Subject: File No. SR-ISE-2005-31
From: James Rosen

July 6, 2005

This is a comment strongly against SR-ISE-2005-31 which proposes dramatic increases in cancelation fees for the ISE options exchange. It is amazing that customers who enter orders that improve option markets and increase market liquidity will be punished for not getting fills. If a customer entered a 100 lot order and did not get filled the previous charge, itself an impediment to trading, would be 1.00. That same order would now cost 10.00. A tenfold increase against a customer who is trying to work orders for their own account. Additionally, ISE has already had approved a 30 second delay in filling orders. That is, they have 30 seconds to address an order in which time they could move their markets or take the trade themselves. So they have the ability to prevent customers from getting fills which itself triggers the cancellation fees. Moreover, it penalizes partial fills as a 100 lot order filld on 10 contracts and then canceled will cost a customer 9.00 for the canceled portion of the order. This rule along with many others are simply an attack on retail option customers. It is now a profit center for ISE to NOT FILL orders. I am always amazed at the relentless effort to prevent trading, stop fills and charge customers for trying to get fills and yet no effort seems to be made to actually facilitate fills. This will put a lot of customers out of business as they will not be able to bear the burden of cancellation fees. Fees that to my knowledge do not exist in the all electronic world of S&P E-mini trading at the CME or in oil futures or eurodollar trading or any one of a host of electronic trading exchanges. This is simply the latest step in a war against sophisticated options traders who trade as retail customers. It should not be allowed. It is simply designed to put us out of business and takes away liquidity and improved markets from the options world. It takes away customers who make money trading options so that either ISE will make the money trading those options or make money from the cancelations. Either way it is a further corruption of free-market trading. It distorts the market by adding oppressive barriers to trade. And if this rule is apporved, all the other exchanges, CBOE, PHLX, AMEX, PSE and BSE will no doubt change their rules. It is simply the end of free and fair trading for active retail customers who trade equity options. This rule should not be approved.