January 15, 2010
The options exchanges are attempting to offset the benefits of the penny pilot program. By charging certain customers higher fees for participating in the penny pilot program the exchanges are forcing certain investors to compensate their market makers for the change in quoting rules. The exchanges are trying to force investors and traders to trade on their quoted bid or offer instead of potentially benefiting from a better price provided by the penny pilot pricing system. Why should I be penalized for attempting to buy an option at the best possible price? If the intent of the penny pilot is to provide investors with the best price available in the market then why would the SEC allow the exchanges to have new rules which will manipulate investors to trade on the market makers prices which give them a distinct advantage. The CBOE and ISE are trying to force active options traders and investors to continue the practice of buying and selling options at prices that are unfair to the investor.