Going over the 390 is a non starter for me. I've done it once and spent 3 months dealing with it. Bottom line is the fees are a minor issue - its your fills or fill rate that is affected. The real reason for this rule imo is quite simply to identify the "better" retail traders (assuming there is a correlation of success to orders/volume). Quite possibly a bad assumption. Once identified - the orders are treated differently. Almost like they go down a different pipe. These HFT/MM's act like a casino. Identify traders/gamblers - and then don't trade/take bets against who you think is sophisticated. In fact I see examples every day of traders who are either professional customers or away market makers and generally speaking their orders are ignored by the hft's/mm. i.e - an option with a $5 bid $6 ask. They place a BUY order at $5.70 and don't get a fill and cancel. I immediately place an order to BUY at $5.60 (regular customer) and get an instant fill (with no change to the underlying). Some of these longer dated options have a $5+ spread. If you want to trade them as a regular customer AND want to get a decent fill - then you could easily cancel replace your order 20 times before you get a fill. 20 orders like that per day and you are magically over this limit and you could have only traded a few hundred contracts. But hey MR CBOE - if you don't want that business - I will trade foreign equity options, SSF's, futures, futures options and equities instead. No limits on any of these products (in terms of fees). In fact my fees/per generally go down the more I trade them.......lol Message to the CBOE: Its 2020. Time to update this rule or eliminate it
How are they able to tell who placed the order? Can TWS provide that sort of data? Is there any way to stay anonymous?
Sorry for the confusion. I can only say this based on experience. I can't cite you the rule that allows hft's the ability to discern who is who - but it has to be happening.
When you enter an order it is "tagged" by who you are, customer, pro customer, etc. When I was tagged as pro customer a while ago it was awful. I paid much more in fees the next quarter and many of my orders were not filled. I shared an office with another trader and he would put an order in a better price and be filled, while they would have no interest in my order at a far worse price. MM's are far more willing to interact with a customer order. What's also interesting is if you see a wide quote and better it as a customer you will generally be joined by many different MM's. Once you cancel the order, they know its just other market makers and the quote will return to the way it was.