IB's option cancellation fee

I thought I was the only one who went from 6 figures to 3 because of zero money management, ie no OCA for option spreads. Tried Build 923 as well, and it didn't work.
 
After experimenting a bit with IB TWS for options trading, I can tell you right away it's not good if you're looking to trade something more complex than the occasional vertical spread. IB might work fine for options if you got your own API though.
 
Quote from magmiv:

what a major disappointment, tried Build 9230t Beta and it doesn't work. Customer service staff also confirmed this. I read the release notes for 923 , http://individuals.interactivebrokers.com/en/p.php?f=tws&ib_entity=llc#notes1 and it isn't available.
Can you explain? So when is OCA for option combos going to be available? or are we suppose to stick behind the computer every minute of every trading hour / become gamblers with little money management, as was the case with me, hence my portfolio margin feasible account going down to 3 figures
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Quote from nixodian:

I thought I was the only one who went from 6 figures to 3 because of zero money management, ie no OCA for option spreads. Tried Build 923 as well, and it didn't work.
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There was a bug in TWS 923 which caused the smart combos with OCA group to be rejected; this issue is now fixed: thank you for pointing it out.
 

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Quote from kostia00:

There was a bug in TWS 923 which caused the smart combos with OCA group to be rejected; this issue is now fixed: thank you for pointing it out.
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yes, it seems to work now, but is there a way of executing 2 or more OCA orders all in one go from option trader?
 
it is not good trading to have a OCA order for option combos / spreads without taking into account quantity. so if have a quantity of 13 bear call spreads, and have two orders linked by OCA, order A to buy back 10 and order B to buy back all 13, at different prices , if order A is executed a quantity of 10 are filled, by 1 full fill or partial fills, 3 of order B should still remain active not just cancelled, as 3 are left exposed. I thought this feature was possible with the Trader workstation configuration, Presets, options as under OCA GROUP heading it says "if one order in group is partially filled, other orders should be: " "reduced in size" is what I have ticked. this should also apply to complete fills, if it is a fraction of the quantity of the other order. here order A (10)is a fraction of size of order B (13)

please program it to enhance our money management
 
My contention is that if you're so unsure about the trade that you have to squeeze out the last few cents- don't trade it.

Yeah I've been hit with cancellation fees but they're tiny- especially if the profits are nice.

I love IB and it's platform. Takes a bit of getting used to and their risk analytics could definitely undergo improvement.

But other than that no complaints here.

Even with cancellation fees-IB comes out WAY ahead of others in terms of commission.

My total trades today 34 (closing some positions, opening new ones..)

total commission with some cancellation fees thrown in ~ $24

Exact same scenario in ThinkOrSwim, for example, would have set me back- $70 ish...
 
Quote from TskTsk:

After experimenting a bit with IB TWS for options trading, I can tell you right away it's not good if you're looking to trade something more complex than the occasional vertical spread. IB might work fine for options if you got your own API though.
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Hmm... I actually find it quite good. I trade flies as well and verticals (mostly) and I find it easy to use. Order entry is a breeze and cancellation and updates are quite brilliantly simple.

Perhaps it's just me.

I'll admit I use the paper trade version of ThinkOrSwim to see the risk graph quite frequently since IB's sucks...
 
Quote from def:

Timber Hill is a market maker and and under the same parent of IBG. This fact is not hidden on our site, corporate filings, etc. Market makers are not charged cancel fees and the TH market making is independent of the IB brokerage (this is also well documented in the corporate filings and on our site). Someone who claims to have so much knowledge of the options industry would surely know this which certainly makes one wonder what your motivation is for bringing this up. Nevertheless, when you make false or misleading statements - especially on a thread discussing IB - I'm certainly not going to let it slide.

Now if you want to talk Prime Brokerage, let's compare apples to apples and discuss all fees. Exercise/assignments, wires, shares, custodian fees, interest (earned and credit), execution credits, credit worthiness of the custodian including any off balance sheet items, etc. While you're at it, you should talk about execution statistics including price improvement, payment for order flow and so on. feel free to do that another thread.

So if you don't think making inaccurate claims or statements about a competitor isn't attacking the competition, I've got a bridge I'd like to sell you.

Finally, you think way too highly of yourself to believe I'm following you around. I'm not the one popping up on the IB threads breaking up discussions to tout their firm.
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RMORSE,

I normally don't chime in on this type of thread, but I've gotta back up DEF in this debate. You are blatantly misrepresenting things and/or taking things that are a positive of being with IB and trying to turn them into a negative.

IB does not have a prop trading desk. They do have a sister company market maker, but you should know that it isn't close to the same thing. And their financial position is much stronger than almost all other brokers, so it can't really be suggested that TH is somehow a negative for IB clients.

I personally won't use a broker that doesn't have some sort of auto-liquidation policy. I only utilize about 5-10% available margin and I'm never in danger of triggering auto-liquidation for myself or my clients. If some rogue client of my broker were to get into trouble, the typical margin call policy of many brokers is not sufficient to protect my accounts. I don't want my broker to allow that trader to carry excessive losses. The broker should force liquidation to ensure safety for responsible clients.

It is not at all unreasonable for IB to pass on cancellation fees from the exchange. For the service quality, they absolutely have the lowest rates around. And the price improvement thing is huge. IB is the only broker that I've used (out of 5) that repeatedly gets me improved pricing on limit orders and passes it on to my clients. That price improvement accounts for probably around 5% greater returns each year.

So as a sponsor you are free to promote your firm, but you aren't free to bash other firms while doing so. And you also need to be transparent regarding your own fees. I've yet to speak with an introducing broker with commissions even close to those at IB. Obviously, intro brokers are another layer in the commission structure, and your company has to make money. So to overcharge on standard rates and then try to sell it by criticizing competitors for cancellation fees, and then not mention rebates that offset most of those fees, is not exactly 100% honest.
 
Quote from babutime:

Hmm... I actually find it quite good. I trade flies as well and verticals (mostly) and I find it easy to use. Order entry is a breeze and cancellation and updates are quite brilliantly simple.

Perhaps it's just me.

I'll admit I use the paper trade version of ThinkOrSwim to see the risk graph quite frequently since IB's sucks...
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I guess it depends what you use it for. I used the Risk Navigator a lot to look at future scenarios, and always thought the numbers it gave me were weird. There have been cases in which Risk Navigator miscalculated my portfolio greeks. This can be dangerous. Not to mention the functionality is pretty limited. And the risk graphs ... my god, I can feel my eyes burning from just thinking about it. You call that a graph??

Order entry is another thing. If I'm entering 7-8 positions at once, I don't have time to babysit each order making sure it's always where I want it. Why can't I automatically track the midpoint? I'm aware I could use "combo entry", but that only allows 4 legs max, another limitation.

One of the worst things though, is the speed. God damn the charts are slow to navigate. Try using charts in a platform like NinjaTrader then try using the TWS ones, and you'll know what I mean. The whole thing just feels so slow and clumsy.

I don't know, maybe I have too high demands. Anyways none of this matters now, as I started using Excel connected to TWS. Tracking midpoints arent a problem anymore. No more unwanted directional exposure while waiting for a position to fill; just send an order for an underlying hedge if price crosses customized barriers. And you can't beat Excel at graphs. It's absolutely beautiful. For data analysis as well. The best thing would probably be C# or C++ but I'm not quite ready for that yet.
 
Quote from Epic:

RMORSE,

I normally don't chime in on this type of thread, but I've gotta back up DEF in this debate. You are blatantly misrepresenting things and/or taking things that are a positive of being with IB and trying to turn them into a negative.

IB does not have a prop trading desk. They do have a sister company market maker, but you should know that it isn't close to the same thing. And their financial position is much stronger than almost all other brokers, so it can't really be suggested that TH is somehow a negative for IB clients.

I personally won't use a broker that doesn't have some sort of auto-liquidation policy. I only utilize about 5-10% available margin and I'm never in danger of triggering auto-liquidation for myself or my clients. If some rogue client of my broker were to get into trouble, the typical margin call policy of many brokers is not sufficient to protect my accounts. I don't want my broker to allow that trader to carry excessive losses. The broker should force liquidation to ensure safety for responsible clients.

It is not at all unreasonable for IB to pass on cancellation fees from the exchange. For the service quality, they absolutely have the lowest rates around. And the price improvement thing is huge. IB is the only broker that I've used (out of 5) that repeatedly gets me improved pricing on limit orders and passes it on to my clients. That price improvement accounts for probably around 5% greater returns each year.

So as a sponsor you are free to promote your firm, but you aren't free to bash other firms while doing so. And you also need to be transparent regarding your own fees. I've yet to speak with an introducing broker with commissions even close to those at IB. Obviously, intro brokers are another layer in the commission structure, and your company has to make money. So to overcharge on standard rates and then try to sell it by criticizing competitors for cancellation fees, and then not mention rebates that offset most of those fees, is not exactly 100% honest.
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I'd be happy to discuss this with you privately. To be clear. I have no issue with IB. We are Introducing Brokers to IB. I've never "bashed" them and have incredible respect for the person that started the firm, and he was an AMEX member like myself around the same time.

I have my own opinion about the firm that I'm entitled to based on my knowledge and interaction with both IB and Timberhill, which by the way used to lease one of my Amex memberships. My opinion is that although IB is a great place for many traders, it was created to provide order flow to Timberhill at better rates that it could go out and buy in the street. If clients benefit from that, that great. Other trading operations have done the same thing.

No one firm is best for everyone. When a traders says in a forum, "I'm looking for an alternative", I'm interested in finding out if there is a good fit for us. Not everyone is right for us either.
 
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