Avoid cancellation charges

[FullyArticulate]

Quote from Option Trader:

What's the sense of this one? Is this IB or PHLX?

According to a 19b from PHLX with the SEC:

"the Exchange adopted a cancellation fee of $1.10 per cancellation order to be assessed on member organizations for each cancelled AUTOM-delivered order in excess of the number of orders executed on the Exchange by that member organization in a given month."

So, it's not exactly what IB is charging, structure wise, but is relatively close.

 

[daniel5198]

Quote from FullyArticulate:


Futures Options avoid this mess, thankfully. [/B]

r u saying options on ES, ER2 etc. don't carry cancellation fees in IB?

 

[def]

Quote from Linda Options:

FullyArticulate
e.

In addition, I have been told by many floor traders that if your primary concern should be execution and not commissions. If you lose $0.10 on a trade with 10 contracts because the broker is not as good as another, that will cost you $100 in slipage. Thinkorswim's commmissions are $15 for the trade. If you find someone to do the same trade for $7.50 but they lose you $0.10, are you better off with the cheaper commissions? I cdertainly don't think so.


Linda

Linda - I certainly hope you are not implying TOS offers better fills than IB. I doubt the routing statistics would reveal that. "thinkorswim, Inc. and its executing brokers Citi Group Global Markets, Citadel Execution Services, Knight Execution Partners, Merrill Lynch and Interactive Brokers LLC, Automated Trading Desk Financial Service LLC (ATD) may participate in programs which result in their receipt of remuneration, compensation or other consideration for the placing of orders with other broker-dealers, exchanges and market centers for execution. Finally, the executing brokers mentioned above may internalize customer orders as long as the execution results in a fill at the prevailing market price or better. "

Your question can also be asked "If you find someone to do the same trade for $7.50 , instead of $15, at the same or better prices, are you better off with the cheaper commissions?" I certainly think so.

 

[SideShowBob]

I'd say linda is correct about a good broker when it comes to trading futures with the thieves on the NYBOT or CME floors....

...but trading options electronically with 5 different ECNs is a very different game, and I'd prefer to pay less in commissions than to pay more.....

 

[Option Trader]

Sorry for changing my mode but in as much as we try to avoid cancellations and cancellation charges (as per the name of this thread) they seem to keep haunting us (we do OCA group orders as well).

Today, a bunch of our orders got cancelled automatically, which IB customer service has already said to us before gets charged to the customer. Last time, I thought it was only because we went a bit over the SMA during the last 10-15 minutes which caused a need for a small liquidation (100 shares). This time however, there was still a bit of buying power left, but seemingly all orders that could not get filled with that leftover SMA buying power were cancelled (in the last 10-15 minutes??).

I wish there would be more grace in this area.

 

[loufah]

Quote from Linda Options:


In addition, I have been told by many floor traders that if your primary concern should be execution and not commissions. If you lose $0.10 on a trade with 10 contracts because the broker is not as good as another, that will cost you $100 in slipage. Thinkorswim's commmissions are $15 for the trade. If you find someone to do the same trade for $7.50 but they lose you $0.10, are you better off with the cheaper commissions? I cdertainly don't think so.

Sure. You should include total cost for the trade, including
- commission
- cancel charges
- whether your order will get sent to all exchanges (one of my brokers won't send to BOX)
- whether your order will participate in PIP
- whether your order will get sent to the exchange with the best price (one of my brokers sends to a predetermined exchange, and you might not get a fill even if you're at the NBBO)
- whether your broker will take the trade to the floor to get a better fill (one of my brokers does this for almost all combo orders, and it's admittedly kind of a pain that it takes a couple minutes to get a cancel acknowledged)
- whether your broker has contracted with others (I think Goldman does this) to occasionally give you your 10-lot-or-larger fill even when the counterparty is offering fewer.

 

[omcate]

Quote from daniel5198:

r u saying options on ES, ER2 etc. don't carry cancellation fees in IB?

As of today, CME does not charge any fees for canceling or modifying orders related to options on futures. Hence, Interactive Brokers does not charge customers for canceling these orders either.

In fact, I ***THINK*** if orders related to options on futures are filled, you get execution credits, which are applied against cancel or modify fees for option trades.

 

[Option Trader]

Are you sure IB does not charge anymore?

E.g. they charge for BOX on equity options, although my understanding is BOX doesn't charge.

 

[omcate]

Quote from Option Trader:

Are you sure IB does not charge anymore?

E.g. they charge for BOX on equity options, although my understanding is BOX doesn't charge.

I was talking about Options on Futures listed at CME, such as ES options, ER2 options, NQ options, not equity options listed at CBOE, ISE, BOX, etc.

 

[Option Trader]

I know. But why would that be an obvious reason to make a dif what IB does?