Why is my option commission so high?

Discussion in 'Interactive Brokers' started by LM3886, Oct 26, 2021.

  1. JSOP


    TDA is PFO on options big time and that's how it gets low fees. As far as I know, IB actually sends your option trades to exchanges unless disclosed otherwise. It used to own an option exchange Timber Hill before it closed it down citing conflict of interest (real reason I suspect is because it wasn't making money)
    #11     Oct 26, 2021
  2. LM3886


    What's PFO?
    #12     Oct 27, 2021
  3. LM3886


    Do you think TOS's execution is better?
    #13     Oct 27, 2021
  4. LM3886


    Found their page for CBOE fees. But according to that I should pay nothing? (ETF Penny Pilot < 100 contract) But there is also the footnote condition which I don't really know.
    #14     Oct 27, 2021
  5. JSOP


    Payment For Orderflow
    #15     Oct 27, 2021
  6. JSOP


    This is what you need to look at: https://www.interactivebrokers.com/en/index.php?f=1590&p=options7

    You have to add all of the fees together and that's your options commissions PER contract.
    #16     Oct 27, 2021
  7. traider


    Trade SPX or ES options to save on commissions since your size almost warrants it.
    #17     Oct 27, 2021
  8. def

    def Sponsor

    Timber Hill never said the reason for shutting was conflict of interest and it was a derivatives market maker and not an option exchange. A side benefit of shutting down was removal of that question by people who never believed TH didn't see IB flow. Yes, TH became less profitable in the US primarily for not getting into the payment for flow and HFT game. With the resources and capital available, it could have easily done so.

    IB does add/remove exchange liquidity games but do look at quality of execution on those offering flat fees. You can find where they are selling their flow if you search for the firms 606 reports which are publicly available.
    #18     Oct 27, 2021
    ITM_Latino and jys78 like this.
  9. taowave


    I find TOS execution better and my all in costs are a fraction of IB.

    I spend 28 percent of my profit in commission at TOS ..

    I provide liquidity and make 2 to 5 cents per trade

    If I was at IB, there would be no profit.

    #19     Oct 27, 2021
    LM3886 likes this.
  10. LM3886


    I have a similar observation, too. The additional commission at IB didn't seem to get me better executions than TOS.
    #20     Oct 27, 2021
    JSOP likes this.