Why is my option commission so high?

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

  1. JSOP


    And further to my previous post, I even unchecked "sweep to fill" and checked off "post only" when routing limit orders to the specific exchange via direct routing to basically guarantee that my limit orders would be as passive as possible and will guarantee to be adding liquidity to the exchanges and in no way will remove liquidity from the exchange that I sent the order to.
    #41     Oct 29, 2021
  2. def

    def Sponsor

    They also say this, but let's cherry pick and put things out of context as we are as transparent as possible and you know it. Clients can check their rebates against the exchange base fee rebate. But as we all know there are outliers and which need to be included in the legal blurb.

    IBKR-PRO Tiered Commission Structure for Orders Routed to Exchanges: Under IBKR's Tiered
    commission model, IBKR passes to Tiered commission clients some or all of certain rebate payments IBKR receives for executing stock orders at exchanges, although the Tiered commission model is not intended to be a direct pass-through of exchange and third-party fees and rebates. For example, IBKR may receive enhanced rebate payments for exceeding volume thresholds on particular markets, but typically will not directly pass these enhancements to clients. Likewise, IBKR does not pass to clients all of the rebates IBKR may receive for orders in pink sheet or OTCBB stocks.
    #42     Oct 29, 2021
    qlai likes this.
  3. lpope


    Def, this is my experience as well trading less liquid instruments, especially options. I'll place a limit order inside the bid/ask and get an order being held and monitored message, presumably because IBKR considers it too far away from the market despite being inside NBBO. This behavior leads to missed executions and higher fees. Don't think it's malicious or anything but it feels like compliance run amok.
    #43     Oct 29, 2021
    qlai likes this.
  4. qlai


    Was your order too large compared to other levels in the book? Why didn’t you split the order into multiples and sent to different exchanges? Brokers would rather loose your business than deal with compliance inquiries from FINRA.
    #44     Oct 29, 2021
  5. lpope


    The conflict was with market participants in general, not from trading against IBKR flow, so the implication of what you said about Timber Hill's closure is wrong. Peterffy has always been an outspoken critic of payment for order flow, probably to the detriment of his net worth, and he wasn't comfortable being in the business of buying AMTD flow and trading against it. IBKR is about the most ethical financial institution around.

    The sad thing about what transpired is I think having practical markets people around enhanced the product offering. Not being able to place an order inside the NBBO is what you get when programmers and compliance rule the roost.
    #45     Oct 29, 2021
    eastern_warrior likes this.
  6. JSOP


    No you don't understand. The order wasn't even sent to the IB servers at all!! They were just sitting in my TWS so the size is irrelevant. I dunno how the manager could see my TWS. Like I said that manager was just being an a$$ making up s***.
    #46     Oct 29, 2021
  7. JSOP


    Not cherry-picking but sharing my personal experience of what IB did and judging from other people's posts, still does. You said previously you didn't know about this order routing practice, I am telling you about it.

    Like I said, I already voted with my wallet but I am posting these information here for people to be aware. No matter how you spin it, what happened is what happened.
    Last edited: Oct 29, 2021
    #47     Oct 29, 2021
  8. JSOP


    I agree with that (not about the most ethical financial institution around) but on the issue of not PFO, yes they did close down Timber Hill due to not wanting to have a conflict of interest against traders i.e. not wanting to trade against the clients and also because they were losing money. I am not wrong on that but @def, this IB rep here took it personal on the part that it got closed down also due to it not making money and decided to spin it to sing a praise song about it not wanting to trade against the clients meanwhile at the same time remaining aloof about its order routing practices and discrediting me at the same time. It's like a thief who stole millions of dollars from people's houses but at the same time let everybody know with every chance it gets that it helped an old lady cross the street at the same time when he was crossing the street himself. LOL

    Trust me, when IB chooses to be "ethical" about one thing, it does something else "interesting" to compensate for it and at the end regardless whether it's programmers or compliance's fault, the bottom line is Paterffy's net worth is not getting smaller, it's getting larger. LOL
    Last edited: Oct 29, 2021
    #48     Oct 29, 2021