How feasible would this be? Please PM me if you would not like to post it here.
new option cancel fees for IB
- Thread starter Free Thinker
- Start date
How feasible would this be? Please PM me if you would not like to post it here.
CBOE has the following individuals named in their regulatory circulars pertaining to the various rules, and amendments:
Christopher Hill, Legal Division, 312-786-7031.
Anthony Montesano, 312, 786-7365
Tom Knorring, 312-786-7363
Don Patton 312-786-7026
These individuals may only be available for member firms and their representatives to contact. But I will call them this week and ask if they are willing to discuss this amicably. Maybe they will not be concerned enough to do so. But with the public's perception of wall street and related institutions and this bear market, maybe they will be more amenable. But of course they do have the typically biased SEC on their side; an institution that seems to do little for the investor/trader without a major act of God; but much more for their cronies and former employers on the institutional side of the Street.
Other ETs might also decide to place a phone call or send a letter to the Office of the Chairman (CBOE), their Financial Planning Committee and/or their legal department.
Might as well start at the exchange level before seeking out a Chicago securities firm/attorney as counsel in this matter, or lobbying the SEC etc.
First you have a PDT rule that is absurd (although it has not affected me much but is still an impediment); then the PDT rule is applied to options! And the SEC continues to allow this rank discrimination to go on and on. Hard to have any respect for those guys (as if they have scruples to care what the off- floor trading "public" thinks anyway!)
What's interesting is the options exchanges apparently put up no fuss about the PDT rule application to options. In some regards one might think it would have some effect on volume albeit small perhaps. Apparently not enough in this bear to make a difference for them.
We might think that IF someone is willing to take the risk of significant loss in trading stocks and more so with options they ought to be allowed to do so without further impediment from the exchanges that are there to make markets for all (in theory).
Come on BOX... now's your chance.
Ice
b.t.w. at one time CBOE was actually charging member firms for "partial fills', thereby considering the balance of such orders "cancellations" under the definition in the Rule. Apparently that was changed in January and member firms were allowed to seek refunds.
Christopher Hill, Legal Division, 312-786-7031.
Anthony Montesano, 312, 786-7365
Tom Knorring, 312-786-7363
Don Patton 312-786-7026
These individuals may only be available for member firms and their representatives to contact. But I will call them this week and ask if they are willing to discuss this amicably. Maybe they will not be concerned enough to do so. But with the public's perception of wall street and related institutions and this bear market, maybe they will be more amenable. But of course they do have the typically biased SEC on their side; an institution that seems to do little for the investor/trader without a major act of God; but much more for their cronies and former employers on the institutional side of the Street.
Other ETs might also decide to place a phone call or send a letter to the Office of the Chairman (CBOE), their Financial Planning Committee and/or their legal department.
Might as well start at the exchange level before seeking out a Chicago securities firm/attorney as counsel in this matter, or lobbying the SEC etc.
First you have a PDT rule that is absurd (although it has not affected me much but is still an impediment); then the PDT rule is applied to options! And the SEC continues to allow this rank discrimination to go on and on. Hard to have any respect for those guys (as if they have scruples to care what the off- floor trading "public" thinks anyway!)
What's interesting is the options exchanges apparently put up no fuss about the PDT rule application to options. In some regards one might think it would have some effect on volume albeit small perhaps. Apparently not enough in this bear to make a difference for them.
We might think that IF someone is willing to take the risk of significant loss in trading stocks and more so with options they ought to be allowed to do so without further impediment from the exchanges that are there to make markets for all (in theory).
Come on BOX... now's your chance.
Ice
b.t.w. at one time CBOE was actually charging member firms for "partial fills', thereby considering the balance of such orders "cancellations" under the definition in the Rule. Apparently that was changed in January and member firms were allowed to seek refunds.
I warch the options quotes and frankly I don't see this happening. Hopw does it hurt me as a customer? It doesn't. the only people whoi care about "too many" bids and offers are MM's. Their mindset is they paid for a seat and by golly they want to get their money's worth. If the exchanges truly feel some few are abusing them, then the obvious answer is to come up with a remedy that focuses on the wrongdoers, not the joe trader who ocassionally tries to get a bid. The fact that they instead come up with a scatter gun approach shows that their explanation is total bs. Luckily, we have other markets and don't have to tolerate this abuse.
All US exchanges now charge option order cancellation fees. In order to recapture this expense, effective April 14, 2003, IB will charge $1.20/cancelled option ORDER (not per contract) for smart and direct routed option orders.
Option order cancellation fees will then be REDUCED at the following rates:
Direct Orders $.20/executed contract capped at $1.20/executed trade
Smart Orders $.25/executed contract capped at $3.75/executed trade
A modified order (e.g you change the price and/or the quantity) is also counted as a cancel order.
A day order that expires at the end of the day without being executed will not incur a cancel fee.
The number of executions and cancellations is reset to zero at the end of each day. Option credits are not rolled over to the next day. Thus, if on Monday you place one order to buy 10 option contracts and are executed, and then on Tuesday you place another order to buy 10 contracts but then cancel it, then you will be charged $1.20.
Direct Order Example
If you place an order to buy 1 option contract via Direct-routing and you modify it once, this will incur a fee of $1.20. If the order executes, then we will reduce the $1.20 fee by $0.20. So, the total fee would be $1.00.
Now, if you place an order to buy 10 option contracts via Direct-routing and you modify it twice, this will incur a fee of $2.40 (2x$1.20). If the order executes, then we will reduce the $2.40 fee by the maximum $1.20, not $2.00 (10x$0.20). So, the fee would be $1.20.
Smart Order Example
If you place an order to buy 4 option contracts via Smart-routing and you modify it once, this will incur a fee of $1.20. If the order executes, then we will reduce the $1.20 fee by $1.00. So, the total fee would be $0.20.
Now, if you place an order to buy 10 option contracts via Smart-routing and you modify it twice, this will incur a fee of $2.40 (2x $1.20). If the order executes, then we will reduce the $2.40 fee by $2.50 (10x$0.25). So, there would be no fee.
Hope this explains everything.
Option order cancellation fees will then be REDUCED at the following rates:
Direct Orders $.20/executed contract capped at $1.20/executed trade
Smart Orders $.25/executed contract capped at $3.75/executed trade
A modified order (e.g you change the price and/or the quantity) is also counted as a cancel order.
A day order that expires at the end of the day without being executed will not incur a cancel fee.
The number of executions and cancellations is reset to zero at the end of each day. Option credits are not rolled over to the next day. Thus, if on Monday you place one order to buy 10 option contracts and are executed, and then on Tuesday you place another order to buy 10 contracts but then cancel it, then you will be charged $1.20.
Direct Order Example
If you place an order to buy 1 option contract via Direct-routing and you modify it once, this will incur a fee of $1.20. If the order executes, then we will reduce the $1.20 fee by $0.20. So, the total fee would be $1.00.
Now, if you place an order to buy 10 option contracts via Direct-routing and you modify it twice, this will incur a fee of $2.40 (2x$1.20). If the order executes, then we will reduce the $2.40 fee by the maximum $1.20, not $2.00 (10x$0.20). So, the fee would be $1.20.
Smart Order Example
If you place an order to buy 4 option contracts via Smart-routing and you modify it once, this will incur a fee of $1.20. If the order executes, then we will reduce the $1.20 fee by $1.00. So, the total fee would be $0.20.
Now, if you place an order to buy 10 option contracts via Smart-routing and you modify it twice, this will incur a fee of $2.40 (2x $1.20). If the order executes, then we will reduce the $2.40 fee by $2.50 (10x$0.25). So, there would be no fee.
Hope this explains everything.
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Quote from mskl:
It is pretty cheap to set up a B/D and you can even trade as a remote M/M. (The PSE and BOX will have remote market making).
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Sorry i'm foreign, what is a B/D ?
Quote from mskl:
It is pretty cheap to set up a B/D and you can even trade as a remote M/M. (The PSE and BOX will have remote market making).
--------------------------------------------------------------------------------
Sorry i'm foreign, what is a B/D ?
Broker/Dealer
I understood most of the original cryptic memo. If they had used the word reimbursed or offset instead of REDUCED, I would have grasped that too.
I'd like to respond to everyone.
Right, now I can't.
but to those responding to my messages.
Please read carefully,
I know the rules of my exchange.
Never did I say customers were making markets.
Customer has a specific meaning in options.
Customers do not get market maker margin.
It's my belief that without market maker margin,
no one could possibly make money as a market maker.
In other words if customers were allowed to make markets
they would get killed. They would need huge amounts
of capital, and the cost of maintaining the position would
be far more than the profit from the bid/ask spread.
the PSE, BOX. I can't wait for them to get here.
Please open your B/D and start making markets.
We can trade together, it'll be fun.
Who knows I could be on the BOX too.
I wish everyone good luck making markets,
but I believe most of you will lose money.
It's just my opinion, I could be wrong.
Right, now I can't.
but to those responding to my messages.
Please read carefully,
I know the rules of my exchange.
Never did I say customers were making markets.
Customer has a specific meaning in options.
Customers do not get market maker margin.
It's my belief that without market maker margin,
no one could possibly make money as a market maker.
In other words if customers were allowed to make markets
they would get killed. They would need huge amounts
of capital, and the cost of maintaining the position would
be far more than the profit from the bid/ask spread.
the PSE, BOX. I can't wait for them to get here.
Please open your B/D and start making markets.
We can trade together, it'll be fun.
Who knows I could be on the BOX too.
I wish everyone good luck making markets,
but I believe most of you will lose money.
It's just my opinion, I could be wrong.