This post compares the tiered and fixed commission models offered by Interactive Brokers for trading U.S.-nominated ETFs on the London Stock Exchange (LSE). Fixed commissions are set at 0.05% of the trade value, with a minimum charge of $4. In contrast, tiered commissions begin with a lower minimum of $1.70, but they incur additional exchange fees of 0.0045% of the trade value (with a minimum of £0.10) and a clearing fee of £0.06. While tiered pricing can be advantageous for very large trades, this aspect is less relevant for my trading needs.
In practice, for small trades up to approximately $7,200, tiered pricing tends to be slightly more beneficial, whereas fixed pricing becomes cheaper for trades exceeding that amount. However, the differences in costs remain relatively minor, as illustrated in the figures below.
