new option cancel fees for IB
- Thread starter Free Thinker
- Start date
I've never had a margin call when holding a call or put. And I've never been whacked by some astronomical and unpredictable amount when long options over night.
I'm sure you know this too, but for some reason you care not to mention them. Why?
I'm sure you know this too, but for some reason you care not to mention them. Why?
Quote from qdz3:
Now the day that I told you comes. IB lovers, jump boat now like I already do. It turned out your efforts to fill their tactical needs and to pay them commissions are not enough for the greed of special interest group. Stop now or you lose all of it.
My next prediction is that if some sort of investigation turns out a little fruitful, $1 the commissions will be your oldest sweatiest dream.
so, what are you suggesting?
leave IB, and go to ?
protest IB, and go to?
go to?
Because I have discussed to exhaustion the extreme illogic of the Daytrading Margin rules being applied to the Non-margined long options, for one thing.
With SSF, although you're allowed 5:1 margin, you do not have to use full leverage. If you trade unleveraged, or with smaller leverage (such as 2:1, which would be maximum for smaller accounts trading stocks as well as maximum for overnight on a larger account), you're very unlikely to get a margin call.
In short, with SSF, you're very unlikely to get whacked overnight, but with options' Time Decay you get whacked each and every night, even if it's only a small whack. You get so used to getting whacked, that you eventually forget that you are getting whacked. But like hitting your head on the wall, it feels so good when it stops!
Yeah, Time Decay whacks you every day. That's why options trading is Whacked!
Also, if you're trading the E-minis on Globex, these fears about being whacked by some events overnight are pretty much made moot by the fact that you can trade the E-minis round the clock. You can bail in time, if you feel you need to. SSF are a good way to work up to E-mini trading.
Most options are not really a day trading instruments anyway b/c of the bid/ask spread and commissions.
SSF's are not traded around the clock. The ES is not an SSF, so why mention it? And have you looked at the b/a spread and liqidity in the overnight? They suck. And do you really expect someone to look at the market around the clock, or put in some round-the-clock GTC stop order for "protection" that might get filled in an illiquid over night market that bears little resemblence to reality? Plese be serious. SSF's are great and are only gaining in popularity, but you're totally ingnoring the fact that options give you STRICTLY defined limited risk. Being long a futures contract (be it on MSFT, the S&P or pork bellies) can't do that. PERIOD.
If you simply must continue trading options, and if you can't adapt your style to eliminate order cancellations/modifications to be less than 50%, then you'll need to change to another options broker where the exchanges' cancellation fees are already incorporated into the commission, so they won't charge you individually for each cancel or modify you create.
If you're successful and happy trading options, then by all means continue to trade them.
If you see options as not a daytrading instrument, then PDT shouldn't be a concern. Similarly, I feel that if you view options in this manner, order-cancellation fees shouldn't be much of a concern either, should they? I mean, just place your order, get your execution, and stop worrying about it. If you are not daytrading options, surely you aren't using some trading program to place your orders (hey, you aren't supposed to be able to have "solely electronically-generated orders" on options anyhow). So why is the order cancel fee such an issue to people?
I apologize that I continued to edit my reply after re-reading your message and the original note of mine you were replying to, which I wrote nearly two weeks ago, and I saw that E-minis had not been part of the original note. Still, as I wrote, the SSF are a good step up towards the E-minis.
And while the bid/ask spread overnight on stocks is horrendous, it is not so with E-minis round the clock.
While we generally agree, swing traders don't like to get screwed on price either. If an option is selling for a lower price on another exchange I should be able to cancel my order and get the better price elsewhere w/o having to pay an extra fee just beacuse my order first routed to a crappy exchange.
But more importantly you state the ES is liquid around the clock. That's just not true. Have you looked at the ES in the middle of the night? I have and it's very illiquid. For example, between 4:00 and 4:01am today there were THREE ES trades. 3 trades a minute is not liquid. Not by a long shot.
(And correct me if I'm wrong, but there is no overnight market for stocks, unless you're talking about stocks like DiamlerChrysler that trade around the world. There is a premarket and aftermarket for US equities, but these are only for a few hours and don't extend into the overnight, correct?)
If you see a better price on another exchange, you can switch your order, the execution at the better price will re-imburse the fee from the cancel/modify. It's only when people make more cancels than executions that it becomes a problem.
3 trades a minute isn't a huge volume, but the question is how many contracts were actually available at the best bid/ask.
3 trades a minute is plenty for me, I'm trading only one contract at a time.
3 trades a minute isn't a huge volume, but the question is how many contracts were actually available at the best bid/ask.
3 trades a minute is plenty for me, I'm trading only one contract at a time.