IB's option cancellation fee
- Thread starter njrookie
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NYSE AMEX current CANCELLATION Policy:$1.50 per cancelled order with the foot notes below:
12 The Order to Trade Ratio Fee is calculated on a monthly basis. Orders that improve the Exchange's prevailing best bid-offer (BBO) market at the time the orders are received will not be included in the order to execution ratio. For purposes of the Messages to Contracts Traded Ratio Fee, a âmessageâ is defined
as a quote and/or an order. In calculating the Messages to Contracts Traded Ratio Fee, the Exchange will aggregate routing and market making activity in the case of an ATP Firm that has both a routing and a market making arm affiliated with its operation and will apply a 70% common ownership test to determine if such an affiliation exists. The Order to Trade Ratio Fee and the Messages to Contracts Traded Ratio Fee are referred to collectively as the Excessive Bandwidth Utilization Fees. In the event that an ATP Firm is liable for either or both of the Excessive Bandwidth Utilization Fees and/or for charges pursuant to the Cancellation Fee in a given month, that firm would only be charged the largest one of those three fees for the month. The Exchange may exclude one or more days of data for purposes of calculating the Excessive Bandwidth Utilization Fees or Cancellation Fee for an ATP Firm if the Exchange determines, in its sole discretion, that one or more ATP Firms or the Exchange was experiencing a bona fide systems problem.
13 A fee of $1.50 will be assessed to an executing clearing member for each cancelled public customer order (origin code âCâ) in excess of the number of public customer orders that the executing clearing member executes in a month for itself or for a correspondent firm. All public customer options orders from the same executing clearing member for itself or for such correspondent firm executed in the same series on the same side of the market at the same price within a 300 second period will be aggregated and counted as one executed order for purposes of this fee. This fee shall not apply: (i) if an executing clearing member cancels less than 500 public customer orders in a month for itself or for a correspondent firm; and (ii) to cancelled orders that improve the Exchange's prevailing bid-offer (BBO) market at the time the orders are received. This fee does not apply to Professional Customer orders.
12 The Order to Trade Ratio Fee is calculated on a monthly basis. Orders that improve the Exchange's prevailing best bid-offer (BBO) market at the time the orders are received will not be included in the order to execution ratio. For purposes of the Messages to Contracts Traded Ratio Fee, a âmessageâ is defined
as a quote and/or an order. In calculating the Messages to Contracts Traded Ratio Fee, the Exchange will aggregate routing and market making activity in the case of an ATP Firm that has both a routing and a market making arm affiliated with its operation and will apply a 70% common ownership test to determine if such an affiliation exists. The Order to Trade Ratio Fee and the Messages to Contracts Traded Ratio Fee are referred to collectively as the Excessive Bandwidth Utilization Fees. In the event that an ATP Firm is liable for either or both of the Excessive Bandwidth Utilization Fees and/or for charges pursuant to the Cancellation Fee in a given month, that firm would only be charged the largest one of those three fees for the month. The Exchange may exclude one or more days of data for purposes of calculating the Excessive Bandwidth Utilization Fees or Cancellation Fee for an ATP Firm if the Exchange determines, in its sole discretion, that one or more ATP Firms or the Exchange was experiencing a bona fide systems problem.
13 A fee of $1.50 will be assessed to an executing clearing member for each cancelled public customer order (origin code âCâ) in excess of the number of public customer orders that the executing clearing member executes in a month for itself or for a correspondent firm. All public customer options orders from the same executing clearing member for itself or for such correspondent firm executed in the same series on the same side of the market at the same price within a 300 second period will be aggregated and counted as one executed order for purposes of this fee. This fee shall not apply: (i) if an executing clearing member cancels less than 500 public customer orders in a month for itself or for a correspondent firm; and (ii) to cancelled orders that improve the Exchange's prevailing bid-offer (BBO) market at the time the orders are received. This fee does not apply to Professional Customer orders.
Auto-liquidation during a flash crash would further distort prices of illiquid securities, perpetuate a disorderly market, damage the equity of liquidated customers, and irreversibly reduce the firm's net capital.
It does not take 1,000's of employees in order to not auto-liquidate customer positions during a flash crash.
Computers are marvelous tools.
tradingmanuals
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revenue source.
it's hogwash that you would have limits on cancellation. Just change the computer software if cannot handle cancel orders. there is more than enough bandwith and RAM memory at the exhange
QUOTE]Quote from njrookie:
Why it seems IB is the only firm charging it? I want to place limit order, but also want to be able to cancel the order when underlying moves against me.
Any other low cost option broker to recommend? I probably will do over 100 contracts a day.
njrookie [/QUOTE]
it's hogwash that you would have limits on cancellation. Just change the computer software if cannot handle cancel orders. there is more than enough bandwith and RAM memory at the exhange
QUOTE]Quote from njrookie:
Why it seems IB is the only firm charging it? I want to place limit order, but also want to be able to cancel the order when underlying moves against me.
Any other low cost option broker to recommend? I probably will do over 100 contracts a day.
njrookie [/QUOTE]
Things have changed and in today's fully-electronic, HFT environment where trades occur in milliseconds, bust/adjust and auto-liquidation rules must be pre-programmed. Today brokers no longer have the luxury of calling clients to ask for a check that may never be forthcoming.
When NYSE goes back to full manual trading with Wednesdays off to catch up on the paperwork we can revisit.