I was noticed to be fined with $2000. I was told by brokers IB to get fine $2000 this morning. I violated CME Globex messaging volume rate. I traded ZB (30-t), not trade too frequently, did not create volume, and created too manay messages, inn this message i was told I trade a product with special labelling, that is it, did not tell me if too many this message I will be fined. very rediculous! the CME group site said they surcharged the brokers this fine. not brokers' client. any one came across this kind of things, and can I fight with my IB broker ? since IB did not tell me there are those fines, they are clear-firm of CME, they should know those rules, while I was none-professinal (not licensed). I was totally pissed. help and any suggestions
You should have recieved a warning first: Why am I receiving notifications concerning the number of messages being sent to the CMEâs Globex trading platform? Based upon the premise that the Globex platform is negatively affected when customers send excessive messages (e.g., orders, modifies and cancels) that do not provide market value, the CME imposes monetary penalties upon clearing members submitting orders on behalf of its clients in excess of benchmark volume ratios for a given product. IB, in turn, maintains the right to pass these charges on to clients and will send a warning message when a violation appears imminent. Clients who receive this notice and continue to send excessive messages may be subject to surcharge fee of $2,000 each time a product benchmark is violated. Additional information regarding the CME Globex messaging policy can be found on the CME Group web site. Links: CME GLOBEX Messaging Policy .
but I did not receive any warning. I do not know why. I traded ZB before, I did cancel, put order, manay times, but did not receive any message, just the special labelling message. is it becasue of ZB expiration (I bought ZB March last week friday, and sold it this monday)? really thanks your explaniantion
CME Globex Messaging Policy: http://www.cmegroup.com/globex/resources/cme-globex-messaging-policy.html
http://www.cmegroup.com/globex/files/CMEMessagingPolicy.pdf On point 4 of the policy document. it states exception: Class A firms submitting less than 20,000 messages per trading session in a given product are excluded. On point 5. reporting, it states that the reports can be segregated by account... so you should be able to get more details from IB on what your message volume represented... On point 6 it states that CME will provide 2 notices within a 30 day period of time... In order for the penalty to apply you need to break the threshold 3 times in 30 days (you only get penalty after 2 notices) Whether you're liable to pay this fine will depend very much in the wording of your contract with IB (read the latin words written on very small letters).
Was the fine to IB caused by the one individual's excessive cancel/ change orders or was the fine caused because of an aggregate of traders ?
Actually, it really doesn't. Since his trading platform generates a unique and specific trader ID which is tagged in the ECN to the CME directly for each of his messages and fills, this is really on him and not IB. I would agree that IB should have warned him as a professional courtesy, but the CME collects the fine from his IB account directly as part of IB's Membership Agreement. Every time you change a price in your automation, it issues seperate cancel and replace messages. My advice would be to keep your automation OFF until your specific price level has been reached.
Trader198 - Please post whatever message IB sent you, I've never heard of an actual fine being levied without a warning. Trading the expiring ZB month shouldn't be an issue since message ratios are pooled across the entire curve.
This is true, but it's also unfair to penalize individual traders with the entire $2,000 fine when it is levied based on collective action at a FCM. Say on a given day 3000 different clients of IB generate 9 ZB messages each, no fills, each one individually is compliant with 10:1 but the firm isn't. One additional client executes 1 side, generates 11 messages. Do we stick him with the entire $2,000 fine?
Since I have had trading exchanges call me directly about my automation and messaging in the past ( the ICE desk in Atlanta in particular ), and since each and every one of his messages are tagged with his individual trader ID, I am not sure that the "collective action" arguement would hold much water. I agree that this is shitty, but in his posts it sounds like he had some forethought or previous knowledge that there was a possible compliance issue. IB customer service sucks, no doubt. Again, turn off the automation when the market is trading away from your actionable price level.