Interactive Brokers’ Price and Speed of Execution for Stocks Tops Industry

Posted on June 17, 2008
Tags: Day Trading, Trading Resources |

Interactive Brokers sent this piece of data a while back in a newsletter which I just got around to reading. The findings aren’t surprising, their execution is the best that I’ve tried among several brokers during the 8 years or so that I’ve been active in the stock market. This means that despite issues with their customer service, for active traders and in particular day traders, they’re still a top option. I often get asked about recommended brokerage services, particularly from Israeli traders. I think that if you’re serious about trading then the benefits of using IB are well worth the time and effort spent on learning and adapting to it.

Based on independent measurements, the Transaction Auditing Group, Inc., (TAG), a third-party provider of transaction analysis, has determined that Interactive Brokers US stock executions were 0.35 of a cent per share better than the industry as a whole during the second half of 2007. Unlike other industry touted statistics that highlight the percent of orders improved but don’t consider the dollar amount of the improvement, TAG’s statistics factor in the amount of the improvement, including executions which had dis-improvement and no improvement. In addition, TAG also reported that Interactive Brokers executed orders six times faster than the rest of the industry, at a speed of 0.9 seconds vs. an industry average of 5.6 seconds. The analysis included all market orders of size less than 10,000 shares.

Comments

4 Responses to “Interactive Brokers’ Price and Speed of Execution for Stocks Tops Industry”

jeff on June 17th, 2008 1:17 pm

Fascinating study by TAG. I also like their watches… However they forget to mention that IB are fast because they are not hindered by non-essentials such as tech support and reliable tic and volume data :)
eyal on June 17th, 2008 1:27 pm

You like TAG? They’re nice pieces, although I’m more of an Oris person myself :-) Yes, a package deal with IB, we give you fast and good executions 99.9% of the time, and we don’t want to hear anything about the F’ ups in the other 0.1% regardless of what happened. On the other hand, I have a fantastic customer service experience with TradeStation, always a pleasure to deal with their nice people. Too bad though I wouldn’t want to execute stocks there unless I was stranded on an island with no IB ;-)
Newbie trader on June 18th, 2008 9:09 pm

IB charges on everything !! Even trivial things like when you change your orders, it charges you. (TD Ameritrade doesn’t)
eyal on June 19th, 2008 2:19 pm

Newbie - I’ve never seen those fees on my statements. But even with them I think it’s cheaper to trade with IB. Not just commission wise, but also ease of working the orders, complex order combos and execution quality.