ISE options exchange proposes new, punitive rules for active traders

W

wilburbear

http://www.iseoptions.com/legal/proposed_rule_changes.asp

Just received an e-mail with the link listed above. See May 1 Cancellation Fees, and May 5 Professional Account Holders.

Basically, the ISE will tighten its cancel fee. They will also remove a public traders' position at the front of the order book, if the trader is active in options trading. (Good luck buying an Intel option with 5000 professional lots ahead of you - if you do get it, you don't want it).

Apparently, these rules can spread quickly from exchange to exchange. The only way to stop them is to comment to the SEC. Both rules contain the instructions on how to submit electronic comments to the SEC. (I've written a comment to the SEC, and seen many more. Try to write intelligently - one comment on an unrelated issue actually said a proposed rule "sucked". That will be ineffective).

Comment if you can, and tell others to do so as well. If you find a way to trade that is profitable, the exchanges will simply try to change the rule book to confiscate your profits.
 
Thanks for the heads up...how will they KNOW the trader is an active options trader? and do you have a link to the SEC complaint department?
 
Quote from wilburbear:

http://www.iseoptions.com/legal/proposed_rule_changes.asp

Just received an e-mail with the link listed above. See May 1 Cancellation Fees, and May 5 Professional Account Holders.

Basically, the ISE will tighten its cancel fee. They will also remove a public traders' position at the front of the order book, if the trader is active in options trading. (Good luck buying an Intel option with 5000 professional lots ahead of you - if you do get it, you don't want it).

Apparently, these rules can spread quickly from exchange to exchange. The only way to stop them is to comment to the SEC. Both rules contain the instructions on how to submit electronic comments to the SEC. (I've written a comment to the SEC, and seen many more. Try to write intelligently - one comment on an unrelated issue actually said a proposed rule "sucked". That will be ineffective).

Comment if you can, and tell others to do so as well. If you find a way to trade that is profitable, the exchanges will simply try to change the rule book to confiscate your profits.
More...

The document describes a "professional account holder" as some entity (individual trader or otherwise) that places 100 options orders for 2 or more days in a row. While this seems to be a clear grab for bette order position by the broker / dealers (most of whom are at least EAM for ISE), and for more fees. This rule would also apply to most hedge funds, as hedge funds are generally not registered as broker / dealers, and would frequently place more than 100 option orders. In my opinion, this proposed change would group hedge funds and active traders in the same category.
 
Haha, a conspiracy! I think they're starting to hate it when traders are acting like MMs and taking away their B/A spread profits.
 
Quote from Aardvark:

Thanks for the heads up...how will they KNOW the trader is an active options trader? and do you have a link to the SEC complaint department?
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The method for commenting to the SEC is contained within each rule change - toward the end of each post.
 
so when ib charges .75 cents a contract ise only charges 12 to 21 cents to execute so they're making googd money still.also ib already charges cancellation charges
 
Quote from rufus_4000:

The document describes a "professional account holder" as some entity (individual trader or otherwise) that places 100 options orders for 2 or more days in a row. While this seems to be a clear grab for bette order position by the broker / dealers (most of whom are at least EAM for ISE), and for more fees. This rule would also apply to most hedge funds, as hedge funds are generally not registered as broker / dealers, and would frequently place more than 100 option orders. In my opinion, this proposed change would group hedge funds and active traders in the same category.
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100 options orders on one stock or combined volume total 100 ?
 
Quote from joeyata1:

so when ib charges .75 cents a contract ise only charges 12 to 21 cents to execute so they're making googd money still.also ib already charges cancellation charges
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In today's financial markets, where a cancel is just an electronic "blip" going down a line, there should be no such thing as a cancel charge.
 
dude, the cancel charges are there for two reasons.

They don't like 1000 orders entered and 1 or no fills.

They don't want you moving your bid / ask when the stock moves, they want to pick you off.

They did the same thing to soes traders, when they created a cancel charge.
 
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