Does anyone have a solution for avoiding or decreasing modification fees with IB?

Quote from Gammahedge1:

I'm really not interested in some nitwit telling me to just hit the bid or lift the offer. I trade a lot of contracts (mostly in RUT but some weeklies as well) so I like to work an order a bit depending on a number of factors. Any ideas would be greatly appreciated!
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When you want to change your order because your order will not get filled, don't cancel the first order. Just put the new order and after the new order gets filled, then you might decide to cancel the fisrt one if you think there is a change to get it filled. If IB cancels your first order after you put the second order, you won't be charged cancellation fee.
 
Quote from marcoPolo21:

please clarify

could you be talking about the 0.05 spread only contracts?

0.20 bid x 0.25 ask - no pennies in-between accepted?

marc
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I meant option spreads..such as a put or call spread, butterfly, condor etc. Anything other than just long or short one strike. Multiple strike trades entered as one order don't get charged modification fees.
 
Quote from hajimow:

If IB cancels your first order after you put the second order, you won't be charged cancellation fee.
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Why would IB cancel your first order?

Should they not leave it alone and leave the decision up to you?
 
Quote from hajimow:

When you want to change your order because your order will not get filled, don't cancel the first order. Just put the new order and after the new order gets filled, then you might decide to cancel the fisrt one if you think there is a change to get it filled. If IB cancels your first order after you put the second order, you won't be charged cancellation fee.
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Isn't that a bit risky with a fast-moving underlying ?
 
Quote from Gammahedge1:

They won't cancel your order and thats a retarded way to trade options by placing more orders rather than changing your price
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I agree. Cancellation fees are part of your cost at IB. If your strategy requires many changes, find another broker. Are the cancel fees material?
 
Quote from syswizard:

Isn't that a bit risky with a fast-moving underlying ?
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Do you understand what he is doing?

Hajinow is operating close to his margin limit. When his second order is filled, he no longer has the buying power to support the first order, so IB cancels it. Since the first order can not be reached without the second order being filled, it is not that risky.

This is a pretty well known trick with IB and option cancel fees. It has been mentioned on this board a number of times.
 
Quote from Gammahedge1:

They won't cancel your order...
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They will, if your account balance won't support the trade once the second order has been filled.

If you are leveraged up like Hajinow, it is retarded not to trade this way.
 
Quote from Kevin Schmit:

Do you understand what he is doing?

Hajinow is operating close to his margin limit. When his second order is filled, he no longer has the buying power to support the first order, so IB cancels it. Since the first order can not be reached without the second order being filled, it is not that risky.

This is a pretty well known trick with IB and option cancel fees. It has been mentioned on this board a number of times.
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Kevin, you made my job easy. Thanks :)

I have paid $7000 for commission this year and I have only less than $2 cancellation feel for the whole year. Last year it was about $20. I have paid $1000 interest on margin and I have cancelled at least 200 orders. So you see cancellation fee for an active trader is nothing compared to other costs.
 
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