Brokers have the ability to charge their clients for services rendered based on a fee-per-trade unit for each asset class (e.g. stocks, options, etc.), exchange and currency (1). The trade unit is determined by the unit Interactive Brokers uses for its commissions charges and can be on a per share, per contract, or % of trade value basis.
Specify all commission markups on the Client Fees page in Account Management.
Client Fee Templates
Client fee schedules can be applied to accounts individually or can be stored in templates. As a broker, you can configure fees for one or more client accounts, or set up client fee schedules in templates, then assign the templates to client accounts. The use of templates allows you to easily maintain different fee schedules for multiple client accounts.
If you are a new broker (i.e., you just opened your IB account), then there will be a blank default client fee template, which you can then configure with your own fee schedule. If you are an existing broker, your old global fee schedule is now the default client fee template. You can modify the default template but you cannot delete it.
Brokers can specify a minimum amount to charge per trade. The minimum amount cannot exceed the following limits:
Note that you cannot enter both a minimum amount per trade and a ticket charge. You can enter one or the other.
For example, a broker enters 1 in the Min column for Stocks/USD for an individual client account. The minimum broker client fee for a stock trade in USD for that client will be $1.00. A broker would typically set the Minimum Amount in conjunction with other types of client markups for a specific asset class/currency.
Brokers can specify a maximum amount to charge per trade. They can also configure the Maximum Amount as a percent of trade value for stocks in USD and CAD by clicking the check box below the Max entry field on the Client Fees page in Account Management.
For example, a broker enters 5 in the Max column for Stocks/USD for an individual client account. The maximum broker client fee for a stock trade in USD for that client will be $5.00. A broker would typically set the Maximum Amount in conjunction with other types of client markups for a specific asset class/currency.
In another example, a broker enters 1 in the Max column for Stocks/USD for an individual client account, and selects the check box below the Max field, indicating that this Maximum Amount will be calculated as a percentage of trade value of Stocks/USD. The maximum broker client fee for a stock trade in USD for the client will be 1% of the stock trade value.
Brokers can specify a ticket charge per trade. A ticket charge is simply an additional flat fee. You cannot specify both a minimum amount AND a ticket charge for a single asset class/currency.
For example, a broker enters 25 in the % Markup column for Stocks/CHF and then enters 3 in the Ticket Charge column for an individual client. The broker markup for a stock trade in Swiss Francs for this client will be 25% of the Interactive Brokers commission + 3CFH.
Brokers can charge an Absolute Markup per trade. Absolute Markup is a specific amount added to the Interactive Brokers commission. Brokers enter an Absolute Markup in the currency or exchange of the asset class. On the Client Fees page in Account Management, the units listed in the Currency/Exchange/Product Unit column indicate if the absolute markup gets applied to shares, contracts, or % of notional value. Absolute Markup amounts can include up to three decimal places.
For example, a broker enters 1 as the Absolute Markup for USD Stock and Index Options. Later, one IB Smart option contract is executed. The client will be charged $2 ($1 IB commission + $1 Absolute Markup).
Tiered Absolute Amount
Brokers can charge an Absolute Amount from which Interactive Brokers' commission is subtracted. You can set up to three tiers for Absolute Amount based on volume breaks. Brokers should monitor their customers commissions as it is possible for Interactive Brokers to charge more than the client fee.
To set an Absolute Amount, enter one to three fees (Fee#1, Fee#2, Fee#3), and enter volume breaks (Vol#1, Vol#2) on a per trade basis on the Client Fees page in Account Management. The units listed in the Currency/Exchange/Product Unit column indicate if the absolute markup gets applied to shares, contracts, or %. Absolute Amounts can include up to three decimal places.
For example, a broker wants to charge .10% for up to 500 shares of stock/USD, .05% for up to 1,000 shares, and .025% above 1,000 shares, along with a ticket charge of 1USD. The entries on the Client Fees page would look like this:
IB standard UK fees of .1%, and stamp tax of .5% would be subtracted from the absolute fee specified above.
Customer Absolute Tiered Commissions are mutually exclusive from Interactive Brokers Tiered Commissions. They can be combined with IB Tiered Commissions, or one customer absolute rate can be used with IB Tiered Commissions.
Brokers can specify a percentage of Interactive Brokers' standard commission to charge per trade. Enter % Markup as a percentage without the decimal point.
For example, a broker enter 100 in the % Markup column for Stocks/EUR for an individual client, indicating that stock trades for this client will carry a broker markup of 100% of IB's commission. If IB charges 10 EUR for a stock trade, the % Markup will be 10 EUR (100% * 20 EUR). The client will be charged a total of 20 EUR for a stock trade (10 EUR IB Commission + 10 EUR % Markup).
In addition to (or on top of) an absolute fee, a broker can pass any exchange or regulatory fees through to the customer by selecting the Pass Through Fees option. Pass Through Fees can only be entered when Absolute Amounts are set. Brokers can also specify a tiered commission schedule and Pass Through Fees for specific products and specific exchanges, but only in the global fee schedule.
As an example, 1,000 shares @ $.01 per share + Exchange Fee Pass Through of $.003 per share = (1,000 * .01) + (1,000 * $.003) = Total Fee charged of $13.00.