Newbie to IB & Market Data Subscriptions

[bigears]

Hi,

Sorry if this sounds a bit basic and elongated.

I'm relatively new to this field and currently using ODL securities - broker to buy UK traded options (liffe) and have been reasonably successful. I have now decided to try IB to minimise on costs as IB do not charge commissions on traded options while ODL charges £15 a transaction, also the IB lot charges are a bit cheaper than ODL.

Now, on ODL I get FREE live prices for stocks (UK & US) & traded options, but on account opening with IB I was presented with choices for Market Data Subscriptions (please see attachment).

My questions:

1) £20 a month for the liffe market data - is this reasonable as I have this free with ODL? I guess these are what I need If I want to see prices on TWS when trading UK options ?

2) What is 'liffe market depth' ? is this like level II but for options?

3) What is 'Non-professional LSE Level I+' is this the normal live stocks prices?

4) If I do not subscribe to any, I guess I will get no prices at all, is this right (or will you get delayed prices)? How do they expect you to trade?

Many thanks for your help & patience.

 

[Trader333]

I dont trade options but I will attempt to answer your questions:

1) If you don not subscribe to any exchange then you cannot trade any instruments on it. So if you wish to trade Liffe instruments then you have to subscribe to Liffe

2) Market depth is as you have said

3) Yes and non professional means that you are not a brokerage yourself etc

4) No subscription = no prices at all and no ability to trade either


Paul

 

[peterpr]

1) £20 a month for the liffe market data - is this reasonable as I have this free with ODL? I guess these are what I need If I want to see prices on TWS when trading UK options ?

All exchanges charge a fee for real time data. A broker/provider can either absorb that charge or pass it on. If he absorbs it, you can bet your life its reflected in his other charges/trading terms

2) What is 'liffe market depth' ? is this like level II but for options?

and futures - yes. I trade LIFFE futures through IB and find market depth useful for intraday scalping. With IB's 'Book Trader' utility you can trade directly off the current market orders displayed. In quiet periods you can often get a fill inside the spread.

3) What is 'Non-professional LSE Level I+' is this the normal live stocks prices?

Yes - realtime, not delayed. Non-professional fee is much lower than professional

4) If I do not subscribe to any, I guess I will get no prices at all, is this right (or will you get delayed prices)? How do they expect you to trade?

They do offer a number of 'free' realtime exchange services - mainly for the US and FOREX , but it's your choice. If you position/swing trade then you can do so perfectly well off daily/delayed data I guess. They do not offer delayed prices on all exhanges. Not sure about LIFFE since I subscribe but I don't think so.

Granted LIFFE's fee is a bit expensive (but then have a look LME !!).

I have no complaints about IB. They are large and very professional operation with solid reliable technology. They offer over 30 different order types (dependant upon exchange capability of course) and a solid trading API for 3rd party automated trading stuff, so practictically any strategy can be implemented with them.

 

[bigears]

Many thanks Paul & peterpr

This all sounds a bit too much as I’m not even a full time trader for this could cost over £50/month ( for life basic +liffe market depth + realtime lse) on top of a US$10 monthly charge.

New questions:

Q1) Do all of you (full time/part-time traders) pay so much (or more) for data feeds?
Q2) What are the packages like esignal and others offer, do these offer data or just compliment the trader toolset with advanced charting,etc?

To me (right now), ODL looks to be a better value for money as it has free feeds (Live streaming prices for LSE, LIFFE, AIM, NYSE and Nasdaq as long as I trade once a month). Should I try IB as I may be missing on other things ( please tell me)? may be I should keep ODL for feeds and use IB for trading.

Again, thanks for your kind help and clarifications.

 

[knorrie]

Not that I'm recommending it, but you could do as you suggest and keep ODL for the data feed and just use IB for trading without subscribing to any market data. There is a difference between having the account permissions to trade a particular market, and subscribing to receive the data for that market.

If you don't get IB market data you can't use the usual IB trading screen, but you can setup the Rapid Order Entry screen so that it doesn't need market data - you are essentially putting in your orders blind as far as IB's quotes are concerned. Also IB won't charge you $10 flat each month, it's a minimum monthly commission, so if you pay more commission than that in a month there's no fee, and if less you only pay the difference.

So if you were to put one order in on ODL and one or two on IB every month to meet the minimum commission, you'll essentially only be paying the £15 ODL commission for the data, which is quite a discount on paying the full exchange fees through IB.

Personally I'd be pretty uncomfortable about not seeing the actual quotes from the broker I'm trading with, although I suppose it ought to be OK if you were using limit orders all the time.

Another point is that one of IB's terms and conditions is that you have an alternate account to hedge your positions if for whatever reason you are unable to close your positions with them, so from that point of view keeping the ODL account is a good idea anyway.

Good luck in whatever you decide!

KenN

 

[zftrader]

I am pretty sure IB charges commisions on UK equity options (1.70 pounds). Check out this link; http://www.interactivebrokers.com/php/generalAccount/commissionStockIndexOptions.php?ib_entity=IB-CA

 

[knorrie]

Yes of course but ODL charges £1.80 per contract plus a £15 flat fee.

KenN

 

[bigears]

knorrie, many thanks for your valuable input.

Personally I'd be pretty uncomfortable about not seeing the actual quotes from the broker I'm trading with, although .....

I would also feel the same.

Many thanks again.

 

[peterpr]

Many thanks Paul & peterpr
Q1) Do all of you (full time/part-time traders) pay so much (or more) for data feeds?

Exhanges charge what they charge - IB simply pass it on - as do Esignal. They are just another overhead as far as I'm concerned

Q2) What are the packages like esignal and others offer, do these offer data or just compliment the trader toolset with advanced charting,etc?

ESignal's advanced charting and backtesting facilities are good (IMHO), but there are other good one's too which will use the IB data feed. I originally went with ESignal for the data feed but gradually got into the finer points of the charting and back-testing which I now find pretty well indispensible. The problem is ESignal will not use IB data so I end up paying the exchange fees twice !!

It's creases like that that you need to watch out for

 

[def]

The problem is ESignal will not use IB data so I end up paying the exchange fees twice !!

/QUOTE]

Are you sure: http://www.esignal.com/map/ib/default.asp

 

[peterpr]

The problem is ESignal will not use IB data so I end up paying the exchange fees twice !!

/QUOTE]

Are you sure: http://www.esignal.com/map/ib/default.asp

Yep. Amazing just how misleading promotional stuff can be isn't it? In fairness to Esignal, here's the wording off that page:
"eSignal and Interactive Brokers team up to offer traders everything traders need to make their best trades. eSignal’s reliable, streaming market data, charting package and customizable formulas with Interactive Brokers’ electronic system for trading equities, options and futures. All of this seamlessly integrated in one application, so you can go from data to decision to trade quickly and easily"

I guess that is all technically correct, but you could be forgiven for not noticing that IB's TWS doesn't use Esignal data and vice-versa - Caveat Emptor as usual.

I've had extended email exchanges with their techies about it. They say it is low down their priority list (probably because they major on the data themselves). They suggest using Advanced Get Charts - I tried it and wasn't impressed (impossible to use unless connected to a live feed and the exchange is open !!!!! + no provision to import 3rd party historical data at al)l. Ensign looks a better bet - but then that is another $35 or so per month and a new package to learn.

 

[def]

I would have thought you'd be able to use their data and route via IB's API.

 

[peterpr]

I would have thought you'd be able to use their data and route via IB's API.

I can submit an order to IB using Esignal data. That's ok as far as it goes. The problem with it is twofold:

1 The ESignal IB plug in used to finalise the order and submit to IB has restricted functionality compared to IB TWS. In fact it is elementary by comparison.

2. Submitting a market order based on data that is not live from the broker that executes it is unnerving. Sure I can use limit orders but when you are placing 10 -15 orders per day often based on trying to get a fill inside the spread, that is not a serious option.

Even if the Esignal plug in had the functionality of TWS booktrader it would be using non-IB data and therefore likely to involve more slippage and more missed fills.

None of this is intended as criticism of either ESignal or IB - it's just a fact of life. To use ESignal advanced charting etc + the IB order entry functionality the way I do requires paying exchange fees in duplicate

 

[def]

I didn't realize that. Maybe other software such as quotetracker might work for your charting. It's free and will use the IB data.