IB and new CME Cancel/Modify

mats · May 27, 2005

what will happen when you use autotrader of trading technologies? I send many bid-offers automatically during the day to some future products.
I can not imagine that I will be affected by the new rule. Just spoke to cme, and they say its for Globex terminal users only.

Thanks

futrader22 · May 27, 2005

Quote from bigbob:

So if I execute two 1 lot orders, I get a $10 credit towards cancels/mods, but if I execute one 2 lot order, I only get a $5 credit. Correct?

Bob

Sounds that way to me. Also, seems like a simple way to game IB's fees, at least if you trade more than 1 lots normally. Just break up your order into a few pieces when ever you need more credits.

j1900q · May 27, 2005

I emailed IB about this, don't really think it affects me. Hope to know more in a day or two. Went to cme and could not find a thing on this. Have a good day.
Keith

reiehaxm · May 27, 2005

So.........is this only going to take money from the Johnny one-loter that moves his/her stops and limits around?

If this is per trade...how can it hurt a big guy?

YM will probably pick up some volume. Why not everyone pay a few pennies for cancels and mods and forget the friggin credits.

Yes....I suppose the big guys make the rules...... so we have to play by them.

:mad:

Banjo · May 27, 2005

IB got tagged as a broker sending messages (orders)

http://www.cme.com/trading/get/sup/messagingpolicy12089.html

If your broker doesn't get tagged it won't affect you.

JohnL111 · May 27, 2005

Quote from JohnL111:

CME Globex Messaging Policy Surcharges Effective August 1, 2005
In order to allow a thorough analysis of the trading activity during the June roll, the CME Messaging Policy surcharge phase has been rescheduled to take effect August 1, 2005.

The CME Globex Messaging Policy is a two-step evaluation which measures the activity of each Class A firm for message quality via the "Trade Ratio" and the amount of liquidity via the "Volume Ratio".

The policy took effect on April 18, 2005, without surcharges; surcharges will be implemented beginning August 1, 2005. Please refer to www.cme.com/messagingpolicy for complete details on the CME Globex Messaging Policy and product benchmarks.

So the CME will not start charging brokerage firms until August, but Interactive Brokers will charge their customers anyway. I guess they think their customers are sheep willing to be sheered.

version77 · May 27, 2005

Quote from JohnL111:

So the CME will not start charging brokerage firms until August, but Interactive Brokers will charge their customers anyway. I guess they think their customers are sheep willing to be sheered.

IB must be hurting if they are going to start charging 2 months ahead of this BS move...

And I wonder if having a trailing stop is considered a cancel/modify?...

Everytime it moves up/down a tick?...

Crap, I move my stops/targets all over the frickin place...

Tighten Stops, Widen Targets, ect... I also cancel a lot...

But luckily I do not believe I cancel more than 5 times per trade.

bigbob · May 27, 2005

Quote from futrader22:

Sounds that way to me. Also, seems like a simple way to game IB's fees, at least if you trade more than 1 lots normally. Just break up your order into a few pieces when ever you need more credits.

Looking at how I trade: in with 1 order, maybe 2 or 3 pairs of targets and stop loss orders entered, then out with 2 or 3 orders, I'll be credited with between $13 and $17 towards cancels/mods (depending on how Globex treats OCA orders) for each trade I do. I don't mod my orders anywhere near 13-17 times per trade. I don't think this will be a big deal.

Bob

chapabranca · May 27, 2005

Def, can you explain this better?

If i put a order and cancel and after i put another other that get filled and in this trade i move my stop two times and my target two times before the trade is closed. What IB will charge me in the end of the day? The credits are per trade or per day?

Please, we need some explanation.

Thanks,

Chapa!

alanm · May 27, 2005

IB: 3 points:

The current CME document (at http://www.cme.com/trading/get/sup/messagingpolicy12089.html) says "Surcharges ... will begin effective Friday, July 1, 2005".

The fees are only supposed to apply for RTH activity. Messages outside RTH are not included in the calculations.

Aren't the fees a little excessive, at least for ES? For example, if IB does 50K contracts a day in ES (a conservative estimate, I think), and were to incur the $2000/day penalty, it amounts to just $0.04/contract. What am I missing?