ISE options exchange proposes punitive cancel charges for active traders

[wilburbear]

http://www.iseoptions.com/legal/pdf/proposed_rule_changes/SR-ISE-2005-31$Fee_Changes$20050629.pdf

Read it and weep. Your exchange could be next. Fees for canceling orders. And this on an all-electronic exchange, where a cancel is just an electronic "blip" running down an electronic pipe. In my opinion, you should steer orders away from the ISE.

If there's enough responses to this, I'll hunt down the SEC page for comments on impending rules and post it here.

 

[wilburbear]

Here's the link again if you had trouble with the first one.

http://www.iseoptions.com/legal/pdf/proposed_rule_changes/SR-ISE-2005-31$Fee_Changes$20050629.pdf

If it still fails, go to ISE website and select the regulatory tab at the top of the page. Then select proposed rule changes. This rule is the last one on the proposed rule change page.

 

[Cdntrader]

Quote from wilburbear:

Here's the link again if you had trouble with the first one.

http://www.iseoptions.com/legal/pdf/proposed_rule_changes/SR-ISE-2005-31$Fee_Changes$20050629.pdf

If it still fails, go to ISE website and select the regulatory tab at the top of the page. Then select proposed rule changes. This rule is the last one on the proposed rule change page.

link doesnt work.


interesting rule change. Seems it will just target the high volume players with greater than 5:1 cancel volume vs order volume.

 

[wilburbear]

Quote from Cdntrader:

link doesnt work.


interesting rule change. Seems it will just target the high volume players with greater than 5:1 cancel volume vs order volume.

Yes, the rule primarily applies to active traders. Presumably, most ET participants are active traders.

Beware of your favorite exchange using a cancel fee to raise revenue when things get slow. The average *hedge fund* is down on the year. This seems the wrong time to increase transaction costs.

 

[GATrader]

this 5:1 ratio is not unreasonable even for active traders. Yes, it is a pisser that a fee which costs them nothing to implement since it is electronic should cost traders something. I guess they don't want non registered traders from attempting to be pseudo mkt makers. I wonder how the other exchanges will respond.

 

[AAAintheBeltway]

The options exchanges remind me of morons I used to deal with in business who would rather have 100% of nothing than a fair percentage of a big number. They will be satisfied when all outside traders have said the heck with them. Who needs this BS?

 

[wilburbear]

http://www.sec.gov/cgi-bin/ruling-c...0531&file_num=SR-ISE-2005-31&action=Show_Form

Here's the link for comments to the SEC on ISE cancel charges.

Even if you trade something else you may wish to comment to prevent further dubious ideas to raise revenue for exchanges and specialist firms.

 

[theTaoTrader]

Quote from GATrader:

this 5:1 ratio is not unreasonable even for active traders. Yes, it is a pisser that a fee which costs them nothing to implement since it is electronic should cost traders something. I guess they don't want non registered traders from attempting to be pseudo mkt makers. I wonder how the other exchanges will respond.

That's the reason. "they don't want non registered traders from attempting to be pseudo mkt makers." It does cost ISE in terms of increased network traffic, which is huge for an option trading platform.

 

[wilburbear]

Quote from theTaoTrader:

That's the reason. "they don't want non registered traders from attempting to be pseudo mkt makers." It does cost ISE in terms of increased network traffic, which is huge for an option trading platform.

Has the ISE experienced constraints in its network traffic? I haven't seen any. Thanks.

 

[vulture]

Quote from AAAintheBeltway:

The options exchanges remind me of morons I used to deal with in business who would rather have 100% of nothing than a fair percentage of a big number. They will be satisfied when all outside traders have said the heck with them. Who needs this BS?

I completely agree. They want to maintain this exclusivity and reduce the competition, yet it also kills liquidity and like you say, people just say who needs it and walk.