Cancel Fee question

M

MoneyMatthew

This is a rookie question but I need to know so I will ask:

If I were to enter a limit order trying to get a fill and nothing happens and I cancel the order and enter a new limit order in an effort to get a fill would I be charged a fee for that action? No trade took place, just a limit order that was later canceled. Would I be hit with any type of fee?

I plan on using eOption as my broker by the way. Again sorry for the options newbie question.
 
You have to ask your broker to find out if they charge for cancellations. The policy from the exchange is by executing broker not by customer. If the broker has a certain ratio of cancels to executions, they will get charged. Then they can determine if they want to pass that on to their clients by some formula. Some brokers like IB, just charge each client a small fee even if they don't personally break the ratio for being charged. I'm not familiar with the policy of eOption.

BTW, not a rookie question. The answer will be different from broker to broker.

Bob
 
Thanks for the quick reply. I will not accuse you of being a shill but could you recommend a low
cost options broker that does not charge a cancel fee? OptionsXpress has a "walk limit" order but they charge like $12.95 per trade unless you do some volume with them. I am going to be placing a small amount of orders. eOption looks like the cheapest out there to me. I will call them later today to see if they charge a cancel fee.
 
When you say "Shill", if that is someone that markets their services, I do that. But that is not why I answered your question. The ticket charge plus per contact model is better if:

-you enter larger trade sizes
-your order is still subject to the public markets

If they offer better commissions and keep their cost down by keeping your order in an option internal dark pool, your execution quality might suffer costing you more than a commission. You will want your order to end up on a public exchange, even if delayed by a fraction of a second.

Good luck,

Bob
 
No offense, you know how people throw the term "shill" around on this site. It looks like TD Ameritrade through the "dough" platform charges $1.50 with no ticket charge. This is the best I can find with no contract minimums.

Would you happen to know if TD Ameritrade sends their orders to a public exchange by default? I do care about execution as well.
 
td does. They get payment for order flow but you can choose the exchange you send your order to or use "best". I have no knowledge of what dough does with your order. Each broker has to get revenues from somewhere. If low volume commissions seem too low, they are offset by something. You should ask them. They might not answer.
 
MoneyMatthew said:
If I were to enter a limit order trying to get a fill and nothing happens and I cancel the order and enter a new limit order in an effort to get a fill would I be charged a fee for that action? No trade took place, just a limit order that was later canceled. Would I be hit with any type of fee?
More...


BMO Investorline doesn't have cancel fees. I think IB will refund cancel fees if the 2nd order is filled - but I'm not sure. Check with your broker.


IMO ...... Any cancel fees is a drop in the bucket compared to the potential lost profit. Your initial view on the option was correct - but you tried to nickel-and-dime the bid/ask by placing an order somewhere in between. If the underlying moves in your direction you don't get filled, so you have to chase the bid/ask. Don't be penny wise and pound foolish - go with the bid/ask on limit orders.



:)
 
rmorse said:
Some brokers like IB, just charge each client a small fee even if they don't personally break the ratio for being charged.
More...

An IB rep just told me the other day that there is no longer a charge for cancel/modify when it comes to US equity option orders. Haven't verified that but thought I'd share.
 
rmorse said:
Some brokers like IB, just charge each client a small fee even if they don't personally break the ratio for being charged.
More...

They do? where can I see this fee on the statements?
 
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