what are you rambling on about ? I can easily imagine market making strategies in options getting only a fill at ratio above 10:1, nothing horribly designed about that.
The exchanges instituted cancel fees because traders were supposedly canceling too frequently and hogging precious bandwidth. A few months later we got penny denominated pricing in options which causes an exponential increase in bandwidth requirements in those options now denominated in pennies. No systems were unable to handle the increase in traffic. Calling all lawyers - we were duped with false reasoning into swallowing a simple revenue-raiser for the option exchanges. The position of the option exchanges in this matter? We will soon see depth-of-book data in options which will take up more bandwidth. Your cancel fees will remain in place.
the only reason cancellation fees were installed was to prevent off-floor pseudo market making. I used to do this. It was a small margin business and I made a nice profit almost every day consistently, but it was impossible after cancellation fees so I quit doing that.
In '99 and '00 quite a few employees of CBOE firms left and started making markets on their own (some at home, some in arcades). The cancellation fees were implemented solely for the purpose to prevent this. The options exchanges are the old boys mafia's last resort now and I try to avoid trading US options whenever possible.
When i saw the $1+ cancellation fees, the first thing that popped into my mind was that it was a scheme to keep the spreads wide -- to kill anybody who tries to make a market on their own.
I was talking about the NYSE... Which has a specific regulation that kicks in at 10:1... And is enforced on a discretionary basis... Against idiots that abuse the system. But never mind... You have nothing to worry about in terms of your "imaginary strategies".
ok.. 1) RTFM 2) You're whining about $2.40? Seriously? In my book when I make it all day and only have to pay $2.40 to the cheating, lying, bastards that run the options exchanges it's a good day. 3) Yes the order cancellation fee is a rip off. But it's not IB it's the exchanges... and it's been around for a good amount of time now.