IB stops and trailing stops are not globex native stop limit orders. They will not be subject to this fee
Its 2K per product per day, as there about 20 products, it could potentially be millions of dollars a year.
It seems the CME/GLOBEX is reconsidering some aspects of their new proposal to charge for orders/cancellations. Based on our communications with GLOBEX, it seems likely that they will postpone the implementation of the new fee scheme until at least August 1. Accordingly, as IB considers the imposition of cancellation fees as essentially a pass through of exchange charges, we will postpone charging for excessive order submission/cancellation for GLOBEX orders until the GLOBEX finalizes the details of their plan.
Businessman Do you have a link from IB that confirms this info.. re: trailing stops not being native to globex? ... and... what about a scenario where a person has 3 targets in place (lmt orders) and the stoploss order is hit and filled... do the 3 targets result in 3 cancelled orders or one (or none) which would be charged the cancellation fee? Thanks
AH! Found it myself. Here is the link for those interested. http://www.interactivebrokers.com/cgi-pub/exchange_display_web.pl?einfo=usCME2&file=GLOBEX.html
It seems no one is looking at the bright side of this. For traders who keep changing their orders again and again with small # of executions, they will be penalized. And that is the norm for pit trading, those who keep adjusting their orders every few minutes will tend to get their orders ignored and sometimes, the firms will simply ask the customer to take their business elsewhere. So, that is not much a problem - the small traders just have to deal with it, like any other issues in trading. Now, take a look at the bigger players who hide themselves behind customized bots that place 500 small orders to fulfill the objective of, in reality, 1 single order. It is going to cost these players and they will have to rethink their strategies of hidng orders through their bots. That way, you will see "real size" of the trades. Based on what we've seen in past 6 months of tick data, it is obvious a lot of the bigger size trades no longer show up in the eminis like ES, NQ, etc. when real-time extremes are hit. If these trades started to show up again, CME's new rule will actually help every one trading these instruments ... except those being exposed
Good point Lawrence, however, the big guys who slice up their orders into time units or price units generally are not the traders who cancel since they want the fills. The ones who cancel/modify are the ones who are arbing 1 instrument against another, and spoofing. Would'nt this rule make the markets less liquid and probably make the mkt's chop more violently than otherwise?
The puzzling question is whether those bot driven orders are also there to "confuse" the mkt depth readers, similar to those phantom bid/ask orders in level 2 during the late 1990s.
FWIW - Just got off the phone with IB and was told that mngmt is reconsidering this and might even bag it. They may have an email as early as tomorrow with new info.