 by zxcv64

[Kim]

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. 

[Daisy]

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.

[CJ912]

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 

[Kim]

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.

[slego]

I can second the total cost using Fidelity for commissions having a 10k portfolio, about 130$ for february as of the 12th, and 310$ for january. I trade 90% of the of the posted trades.

[Bull3t007]

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.

 

 

[Daisy]

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?.

 

[Marc Swiss]

Looks like Swiss citizens are in luck with with opening an Tradier account. 

What trading platform are most of the Tradier users here actually using ? Tradiers own plattform ? OptionNetExplorer ? TradeHawk ?

Is live data also included in the flat fee package ?

[Kim]

5 minutes ago, Daisy said:

 

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?.

 

Those look like the actual trades.