Hii--- I think you must have received a different memo than I did. Def: Obviously IB needs to provide some concise clarification with examples. Thanks.
I apologize to all that I took so long to change this thread's title. I was away for the weekend. If anyone sees specific posts that offend them, please click "kill" on them. There is no basis to kill qdz's posts other than personal attacks, but he's taken some personal attacks as well so it would be biased. I'm pretty sure everyone knows how to take his posts by now.
I cannot believe that a title such as "IB this sucks" upset IB'ers that much. ET is pretty much like a communist controlled media. If I were the starter of this thread, I would be mad now. Of course the original title was not very specific. how about "IB this sucks: option order cancellation fees"
If your degree of madness depends on who started the thread you must not be a very good trader. Am I right?
No, Lobster, you are wrong. This is not the place to demostrate your consistency. Yes, Vhehn, I agree with you. But it would be better if the title preserves the original feelings.
on the fees... my early indications are that they do apply to modifications (as the exchanges may treat the orders as cancel/replace as opposed to modify). if you use SMART and it moves you from one exchange to another, there are no fees I'm not sure how up to speed I'm going to be able to stay on this matter as I'll be a focused on trading and other matters this week. The best place to start a discussion on the fees would be under the trading thread on the IB web site. I'll make sure that one or two people at the management level who understand the issue will be aware of potential posts.
Thanks Def. I'll see that it gets addressed over there. We appreciate your time and efforts here...helpful as always.
I received the same memo as everyone else. I just think I may have grasped its message a bit better than most of you seem to have. Did anyone else notice that in the memo they have written the word REDUCED in capital letters? Then notice that the fee is 20¢ per contract, capped at $1.20. Now at the very worst, they would charge you 20¢ per contract, and then only reimburse you a maximum of $1.20 per execution. But that wouldn't make sense. They would have to know that all you'd have to do is break your executions down to 6 contract order maximums. And if that does turn out to be the case, then my advice to you is: break your execution orders down to 6 contract maximums. Since it was a brief paragraph, I make the presumption that it is announcing a modification, and not a major change to the cancellation fee situation. And as it is now, modifications are charged the $1.20 fee as well as cancellations, and executions only reimburse cancellation fees from the same day. What they seem to have done is begin applying a cancellation fee to the SMART orders, which you were all getting a deal on before when they allowed you to route through SMART without order cancellation fees. Now, they seem to be planning to charge cancellation fees for SMART routing, as a means to reduce the cancellation fees for orders of 1-5 contracts. Anyone trading options at 1-5 contracts per order should be pleased. People trading 6 or more contracts at a time should see no change. The only people who are seeing an increase are those people using SMART routing. Well, everyone was complaining when these fees first came out that they thought IB was pullling a scam to "force" us to use SMART by charging $1.20 fees for Direct Routing. They took the attitude that SMART was some kind of scam, rather than seeing that they were getting a bargain from IB. Now IB is going to start charging for the use of that bargain. And you're going to all start complaining how unfair it is for them to charge fees for SMART. For the most part, people are getting a good deal with IB. People are so naturally suspicious, that they refuse to recognize when they are being given a bargain, until it is taken away from them.
I think there are two issues here. One is the fee itself and the other is IB's response. As for IB, the concern is one that has arisen before. IB sometimes communicates in ways that are not particularly clear. It would only have taken a couple more lines to explain this important change clearly but for some reason, it was written in a way that raised more questions than it answered. The yearly questions about whether or not commish is netted out of IB's IRS statements is another good example. Maybe IB needs an editor. As for the fee itself, it is clear that the options exchanges are desperately trying to hang onto the privileges of exchange membership. Chief among these has been the ability to screw retail customers. Their view is if you want to try to buy at the bid, you should get a membership. Otherwise bend over and grab your ankles like everyone has always done. I can see why the dying floor-based exchanges would go for this, but it is a mystery to me why ISE would. No doubt the MM's have arguments along the line that they provide liquidity, and it's not fair for a creamskimmer to come in and improve the bid/offer and force them to constantly be adjusting. I suppose this problem will work itself out as new entities like BOX come on line and try different models. Or traders can just go where they are treated better.