Registered: May 2012
09-04-12 02:49 PM
Quote from surfer25:
Just wondering why are there are fees for canceling or modifying options orders, since stocks don't have them.
When electronic option markets opened the pipes up to HFT, many electronic market makers would flood option markets with a large number of orders all going after the few customer orders left on the book that are good, or after a market maker that had stale markets. This extreme volume would often shut down exchanges like the AMEX or PHLX. The exchanges had to build an infrastructure to deal with this. So, any trader that has excessive ratios of canceled orders to fills, get charge for the bandwidth there are using. Most customers don't receive any cancellation fees unless you earn them, except at IB which charges everyone.