Is IB playing fair with their customers (new CME Cancellation Fees)?

Discussion in 'Retail Brokers' started by Rem, May 29, 2005.

  1. Rem


    Could somebody from IB answer why IB was announcing this new CME Cancellation Fees only 4 days before introducing ?

    Last 2 months I was intensively working on my CME investing strategy. Now, with this new fee my whole work and time spent is useless.
  2. If your strategy was rendered "useless" by a $1 cancel/modify fee offset by $5 for every execution, your strategy was hopelessly thin. You should probably get down on your hands and knees and thank IB for coming up with this new fee in time to keep you from instituting a poor strategy.

  3. vikana

    vikana Moderator

    My hope is that this will reduce the noise levels a bit. All the tricks posting large bids and offers and pulling them all the time, simply clogs up the network and negatively affects most of us.

    BTW, if you think two months is a lot of time invested, you're in for a surprise :)
  4. FT79


    It's your own responsibility to know these things, that's trading!!! When trading everybody wants your money. It's a zero-sum-game so don't blame IB but yourself. Welcome to the real world :D
  5. ib loves to play with itself too.
  6. j1900q


    The only thing I question is, I have heard this from no other broker.
  7. Is it true that all brokers will not have this fee, only selected "problem" brokers?

    (is flipper looking for a new job?)
  8. Q-Arb-ler


    It can apply to any broker who does volume above the minimum threshold.

    It does seem interesting that IB already seems to know that it will fail and has instituted the fees 2 months before the fees will be charged to them.

    The idea of the test period was to give a heads up to clearing brokers as to whether they would get charged and to perhaps give them a chance to calm their prop operations or calm their high frequency/tuning clients.

    Seems odd that IB knows it will fail and will continue to fail and it seems even odder, that they would institute the charges on the retail side. While I feared when I saw the new Globex messaging policy that CME was going the way of CBOE to protect its seatholders and prevent off floor market making, I did not think IB or other retail shops would take the bait unless they were trying to cross subsidize their prop operations.

    Yes I know nominally the rule is to try to pare back the excessive message rates that tax bandwidth and computer power and perhaps a vane wish that bluffing will be reduced. I doubt it will accomplish either. If you have seen the benchmarks, you know the ES is not really going to see much of a reduction in message rates, as its message rate is currently well below 25:1 basic rule. The currently 1:1 and 10:1 existing rates cannot really be pared back much. Does bluffing really cost any of you money, really? Seems rather obvious that of the 1600 or so times a day the bid/ask shifts on es, very few shifts occur for more than 400 contracts regardless of the size of the bid or ask being hit, and if they will hold to their full size, they invariably withstand the first hit of 400. How hard is that?
  9. Rem


    I do not blame IB for introdusing this fee ( as it is CME fee), but I think it is not fair to inform customers about this new fee only 4 days before.

    In my opinion they should, as professional, inform all castomers abuot such an important change some 2-3 months before.
  10. Q-Arb-ler


    That was part of my point. They are apparently not going to be charged until August 1 (the original July 1 date was apparently pushed back), yet they charge customers June 1 with 3 days notice?
    #10     May 29, 2005