Seven providers have their hooks in me

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pugchief
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Re: Seven providers have their hooks in me

Post by pugchief » Sat Jul 21, 2018 9:04 pm

I think in a lot of cases, free trades aren't all that free when you consider the spread on comparable etfs. Always use limit orders and it becomes less of an issue.
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ochotona
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Re: Seven providers have their hooks in me

Post by ochotona » Sun Jul 22, 2018 7:57 am

I'm asking over on Bogleheads about spreads.
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pugchief
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Re: Seven providers have their hooks in me

Post by pugchief » Sun Jul 22, 2018 8:11 am

ochotona wrote:
Sun Jul 22, 2018 7:57 am
I'm asking over on Bogleheads about spreads.
Please report back.

My issue is not the spread, but the average daily volume. Some of the new 'free' Ameritrade ETFs trade very thinly.
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ochotona
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Re: Seven providers have their hooks in me

Post by ochotona » Mon Jul 23, 2018 10:05 am

I talked to Schwab, and they told me it is possible for an ETF order to fill at a fractional penny, between the bid and ask price if they are separated by a penny. But, it's not possible to predict when you are going to get that fraction of a penny price improvement; it's at the market maker's discretion. So the ETF.COM average spread is still an important statistic, though I might get lucky and catch a break, but you can't count on that.

Today as a test, I traded these no-commission ETFs at Schwab:

I sold 1 share SCHX, and tried to place a limit order at the bid, which failed, I increased it one penny to the ask, and it filled exactly at the ask. Market maker is Schwab.

Then I bought 2 shares SPTL, nothing happened until I put in the ask as the limit price, then it filled, but I got 1/2 penny discount off the ask. Woo-hoo! Market maker is State Street.

So I think this spread problem that Schwab ETFs has is still real... and that in the future, after I vacate my Schwab ETF positions because of Dual Momentum GEM popping into fixed income, I need to:

1. Pay $4.95 per trade and get IVV, VOO, or SPY instead of SCHX when GEM goes back to risk-on, or,
2. Migrate over to Fidelity (iShares for free) or Vanguard. I've been with Schwab for decades, so this is tough for me to consider doing

The Schwab trader did not think trying to trade 6300 shares of SCHX presented a problem. He saw orders for 2k and 3k shares whiz by him on his terminal as we spoke. I suggested maybe I could split my order into 2 or 3 parts, and he agreed with that. So I'm not in need of specialized trading services even for a $422,000 position.

I could split my accounts between Schwab and Fidelity. This is has been discussed here as a resiliency move (what if one of the firms got hacked?). I'd keep my buy-and-hold bond-prone accounts at Schwab, and my Dual Momentum actively-traded equity-prone accounts at Fidelity. That actually makes a lot of sense, now that I think about it.

Yes, Pugchief, the TD Ameritrade ETFs are kinda small, illiquid ETFs. I'll put up with them for my HSA, but I would not for my IRAs. But still way better than the choices at my employer's HSA.
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Re: Seven providers have their hooks in me

Post by Mr Vacuum » Mon Jul 23, 2018 5:32 pm

Fidelity has a refund-all-ATM fees debit card. I haven’t tested it outside the U.S. but it hasn’t let me down inside.
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Re: Seven providers have their hooks in me

Post by ochotona » Mon Jul 23, 2018 6:53 pm

Mr Vacuum wrote:
Mon Jul 23, 2018 5:32 pm
Fidelity has a refund-all-ATM fees debit card. I haven’t tested it outside the U.S. but it hasn’t let me down inside.
That's really common for online banks now. For me, the litmus test is offshore. I was reading the Fidelity website, and I think theirs will work that way, too.
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Re: Seven providers have their hooks in me

Post by pugchief » Mon Jul 23, 2018 8:41 pm

ochotona wrote:
Mon Jul 23, 2018 6:53 pm
Mr Vacuum wrote:
Mon Jul 23, 2018 5:32 pm
Fidelity has a refund-all-ATM fees debit card. I haven’t tested it outside the U.S. but it hasn’t let me down inside.
That's really common for online banks now. For me, the litmus test is offshore. I was reading the Fidelity website, and I think theirs will work that way, too.
Fidelity will still reimburse, but you will pay a 1% foreign transaction fee. Schwab does not charge that fee.
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