IB's option cancellation fee
- Thread starter njrookie
- Start date
Ha. A broker, doctor and lawyer are walking their dogs in a park. The lawyer says, "guy's watch this. Scruffy do a trick." Scruffy starts barking the magna carta. The doctor says, "That's nothing. Spot, do a trick." Spot goes into the woods and start to pull out branches and proceeds to make a replica of a human skeleton." The broker laughs and says to his dog, "go do a trick." His dog immediately goes and fuks the other two dogs in the ass and then says, "let's do lunch."
Many people complain about IB auto liquidation. For me, if IB gets rid of autoliquidation, I will run awy from IB in a second. I have been autoliquidated many times but that has saved my ass big time. If you are against autoliquidation, just fund your account beforehand or trade smaller.
I also have a trick to avoid cancellation fee. Let's say I have an order to buy an option for 0.2. Then it moves higher and goes to 0.3. I want to change my order to 0.3. I don't cancell my first order. I put a new order and when it goes through, I cancel the first one. In case I don't have enough fund for two orders, IB cancels the first order without charging cancellation fee.
I also have a trick to avoid cancellation fee. Let's say I have an order to buy an option for 0.2. Then it moves higher and goes to 0.3. I want to change my order to 0.3. I don't cancell my first order. I put a new order and when it goes through, I cancel the first one. In case I don't have enough fund for two orders, IB cancels the first order without charging cancellation fee.
Thats smart on so many levels.
The cancel/modify fees on most of the exchanges are pretty exorbitant, but I've noticed for a lot of things, BATS is the same as the SMART prices, so if you direct route to BATS (in the case where multiple exchanges have the same price or use SMART if you are sure BATS is the best) and provide liquidity you get the rebate ($0.30) and your cancel/modify is a much more reasonable $0.10. This gets you back to the often quoted $0.70/contract with the flexibility of modifying once or twice without paying through the nose (and still beating the TOS commission).
If you're canceling/modifying every 5 seconds, then IB may not be the place for you as even with execution credits those will start to add up.
However if it's just a matter of canceling other orders after your executions, even with the fee, it's probably still going to beat the TOS commissions (I'm currently at $1.25/contract).
Also, IB doesn't charge an assignment fee, whereas TOS has a $15 fee per strike.
In any case, it's highly dependent on your style of trading, so what works best for A may not be right for B.
If you're canceling/modifying every 5 seconds, then IB may not be the place for you as even with execution credits those will start to add up.
However if it's just a matter of canceling other orders after your executions, even with the fee, it's probably still going to beat the TOS commissions (I'm currently at $1.25/contract).
Also, IB doesn't charge an assignment fee, whereas TOS has a $15 fee per strike.
In any case, it's highly dependent on your style of trading, so what works best for A may not be right for B.
Ben111, one of the essential money management features for option traders, that every serious broker should have is 'one cancel other' in IB it is called OCA. 'One cancel all' they do have this feature but only for single legs. Which does tell you what kind of options trader IB wants to cater for. Beginners / inexperienced option 'traders'. Gamblers really, who feel trading spreads / combos is complex and risky, when in fact they make positions significantly less risky.
It can be used if you are long or short option combos. It maximizes your profit and minimizes your loss potential. I saved some nickels in commission when with IB, but lost 100s and 1000s of notes, mainly because they don't have this feature for combos. Since moving to Think or Swim, over 12months ago, the opposite has happened, I lost nickels in commission but gained 100s and 1000s of notes
so don't let IB's âcheapâ commissions deceive you, cause you will end up not seeing the very green forest for the trees. The op on http://www.elitetrader.com/vb/showthread.php?s=&threadid=228173 conveys IB's lack of care for anyone but the inexperienced option gambler.Spindr0,
I was short an otm call combo, a bear call spread, and thought market would go down, the next day, so had the buy back at lower price set up, but the market went up big time, which meant, I ended up well itm. This was a serious loss. So in another time, I was short a call combo again, and had buy backs at lower (profit taking)and higher price set up(stop). I wasn't at my computer and ended up going long at the higher price, since the initial buy back occurred at the lower price, with the market moving down, then market moved up and ended up buying again at the higher price. Made a loss here as market then retreated. IB don't see the need to have OCA for combos, which would of prevented this happening
Another time I was long a put combo, a bear put spread, I had already set up a sell at higher price (profit taking) and a sell at a lower price (stop). In my absence the market moved down and I initially sold at the higher price, nice profit taking, but as the market moved up I sold again, at the lower price meaning, I ended up short the spread, now a bull put spread. Well unlucky for me the market moved down big time, and the spread ended up well itm again, at another big loss. None of these misfortunes would happen if IB had OCA working for combos, that they do for the inexperienced / newbie single leg users.
Since moving to Think or Swim, those sucker unsophisticated things don't or can't happen. Relative to IB , l maybe losing nickels in commission, but earning a satisfying return in notes
In terms of gross or net return, IB is in negative territoryI read your posts on the thread http://www.elitetrader.com/vb/showthread.php?s=&threadid=228173&perpage=6&pagenumber=3
the op definitely put you in your place. Alison krauss's song must appeal to you,for more reasons than one, 'you say it best when you say nothing at all'
Sound like you are the kind who cant see the very green forest for the trees. You saving nickels at the expense of notes coming in.