Obscene options cancel/modify fees

Discussion in 'Options' started by stock777, Mar 31, 2007.

  1. How much are these costing you active options traders.

    1.20 ? wtf is that?
  2. zero but its built into my commission structure. .95 per contract no ticket charge. Mininum of 20 contracts both sides of a spread. I do cancel and modify at least 3 X as filled contracts so its worth it.
  3. atozcom


    I use TOS. There is no cancelation fee.

    There is no order modification fee because you must cancel the order and sent a new order.
  4. They do it to make sure nobody can try to make a market except market makers.

    Think about it.

    On a lot of options, the spreads are $1 wide or more. If there was no cancel/modify fee, someone else could easily try to make a market in those options.
  5. ajna


    Simple answer:
    The exchanges charge cancel fees for options, so IB passes them through to the customer.
    TOS charges a bit more in commissions, so no extra fees charged.
  6. neke


    There is no charge at Ameritrade. It is silly. If they want the option market to be liquid, people should be encouraged to participate, and not ripped off by market markers. It is insane seeing spreads of as much as 50% (bid $0.50, ask $1.00). which means if you buy and immediately realise it is a mistake, you are instantly down 50%. That sucks.
  7. The SEC approved these charges to raise money for the exchanges against the public.

    In the new penny options, the market-makers automatically go a penny ahead of your bid or offer, if your order is placed at a good price between the bid-ask spread. So, you either do your transaction at the bid or ask, and ring the register for the market-makers, or cancel after you've place an order between the bid/ask, thereby incurring the cancel fee, and ring the register for the market-makers.

    The SEC allows them to do this because a portion of your income taxes goes to them (the SEC) to support their activities, and your trades generate SEC fees which further allows them to enable the exchanges against you.
  8. yeah neke, there's no charge at ameritrade to cancel/modify, but good luck trying to make a market when you pay $9.99 + .75 / contract in commissions.

    Again, the system is designed to help the market makers profit, which screws over traders.

    They don't want a liquid options market, because if the spreads are only 1 cent like they are for stocks, there's no money to be made. What they say their agenda is and what the truth is are 2 seperate things :)
  9. Of course, they're not going to do anything about it.

    Because if there were no cancel fees, anyone can make a market in options, making the specialists worthless.

    I'm surprised you got any response.
  10. i'm not understanding. th ise charges each broker $1.50 per cancelled order? but doesn't a broker get credits for all orders placed per day to offset this fee? ib passes this fee on and has the lowest rates out there. somebodys better off negotiating a $1 to $1.25 per contract rate with another firm if you do alot of cancels. those cancels add up if you're doing a lot of them
    #10     Apr 1, 2007