This evening I received the following message from IB: "The Chicago Mercantile Exchange (CME) will be introducing new cancellation fees and, as of June 1, 2005, IB will be charging $1 for each CME cancellation with a credit of $5 for each CME executed trade. Execution credits are applied against cancel or modify fees for the day. Execution credits cannot be greater than cancel/modify fees." First of all, I have a few questions for the IB employees who answer IB related questions at EliteTrader: 1. When will the CME introduce their new cancellation fees? 2. How much are the actual CME cancellation fees? 3. Will IB charge a cancellation fee for stop orders (on Globex futures contracts) that are managed by IB's servers, as opposed to the native stop limit orders that are held on Globex? 4. What is the reasoning or justification behind CME's cancellation fees? 5. How did IB arrive at it's credit / fee program? My take on the effect of CME's cancellation fees are that it will reduce the number of limit orders placed on Globex, and hence reduce liquidity. It will also reduce the stop limit orders held on Globex, which should reduce volatility a little bit. Overall, as the cost of trading at Globex has gone up, a reduction in trade volume should be expected. Traders may also now find eCBOT's YM futures contract relatively more interesting now, as there currently are no cancellation fees on the eCBOT. Comments IB? Anyone else?