Need a new brokerage -- global, good executions, low fees

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boglerocks
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Joined: Sun Apr 03, 2011 9:08 pm

Need a new brokerage -- global, good executions, low fees

Post by boglerocks » Mon Feb 29, 2016 12:30 pm

I've been using Scottrade for a long time but I'm getting consistently poor executions from them and I want to be able to trade in foreign markets like the TSX-V in Canada. I opened an account with Interactive Brokers but I haven't funded it. I called them this morning to get my username/password and the rep was incredibly rude after a 45-minute wait. I read their Yelp reviews and it sounds like long hold times and rude reps are the norm there:

http://www.yelp.com/biz/interactive-brokers-greenwich

As I read through the reviews, it dawned on me that I primarily trade microcaps so I'm frequently trading many thousands of shares and IB charges commission based on the number of shares traded. I expect I would frequently hit the "0.5% of trade value" maximum commission which could end up a lot more expensive than Scottrade:

https://www.interactivebrokers.com/en/i ... &p=stocks1

I'm not sure where to go from here. I've heard good things about TD Ameritrade and I hope their executions would be better than Scottrade's but I don't think they offer trading in global markets. Should I pay high commissions at IB in order to benefit from their executions and global reach?

boglerocks
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Re: Need a new brokerage -- global, good executions, low fees

Post by boglerocks » Mon Feb 29, 2016 2:26 pm

Check out this comment from Mike M:

http://www.yelp.com/biz/interactive-bro ... 4F4fAWtyNg

Scary thought....

bawr
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Re: Need a new brokerage -- global, good executions, low fees

Post by bawr » Wed Mar 02, 2016 6:35 am

Interactive Brokers are by far the best brokers I have ever used. They are in a class by themselves. The system is very logical and well documented, so there is seldom any need to interact with IB's customer service. (In three years, I have contacted customer service twice, once by phone and once via the internal messaging system. On both occasions, the experience was pleasant.)

bogleocks, have you looked at IB's unbundled commissions? Depending on the types of orders you place, they may be cheaper for you.

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in_reality
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Re: Need a new brokerage -- global, good executions, low fees

Post by in_reality » Wed Mar 02, 2016 7:00 am

boglerocks wrote: I'm not sure where to go from here. I've heard good things about TD Ameritrade and I hope their executions would be better than Scottrade's but I don't think they offer trading in global markets. Should I pay high commissions at IB in order to benefit from their executions and global reach?
Did you look at Schwab?

They offer local trading in 12 countries with a global account. You'd be trading in CAD. [This is not the international one brokerage account for expats/NRAs which is USD only.]

C$14 / trade.
http://www.schwab.com/public/schwab/inv ... al_trading

You can also trade in USD via a regular brokerage account and have access to the TSX.
https://www.caseyresearch.com/brokers-new

My advice is to use broad based index funds but anyway what do I know...

boglerocks
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Re: Need a new brokerage -- global, good executions, low fees

Post by boglerocks » Wed Mar 02, 2016 7:55 am

I caved and funded my IB account. Let's see how it goes. :)

drzzzzz
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Re: Need a new brokerage -- global, good executions, low fees

Post by drzzzzz » Wed Mar 02, 2016 8:29 am

I love IB because of their cheap prices for buying and selling options and stocks and their compilation of all my trades at the end of the year for tax purposes. I don't do penny stocks or make hundreds of transactions a month, but more like 10 trades a week at a dollar a trade which is difficult to beat. I also primarily use their webtrader since using a chromebook and also like their telephone app. Customer service is what is lacking although I find I get my questions answered through their interactive chat feature - unfortunately it takes a few minutes or more to talk to someone. The other downside is when initially depositing funds their hold is longer than I would like (typically about 10 days for a new account).

boglerocks
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Re: Need a new brokerage -- global, good executions, low fees

Post by boglerocks » Wed Mar 02, 2016 10:10 am

I'm about to place my first order at IB for $1,400 (10k shares at $0.14/share). The commission is going to be $7. Not bad. But if it were a $14,000 order it would be $70.

drzzzzz, no java on Chromebooks?

Johno
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Re: Need a new brokerage -- global, good executions, low fees

Post by Johno » Wed Mar 02, 2016 10:44 am

As mentioned, the most significant possible drawback to IB, for an active trader, is if you deal a lot in relatively low price securities. Then IB's $.005/share, 0.5% max commission can come out more than the fixed ~$9 per trade at the somewhat comparable shops (I'm not considering brokers which cater just to full time independent traders, IB straddles that market segment along with true retail, I'm just comparing to true retail shops like Scott, TD etc.).

Also IB and the others having commissions at all is a drawback relative to getting loads of free trades on Vanguard if you can qualify for those. However even if that applies, you need some 'real' trading platform to see the market when you place a trade with Vanguard whose trading platform is thoroughly inferior.

IB is also distinctly superior at margin lending if that applies, much lower rates than the other retail shops, and higher leverage allowed (which doesn't mean it's a good idea to use higher leverage necessarily, but rather that say 25% borrowing at IB is less likely to generate a margin call, when their system allows approximately 75% borrowing, than it would at the brokers using the standard 50% limit).

I left IB for futures trading in IRA because they raised margin requirements considerably above those at TD Ameritrade which I switched to for that activity (again it's not a question of wanting to be more leveraged, but rather more margin means more dead money, in return terms, exposed to the credit of the broker). I still have most of my ETF's in an inactive IB taxable account because they represent a standby source of liquidity (via margin loan) that they wouldn't if I kept them at Vanguard. I rarely trade individual stocks and even my futures trading is for mainly risk management/tax optimizing purposes so it's not very high volume either. TD's futures commissions are higher than IB's, but net TD makes more sense for me now.

normaldude
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Re: Need a new brokerage -- global, good executions, low fees

Post by normaldude » Wed Mar 02, 2016 11:13 am

boglerocks wrote:I opened an account with Interactive Brokers but I haven't funded it. I called them this morning to get my username/password and the rep was incredibly rude after a 45-minute wait. I read their Yelp reviews and it sounds like long hold times and rude reps are the norm there
Interactive Brokers is notorious for having bad customer service. They basically don't want to talk to customers.

As I posted in another thread: One time I called them, because I was thinking of opening an account. I went through the voicemail menu, and then the phone just rang & rang. I didn't even get nice background muzak. After 5 minutes of annoying teeth-rattling phone ringing, I just hung up.

drzzzzz
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Re: Need a new brokerage -- global, good executions, low fees

Post by drzzzzz » Wed Mar 02, 2016 12:04 pm

off topic
boglerocks
chromebooks are great for email, browsing the web, and programs that have extensions or are in the webstore and can be added to the browser; however you can't download and install programs (for security, simplicity, and google control issues) which means you can't download TWS the way it would run on a traditional computer - it's a disadvantage i can live with it since i don't need a virus checker (everything is checked as it goes through google's servers), downloads/updates are done automatically, and i can open up any chrome browser on any machine and find everything the same; when my last chromebook died from me cracking it - just bought another for $99 and only had to sign on to find everything that i had previously set up- way simpler than my days of windows and always having to navigate new operating systems, make changes, and re-installing programs when replacing the computer - much cheaper as well and free cloud storage from google

bawr
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Re: Need a new brokerage -- global, good executions, low fees

Post by bawr » Thu Mar 03, 2016 1:42 am

boglerocks wrote:I'm about to place my first order at IB for $1,400 (10k shares at $0.14/share). The commission is going to be $7. Not bad. But if it were a $14,000 order it would be $70.
boglerocks,

Just for fun, I just created a dummy buy order for 10,000 shares of GLBS, which closed at $0.14 and trades on NASDAQ. IB'S TWS informed me that the commission would be between -$29.50 (yes, that's a negative sign) and $33.50, depending on whether I add or take liquidity, and on the exact venues where the order is executed. So, depending on the types of orders you place, you could actually get paid to trade with IB's unbundled commissions.

My personal trades tend to be longer term, so I usually place VWAP orders with the "attempt to never take liquidity" option selected.

boglerocks
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Joined: Sun Apr 03, 2011 9:08 pm

Re: Need a new brokerage -- global, good executions, low fees

Post by boglerocks » Fri Mar 04, 2016 12:46 pm

I'm loving IB so far. The feeling of control is unparalleled although I only have experience with Scottrade otherwise.

bawr, I was wondering why IB gives me two numbers for commission. It's maker/taker?

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