What is going on with IB?

Catoosa · May 8, 2003

Quote from stock777:

If any of you are really serious about cancel fees, STOP TRADING OPTIONS.

If the volume drops enough , they'll get the message.

Maybe that message is what the market makers are looking for.
I do not know but suspect the cancelation fees may be the result of pressure from the market makers on the option exchanges, and then the option exchanges putting pressure on the SEC. I get the felling it starts with the market makers reaction to day traders. Am I way off base?

nitro · May 8, 2003

Quote from axeman:

Huh? So if I hit a button with my mouse, no cancel fee?

But if I programatically send a cancel through TWS, I get charged?

Okaaaaaaaaaay.... guess ill just have the computer pop
open a dialog box that tells me to cancel the order.
This is a joke right?

peace

axeman

There is a very good reason why they would want to do that. Talk to meetooxx if you want the REAL story, or do a search on google under "option bandits."

nitro

iceman1 · May 8, 2003

Quote from minimi:

Okay, here I talked about the fee against IB simply for the statement clarity, nothing more. We all know cancel fee is criminal crap imposed by someone perhaps other than IB.

I want for now is two numbers, number of cancel, and credit on my statement. Further detail log of cancel should be available either in statement or in TWS when IB has the capability/resource to do it. Period.

I agree with you in that regard.. should be a reasonably detailed log to avoid inadvertent errors. I have been keeping track of my modify/cancels. Do the same.

I

garbo · May 8, 2003

Seems like some people are missing the main point of the cancel fees, which is to PROTECT market makers from Joe Trader who knows how to program.

Think about it: You're a market maker on, say, XAU options: You've got September 85 puts at 15.60 bid, 16.60 ask. Of course, there are not a lot of suckers playing your game with a spread like that. But it only takes a couple to put dinner on the table.

Now comes Joe Trader using IB's API to program option orders. He decides to undercut you and is ready to do 15.70 bid, 16.50 ask. Of course the price is constantly shifting, so the only way for him to compete is to automate (read IB API) his orders.

Now you say f**k him: Why should you have to compete? You've got a good sucker game going here (options). How do you cut him out? CANCEL FEEs, of course. If he loses nickels every time he changes his order, no way can he compete.

Naturally, the SEC is happy to go along with such crap to prevent any possible fair competition from Joe Trader (just as they were happy to sign off on the $1.4 billion slap on the wrist of Wall Street -- please stop me from ranting...)

iceman1 · May 8, 2003

Quote from garbo:

Seems like some people are missing the main point of the cancel fees, which is to PROTECT market makers from Joe Trader who knows how to program.

Think about it: You're a market maker on, say, XAU options: You've got September 85 puts at 15.60 bid, 16.60 ask. Of course, there are not a lot of suckers playing your game with a spread like that. But it only takes a couple to put dinner on the table.

Now comes Joe Trader using IB's API to program option orders. He decides to undercut you and is ready to do 15.70 bid, 16.50 ask. Of course the price is constantly shifting, so the only way for him to compete is to automate (read IB API) his orders.

Now you say f**k him: Why should you have to compete? You've got a good sucker game going here (options). How do you cut him out? CANCEL FEEs, of course. If he loses nickels every time he changes his order, no way can he compete.

Naturally, the SEC is happy to go along with such crap to prevent any possible fair competition from Joe Trader (just as they were happy to sign off on the $1.4 billion slap on the wrist of Wall Street -- please stop me from ranting...)

No keep ranting about the shameful, pitiful, corrupt SEC. They're an example of why I get all bent out of shape whenever I hear the patriotic crap like occurred during the attack on Iraq. This country is not moral such as we can cast the first stones... ever! Just a notch above. These cancel fees are a glaring example of that inequality, and lack of ethics.

All persons have equal access to the markets within certain reasonable rules and provisions. Nope. Not anymore with options markets. NOW you gotta buy or rent a seat to participate in the options markets on a level playing field! If a MM changes the bid... no problemo. But if I do the same, bzzzzzz. .... $ONE USD, please!

The SEC and the greedy CBOE ought to be ashamed of themselves. But then does any governmental or financial body have much shame (much less integrity)... anymore, in the good old USA?! Did they ever?!

Please stop me from ranting!

Ice

axeman · May 8, 2003

My question remains.
Is IB imposing these fee's to keep programmatic traders
from competing with THEM, or are they passing through
a fee to us? ( This applies to stocks, not just options )

peace

axeman

garbo · May 8, 2003

For options: I believe that IB is passing along costs imposed by options exchanges. Only a guess...

For stock API orders: I think (maybe) IB wants to protect itself.

Another thought: Imagine someone wanted to disrupt IB's (or some other broker's) order system. Computer generation/cancellation of masses of orders might achieve that. So maybe these cancel fees are intended to prevent such behavior.

But I still think the option market sucks a huge c...

garbo · May 8, 2003

Since this is an-anti IB thread, I'm going to move to a new thread. Seems like we're discussing a free options marketplace, not problems with IB...

axeman · May 8, 2003

IB already has message flow control in place.
You can send a maximim of X messages per second.

So this is not the case. They can prevent any kind
of flood attack through their API's.

I think they are simply preventing their users from
taking advantage of some known trading "edges" and
keeping it all to themselves. What a sham.

peace

axeman

Quote from garbo:

For options: I believe that IB is passing along costs imposed by options exchanges. Only a guess...

For stock API orders: I think (maybe) IB wants to protect itself.

Another thought: Imagine someone wanted to disrupt IB's (or some other broker's) order system. Computer generation/cancellation of masses of orders might achieve that. So maybe these cancel fees are intended to prevent such behavior.

But I still think the option market sucks a huge c...

iceman1 · May 8, 2003

Quote from axeman:

IB already has message flow control in place.
You can send a maximum of X messages per second.

So this is not the case. They can prevent any kind
of flood attack through their API's.

I think they are simply preventing their users from
taking advantage of some known trading "edges" and
keeping it all to themselves. What a sham.

peace

axeman

Believe me... nothing IB could or might do as you allege can really interfere with making money in the options markets. Whether I make a lot or a little or none... is a corollary of my own astuteness and application of good trading skills or the absence thereof. This has been my observation.

If anything IB helps off-floor/screen traders by having many superior features in their system, and fair options commissions.

Bravo IB... frankly, I hope they prosper! There's plenty to go around in the options market. Trust me.

It's just more challenging, at times. :eek:

That said the options markets do need more regulation to even the field. Why should underlyings have vastly different rules than options. If this is ever attacked in court... (cancel fees) it would be enjoined and then thrown out!

Ice