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I want to talk today about commissions. Lets assume that you buy a straddle for $2 ($1 each option). I have an account with IB (Interactive Brokers) and pay 0.70 per contract. So for me 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. Some brokers charge you per ticket fee plus per contract fee. This might be a good deal if you do a lot of contracts. For example, if you do 20 contracts and pay $5 per ticket plus 0.30 per contract, then you pay 0.55 per contract. But if you do just 2 contracts, then it's 2.80 per contract. Also some brokers charge a fee per ticket per leg, others per ticket for the whole spread. For RIC which is 4 leg trade, it's a huge difference. Since you make it as one trade, you might pay one per ticket fee with some brokers or four fees with others. Commissions is one of the reasons why I don't like cheap stocks. A straddle on a $100 stock might cost around $5.00-6.00. Paying $2.80 commissions is only 0.5% of the trade. But straddle on $15 stock can be only $0.70, so $2.80 is 4% of the trade. A huge difference. When choosing a broker for those strategies, remember that commissions can make a huge difference. Check the fine print and do the math which broker is better for you based on the number of contracts you are going to trade. Update: For those who don't want to read the whole thread, it seems like most members really like IB. Barrons's agrees: Based on Barron's numerical calculations, Interactive Brokers (interactivebrokers.com) claims the No. 1 spot overall for the third-straight year. http://online.barrons.com/articles/SB50001424053111904628504579433251867361162

This demonstration shows how to execute some of our trades in Interactive Brokers. Download video: Executing Orders in Interactive Brokers.wmv

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.

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!

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).

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.

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.

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

I'm opening an account at IB and wondering if there is a promotion code or partner code to use for SO members?

Options Trading is a business. As in any business, there are costs. One of the major costs is commissions that we pay to our broker (other costs are slippage, market data etc.) While commissions is a cost of doing business, we have to do everything we can to minimize that cost. This is especially true if you are an active trader. 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): Click here to view the article