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CBOE implemented order cancellation fees to drive out off-exchange traders
who were competing too fiercely for business by narrowing spreads. At the time,
I complained to the SEC which took no action on this blatant move to reduce
outside competition.
The CME appears to have learned by the absence of any pushback:
The Chicago Mercantile Exchange (CME)
will be introducing new
cancellation fees and, as of June 1, 2005, IB will
be charging $1 for each
CME cancellation with a credit of $5 for each CME
executed trade. Execution
credits are applied against cancel or modify fees
for the day. Execution
credits cannot be greater than cancel/modify
fees.
I guess we will have to think twice
before entering a limit order which might not be hit or adjusting our stops too
frequently.
Earl
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