IB and new CME Cancel/Modify
- Thread starter RAY
- Start date
It looks like the CME is making a push to increase electronic options trading. They are going to be integrating their enhanced options trading platform into the Globex system at the end of the summer. Options trading requires much higher bandwidth than futures trading. The CME is trying to free up bandwidth with these fees.
These fees will also serve as a barrier to entry to firms or individuals trying to compete with the exchange designated options market making firms. Anyone who continuously makes a market in one product based on what's happening in another will be hit hard by these fees.
Bob
These fees will also serve as a barrier to entry to firms or individuals trying to compete with the exchange designated options market making firms. Anyone who continuously makes a market in one product based on what's happening in another will be hit hard by these fees.
Bob
I get below reply from IB. So this does apply to all trading sessions...
This applies to all trading sessions, not just regular trading hours.
The cancellation fee will not apply to stop orders as these order types are not native to the exchange and are simulated by IB.
Stop Limit order, however, are native to GLOBEX, and thus the cancellation fee will apply.
One more reason to not trade via the CME. They do all they can to stack the deck against the little guy via disinformation or no information. If you're looking for a more level playing field, go to the CBOT imho. Do your DD.
YM is going to find more volume!
In this case, I don't think the CME has stacked the deck against the little guy at all. The new rules implemented by the CME are more likely to hit the big automated prop traders.
However, the way IB has chosen to implement cancel/modify fees will hit small traders. Hence, to avoid the problem all that is required is to use another broker.
I do not know why they have chosen to implement the fees in the way they have. It may be that the bulk of the problem is due to Timberhill's own prop trading and so IB has decided to implement a very restrictive fee arrangement for it's retail customers.
Perhaps someone from IB would care to comment?
Is the fee $1 per order or per contract?
Clearly the CME needs some competition in the stock indexes. I think this could hurt them in the currency futures, as there is plenty of retail FX competition.
It seems obvious to me that this is another subsidy they are handing to their members, who resent retail competition for MM. Their mentality has always been that the price of beating the spread is an exchange membership. If you're not part of the club, you should not have the ability to buy the bid.
So basically, we have globex out of the energy market and trying to screw us in the indexes. When's the next shoe going to drop?
Clearly the CME needs some competition in the stock indexes. I think this could hurt them in the currency futures, as there is plenty of retail FX competition.
It seems obvious to me that this is another subsidy they are handing to their members, who resent retail competition for MM. Their mentality has always been that the price of beating the spread is an exchange membership. If you're not part of the club, you should not have the ability to buy the bid.
So basically, we have globex out of the energy market and trying to screw us in the indexes. When's the next shoe going to drop?
Seems about right. There is no need to be anywhere near as restrictive as IB is being, to comply with the CME fee/policy. There must be some other reason to be so restrictive. IB's own trading could be one reason. Or, perhaps they are applying some other standard to a few large/institutional customers.