Constructive criticism or protest vs IB's way of cancellation fees.

Discussion in 'Retail Brokers' started by Option Trader, Dec 7, 2008.

  1. In spite of this protest, I still use IB because of its advantages.

    1. IB's cancellation fees from the exchange are offset on a 1 fill versus 1 cancellation basis, even if the order size is 1 option; but we get only partial credit, and often takes an order size of 15 to offset a cancellation fee.

    2. IB charges you for overnight cancellation fees albeit the order does not rest on the exchanges overnight and IB is NOT charged.

    3. IB calculates your cancellation fees on a day to day basis, albeit they are charged by the exchange on a monthly basis--hence 100 fills yesterday does nothing for you today.

    4. IB does not allow 1 smart order to offset another smart order, rather it's broken down according to the exchange; hence, 100 fills that are smart routed by IB to CBOE doesn't help you to reduce even 1 cancellation charge they smart routed to ISE.

    5. IB's GTC orders you placed yesterday are resting on ISE today. The new orders you place to day to buy at ask or sell at bid are usually filled on CBOE.

    6. IB does not allow you to eliminate CBOE from the smart route--which would have enabled your orders to get filled on ISE.

    7. Aside from the fact you get no more credit for 15 small orders over one order for 15 contracts, you also don't get credit for a book order of 200 options either, which seems inconsistant.

    8. OCO hidden orders rest on the IB server, so seemngly each partial fill should be considered a full fill--but it's not.

    9. If you get one leg of an OCO order with even a partial fill, for the other legs you get a cancellation fee--even though the other legs are not resting on the exchange.

    10. Direct routing your orders to a particular exchange cost more money than cancellation fees, hence can't be used to offset them.
  2. If the fees and procedures are not condusive to your trade sytle, techniques, and methods then find another broker that better suits you. Period.

    If no other broker better suits your needs then it is a fixed cost of doing business.

    this post in a nutshell...
    You have placed both feet in a bucket, grabbed the handle with both hands and expect ET to tell you how you can lift yourself off the ground.


  3. coolraz


    I stopped trading options with IB because of all of those reasons. I wanted to develop API but all this restrictiveness made it not worthwile.
    Even discretionary trading, I was routinely charged cancellation fees at the end of the month

    I dunno if this policy which I think is very bad has anything to do with IB being a big options MM through TimberHill (which people have compalined causes other problems too).

    Does anyone else have any other experiences with direct access/discount brokers charging these kinds of fees and rules (like NOT Tradeking/ToS etc where those fees would be more than made up for by their higher comissions most likely)?