TOS vs IB commissions

Discussion in 'Online Brokers' started by stevegee58, Jul 20, 2016.

  1. stevegee58

    stevegee58 Well-Known Member

    I've been doing all my live trading from an IB account but I've also had an unfunded TOS account for a few years. I never switched to TOS because of the big commission difference.
    Now that I'm trading index options, I realized that my total fees are actually fairly high at IB. e.g. to put on 6 Road Trip Trades the total fee is $29.32.
    IB's cost breakdown per contract is:
    CBOE exchange fee0.44
    US regulatory fee0.04
    OCC clearing fee0.04

    From the TOS web site it looks like there's a $9.99 ticket plus $0.75 per contract. Is that it? Or does TOS pass along all the fees like IB does?
  2. Jim Clements

    Jim Clements Active Member

    My TOS commission rate is $1.50 per contract, no ticket or other charges. 6 RT trades = $36.00, so IB is less expensive. You can negotiate lower TOS commissions if you are a higher-volume trader; contact TOS to see what you might get.
  3. DGH

    DGH Administrator

    Hi Stevegee58. I agree with Jim...try to negotiate. I'm "grandfathered" in at 90 cents a contract, no ticket charge. Many traders can get a buck a contract or a little more. It's worth a try.
  4. Scott Slivnik

    Scott Slivnik Well-Known Member

    I recommend contacting TD Ameritrade as well. It is MUCH more difficult to obtain lower rates today than years past but never hurts to try. I pay a flat $1.25. I opened an IB account last year but closed it after a couple months as I was saving very little at IB. I have seen a number of claims that IB has superior execution and that has peaked my interest.
  5. tom

    tom Administrator Staff Member

    IB has a minimum commission of $1 so that $0.70 is only correct for more than one contract. When I trade one contract on SPX, the commission at IB is $1.52. For two contracts it is $2.44.
    Sometimes IB will give me really low commissions. I suspect it's when I am providing liquidity they need for the other side of another customer's trade. It doesn't happen every day but at least a few times per month.
  6. AKJ

    AKJ Well-Known Member

    Same experience as Tom. My RUT commissions are lower than SPX (1.23 v. 1.52) I suspect that's due to differences in the Exchange Fee, but haven't felt it necessary to look into it.

    One way I have significantly decreased my commissions is by reducing the number of contracts I trade for level of exposure. Doing 3x a 50/70 BWB is much cheaper on commissions than 6x a 40/50. If you play around with the strikes and wing widths, you can get effectively the same exposure with fewer contracts.
  7. Peavey

    Peavey Member

    A few of us have tried to negotiate with them recently and nobody has managed to get less than 1.25 per contract as far as I know, even with mid 6 figure accounts. If someone has had luck recently, I'd love to hear their negotiation tactics. Anyone that negotiated those nice rates a few years ago, hold on to those accounts.
  8. HowardS

    HowardS Active Member

    IB has better executions. Not even close. Also, IB is much much much more reliable. Since I moved IB has not had an outage, TOS is out all the time.
  9. Jim Clements

    Jim Clements Active Member

    I have been a TOS client since 2008, logged in every trading day, and can count, on one hand, the number of outages during all the years since. In my experience, the TOS reliability record is outstanding. Where are you located, outside the U.S.? Perhaps you have more of a problem with your ISP reliability. Could you please explain what you mean by "better executions" for IB?
  10. HowardS

    HowardS Active Member

    TOS has had tons of issues. when they switched from Penson to their own clearing house many customers had no access for multiple days. That was just the start. There have been numerous problems when TOS has issued new upgrades. On a few occasions I even remember them having to rollback the upgrade. In one upgrade TOS stopped supporting the MAC OS which was on my computer (I was traveling.) No notice was given! I also believe that TOS has had huge issues on very busy days. My recollection is that the WSJ even mentioned how bad TD was on one recent large down day. By then I was long gone. I think Sosnoff took the first team with him when he left TD. (I have great TOS rates, $1.00 a contract flat, no min no nothing extra, but it was not worth it to me.) I still have a small IRA account at TOS, my experience is that IB fills quicker and occasionally at better prices. (IB does not force upgrades, you can pick and chose which version of the software to use.)
  11. Marcas

    Marcas Well-Known Member

    Hi Howard, not that I want to change yours feelings toward TOS but few words from my side.
    Dropping Penson as clearing was obvious move it would hurt everybody if they wouldn't do it. I experienced some pain in process (not with TOS though) as I couldn't hold XXXF stocks any more but better this than other option, right?
    I agree with your opinion about forced updates, it should be done differently but I can live with it.
    I remember down day you mentioned. I couldn't even get touch with them by phone and it was serious. I didn't suffer but was thinking a lot about "what if" scenarios. Talked to TOS after that and was told they learned a lot and will address problem. Telling truth I was glad that I didn't hear that "it was nothing to worry about" or "no big deal". It didn't happen since then.
    Can,t talk about MAC but I'm on Linux and I'm happy to enjoy TOS every day without problems related to platform. My experience is not flawless, sometimes I have to call them because TOS system rejects my orders on line (no charge ofc), sometimes platform displays evidently incorrect t+0 line (didn't happen for long time now) and always TOS crew is willing to help.
    I can't compare TOS and IB as I don't have IB account but I have few others and end up using TOS every day by choice as others I open only when I have to. I'm not telling that TOS is ideal, no, I have a long wish list but I'm with them for few years now and was trading from America and Europe and I'm pleased. In fact I just finalized moving one of my other accounts to TOS today.
    And I have great rates with them :)
  12. Jack

    Jack Well-Known Member

    Here is my own experience. I have been using IB and TOS for 10 years now. They are both very good brokers. I have not seen any difference in execution as I was basically putting the on same trades on both accounts. At times I get a better execution in IB and vice versa. TOS outage is very minimal (I don't even think abouti it) although IB is up 99.99% of the time. One of the things I love about IB is that I hardly ever call them (once in 2/3 yrs?). Everything is DIY. Tax documents are very clear. When interest rates were higher than zero, I used my IB account as my savings account as they offered much higher interest on your cash than the banks. Also IB charges clients the lowest margin interest rate, currently at 1.8%. For TOS, the margin rate is, wait for it, 7.5%!
    However for the types of trade we do here (RTT BB, M3 etc), meaningful options analysis is almost non-existent with the IB platform. I can almost do every analysis in TOS although backtesting sucks. With TOS it is possible not to have to buy ONE. Compared to my grand fathered commissions at TOS, IB charges me 50% higher to trade SPX (my main trade). IB platform is so unconventional that when selling a credit spread you are required to buy it and include a negative sign. I have lost money many times if I forget this. Having to adjust/close many complex spreads in a moving market is a pain in IB. I finally bit the bullet last month by closing my IB account and moving everything to TOS. What a relief! No more buying of a credit spread in order to sell it, with negative signs. To buy a butterfly on TOS I just right click and see all possibilities. Also closing a position is so quick at TOS by right clicking. No more dragging and dropping of many options (with possible human errors) at IB
    Having said all these, if TOS goes out business I will quickly return to IB, not any other broker. For me they are the second best.
    Apologies for the long comment but it's a summary of my 10 yr experience!
    Chuck, watersc, Jose Perez and 3 others like this.
  13. tom

    tom Administrator Staff Member

    I used to have problems with IB's buying and selling positive and negative spread prices until I standardized the way I create the combo orders. I wrote an article about it with a short video:

    It does involve dragging and dropping options into the combo window so I'd say TOS is more fool proof but I haven't had any order problems since I started doing this (knock on wood).
    Rtb, KiwiDon, Jack and 1 other person like this.
  14. Andrei

    Andrei Well-Known Member

    My two cents:
    It is very had to negotiated lower rates with TOS, but if you trade a lot they will do it in very small steps. Because I almost exclusively trade index option, they complain there is not much profit margin for them.
    I remember only one major outage at TOS and a few slowdowns, bur generally it is stable.
    I also have an IB account, but never warmed up to their options trading platform. I traded some stocks and will do it again if I decide to go into stocks, since their margin rates are unbeatable. I also like that they gave me a PM account without some annoying "tests". I may also trade regular options at IB because of lower commissions. Their major drawback is lack of analytical tools for options. I don't see why they wouldn't just buy some company options analytics company merge it into their platform.
    Jack likes this.
  15. 0.44 exchange fee applies to certain stocks only. My average commission with IB has been around 0.75-0.78/contract, sometimes less.

    We had extensive discussions here -

    In my opinion, there is no substitute for IB for active traders. The commissions savings are enormous, and execution is also better than most other brokers.
  16. Harry

    Harry Well-Known Member

    How is their mobile platform? I trade exclusively on my phone with TOS and go to their website only for statements, so curious about the ability to do the same with IB.
  17. I don't know how it is compared to TOS, but many of our members use it. You can ask the question on the discussion topic I linked, I'm sure many members will be happy to help.
  18. John Goldsmith

    John Goldsmith New Member

    Just recently (for the last few weeks) IB has been doing an automatic (forced) updates when signing on. I really don't like this but this seems to be the new norm for TWS. I haven't found any setting to opt-out of these updates and mentioned my concern to their support but their response was "just call us if you have any issues"...
  19. Andreas

    Andreas Member

    John, there is an offline installer. If you install the offline version, then it shouldn't auto upgrade.
  20. Dennis L

    Dennis L Member

    You can set IB to use the "stable" version rather than the "latest" version by clicking on "more options" then setting the version to "stable". I had an issue with the latest version (consuming more CPU and DRAM resources than before, laggy, etc), so just shut it down, selected the stable version, restarted, and all was well again.
    watersc likes this.

Share This Page

  1. This site uses cookies to help personalise content, tailor your experience and to keep you logged in if you register.
    By continuing to use this site, you are consenting to our use of cookies.
    Dismiss Notice