Ameritrade screwed me?
September 24, 2008 8:16 PM Subscribe
Shorting ban, Options trade filter: I bought put options on Washington Mutual back in July. I held the contracts until right before expiration intending to exercise...
Of course, Bush "illegalized" shorting financials the day before options expiration. But wait a minute. I paid for the option of shorting Washington Mutual months before.
Twenty minutes before the close on Friday 8/19 I entered an order to exercise my options.
13 minutes after the close of trading I received confirmation that my 10 contracts are exercised. I am now short 1000 shares short Washihgton Mutual.
(Luckily) I have screenshots of being short 1000 shares of Washington Mutual 2 houurs later.
By the next morning my position has been erased. Luckily, I have screenshots of the above activity, in fact, I have not shut my computer off and I have proof in the form of my positions still being displayed right now.
Meanwhile, Ameritrade has responded to my emails stating that my exercise was in process and rejected due to Bush's new rules on what you can short.
What are my options?
Thanks in advance,
Raf
Of course, Bush "illegalized" shorting financials the day before options expiration. But wait a minute. I paid for the option of shorting Washington Mutual months before.
Twenty minutes before the close on Friday 8/19 I entered an order to exercise my options.
13 minutes after the close of trading I received confirmation that my 10 contracts are exercised. I am now short 1000 shares short Washihgton Mutual.
(Luckily) I have screenshots of being short 1000 shares of Washington Mutual 2 houurs later.
By the next morning my position has been erased. Luckily, I have screenshots of the above activity, in fact, I have not shut my computer off and I have proof in the form of my positions still being displayed right now.
Meanwhile, Ameritrade has responded to my emails stating that my exercise was in process and rejected due to Bush's new rules on what you can short.
What are my options?
Thanks in advance,
Raf
Ameritrade is wrong. gjc is 100% spot on correct. Options purchased prior to the ban are grandfathered. They still need to get a borrow by Thursday. They have t+3 to settle and a day after that to either borrow the stock or buy it in.
posted by JohnnyGunn at 8:39 PM on September 24, 2008
posted by JohnnyGunn at 8:39 PM on September 24, 2008
nice trade. Not really answering your question, but why would you want to actually get short the stock and not just sell the put? If nothing else, your broker should make you whole on the intrinsic value of the put (as if you liquidated the position instead of getting stock).
I work in this business and I can tell you from the inside that noone has any clue what the SEC rules are supposed to mean. There is substantial grey area in pure-stock stuff, but its practically impossible to determine what is okay and what is not in option space. For example, assuming you have a non-vanilla position it appears that the SEC is saying you can do anything you want in option-space as long as you are long delta. This is completely batshitinsane.
posted by H. Roark at 8:46 PM on September 24, 2008
I work in this business and I can tell you from the inside that noone has any clue what the SEC rules are supposed to mean. There is substantial grey area in pure-stock stuff, but its practically impossible to determine what is okay and what is not in option space. For example, assuming you have a non-vanilla position it appears that the SEC is saying you can do anything you want in option-space as long as you are long delta. This is completely batshitinsane.
posted by H. Roark at 8:46 PM on September 24, 2008
Response by poster: From Ameritrade, today:
The exercise request that you made on your 10 +WMUH was reversed in the account. The underlying security closed at $4.25 and your 4 dollar put was out of the money. The SEC had also issued a new rule banning short sales on WM and other companies. Since you did not hold shares of WM in the account, the exercise would have created a short and required an immediate buy in on Monday. This may have resulted in potential losses to the account. Based on the above, TD AMERITRADE determined it was in the best interest of the account to cancel the request and allow the position to expire. If you have further concerns, please reply to this message and hopefully we will be able to address those at that time.
Thank you,
Nick D.
Options Desk, TD AMERITRADE
Division of TD AMERITRADE, Inc.
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Please read Characteristics and Risks of Standardized Options at http://www.theocc.com/publications/risks/riskstoc.pdf before investing in options.
My reply:
"Based on the above, TD AMERITRADE determined it was in the best interest of the account to cancel the request and allow the position to expire."
No. You do not get to make my trading decisions for me unless I have not answered a margin call. That order was filled and the position was in my account at 4:15PM, at 5:15PM, and at 6:15PM. WM was under 4 dollars before the close, after the close and every single second since except 4:00PM. I demand a written account and timeline of all unauthorized actions you took in my account. I have absolute proof that the position existed in my account at 6:15PM. What kind of asshole are you that you think you can sell this to me as if it was in my best interest? Get ready to read about this on the internet, Nick. What no last names? I guess I wouldn't give mine either if I was a man like you. Notice how the story has changed twice already:
First you (Actually Scott no-last-name, is he your brother?) said that my order was in process and didn't get filled. I provided proof that it was filled. Now you say it was in the best interest of the account to terminate my position sometime after 6:15PM, when it was a profitable postion in after hours trading? Check the time and date stamp in the upper left of the attached image, Fri Sep 19 2008 6:13:03PM EDT. If you were acting in my best interests why didn't you cover the postion in After Hours trading for at least some profit? Answer: My best interests have ABSOLUTELY NOTHING to do with your actions. Lucky for me I left the page open in my browser. I still have it open. You can stop by my office and take a look at it if you like. Care to dig the hole a little deeper with another lie? See what you can come up with.
But thanks again for providing an on the record admission that you took unauthorized actions in my account. Please provide the exact timeline of these actions.
Thanks in advance for your timely reply,
posted by Rafaelloello at 10:38 AM on September 25, 2008
The exercise request that you made on your 10 +WMUH was reversed in the account. The underlying security closed at $4.25 and your 4 dollar put was out of the money. The SEC had also issued a new rule banning short sales on WM and other companies. Since you did not hold shares of WM in the account, the exercise would have created a short and required an immediate buy in on Monday. This may have resulted in potential losses to the account. Based on the above, TD AMERITRADE determined it was in the best interest of the account to cancel the request and allow the position to expire. If you have further concerns, please reply to this message and hopefully we will be able to address those at that time.
Thank you,
Nick D.
Options Desk, TD AMERITRADE
Division of TD AMERITRADE, Inc.
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Please read Characteristics and Risks of Standardized Options at http://www.theocc.com/publications/risks/riskstoc.pdf before investing in options.
My reply:
"Based on the above, TD AMERITRADE determined it was in the best interest of the account to cancel the request and allow the position to expire."
No. You do not get to make my trading decisions for me unless I have not answered a margin call. That order was filled and the position was in my account at 4:15PM, at 5:15PM, and at 6:15PM. WM was under 4 dollars before the close, after the close and every single second since except 4:00PM. I demand a written account and timeline of all unauthorized actions you took in my account. I have absolute proof that the position existed in my account at 6:15PM. What kind of asshole are you that you think you can sell this to me as if it was in my best interest? Get ready to read about this on the internet, Nick. What no last names? I guess I wouldn't give mine either if I was a man like you. Notice how the story has changed twice already:
First you (Actually Scott no-last-name, is he your brother?) said that my order was in process and didn't get filled. I provided proof that it was filled. Now you say it was in the best interest of the account to terminate my position sometime after 6:15PM, when it was a profitable postion in after hours trading? Check the time and date stamp in the upper left of the attached image, Fri Sep 19 2008 6:13:03PM EDT. If you were acting in my best interests why didn't you cover the postion in After Hours trading for at least some profit? Answer: My best interests have ABSOLUTELY NOTHING to do with your actions. Lucky for me I left the page open in my browser. I still have it open. You can stop by my office and take a look at it if you like. Care to dig the hole a little deeper with another lie? See what you can come up with.
But thanks again for providing an on the record admission that you took unauthorized actions in my account. Please provide the exact timeline of these actions.
Thanks in advance for your timely reply,
posted by Rafaelloello at 10:38 AM on September 25, 2008
What kind of asshole are you that you think you can sell this to me as if it was in my best interest? Get ready to read about this on the internet, Nick. What no last names? I guess I wouldn't give mine either if I was a man like you.
Rafaelloello, I appreciate that you're upset, but go read the Consumerist for a while. Best rule of getting what you want is to be calm and polite.
Being a jerk isn't going to help your position. At all.
posted by anastasiav at 11:21 AM on September 25, 2008 [2 favorites]
Rafaelloello, I appreciate that you're upset, but go read the Consumerist for a while. Best rule of getting what you want is to be calm and polite.
Being a jerk isn't going to help your position. At all.
posted by anastasiav at 11:21 AM on September 25, 2008 [2 favorites]
Wow, that's really awful. Sorry I don't have any advice (except maybe to start googling "securities arbitration attorney"), but I would be interested to hear what the outcome is, if you wouldn't mind continuing to update this thread.
posted by blue mustard at 1:19 PM on September 25, 2008
posted by blue mustard at 1:19 PM on September 25, 2008
Response by poster: BTW, my wife and I have 5 Ameritrade accounts, but this is my low commission izone account ($5 trades), one of the ways they keep the cost down is you have no contact with them except email.
Next Chapter:
There were no unauthorized trades placed in this account. TD AMERITRADE has every right to refuse to process an exercise request if it will result in a position that the account is unable to hold. In this case, the request to exercise your WMUH was originally processed so you would have temporarily been displaying shares short of WM in the account. However, we re-reviewed all exercise requests on securities that were ineligible for shorting due to the SEC ruling. Your exercise request was re-reviewed at 5:25 CDT. At that time WM was trading 4.05x4.06 in the extended session. If we did a buy in on the short position generated by the exercise you would have bought the shares at 4.06. This would have resulted in a loss to the account. Since the request was no longer economical due to current market conditions and the account was unable to hold the security short due to the SEC ruling, the exercise request was cancelled by TD AMERITRADE. If you have further concerns, please feel free to reply to this message.
Thank you,
Nick D.
Options Desk, TD AMERITRADE
Division of TD AMERITRADE, Inc.
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Please read Characteristics and Risks of Standardized Options at http://www.theocc.com/publications/risks/riskstoc.pdf before investing in options.
My reply:
Underlying shares were reserved for my short postion on 7/25 when I purchased those contracts:
Transaction ID: 4074566871
Order Number: 4089171207
Underlying: 939322103
Strike: 4.00
Put/Call: Put
Expiration: 09/20/2008
Session: Regular Market Hours
Date Entered: 07/25/2008
Time Entered: 11:28:48
Commission: 12.50
I do not think you fully understand the SEC ruling. I paid for the right to be short those shares and I am entitled to hold those shares short right now and I request you put that position in my account where it belongs. That order was filled, it shows as filled, the position was in my account and you evaporated it without my consent. Can you explain to me how a trade I entered was executed and was in my account and you decided to not only remove the position, but it was done with no notice whatsoever being served to me? Before or after? I'm sure any jury can be taught to read a 5 day chart of WM and see the criminal activity you are engaged in. It's not a terribly large position, $4,000 short. We'll see what your bosses think of your actions when they have to send their lawyers to court in Boston (maybe small claims, I'll check with my lawyer to find out what venue will be the most expensive for you to defend in). My filled order is Order No. 4250996948 Entered:15:42:17 09/19/08, Exercise to close, Filled Order No. 4250996944 Sell 1000 Shares WM Short.
I need the precise time and any trader and tracking details of your unauthorized reversal of my entered order.
Thanks in advance, Nick no-last-name
posted by Rafaelloello at 1:56 PM on September 25, 2008
Next Chapter:
There were no unauthorized trades placed in this account. TD AMERITRADE has every right to refuse to process an exercise request if it will result in a position that the account is unable to hold. In this case, the request to exercise your WMUH was originally processed so you would have temporarily been displaying shares short of WM in the account. However, we re-reviewed all exercise requests on securities that were ineligible for shorting due to the SEC ruling. Your exercise request was re-reviewed at 5:25 CDT. At that time WM was trading 4.05x4.06 in the extended session. If we did a buy in on the short position generated by the exercise you would have bought the shares at 4.06. This would have resulted in a loss to the account. Since the request was no longer economical due to current market conditions and the account was unable to hold the security short due to the SEC ruling, the exercise request was cancelled by TD AMERITRADE. If you have further concerns, please feel free to reply to this message.
Thank you,
Nick D.
Options Desk, TD AMERITRADE
Division of TD AMERITRADE, Inc.
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Please read Characteristics and Risks of Standardized Options at http://www.theocc.com/publications/risks/riskstoc.pdf before investing in options.
My reply:
Underlying shares were reserved for my short postion on 7/25 when I purchased those contracts:
Transaction ID: 4074566871
Order Number: 4089171207
Underlying: 939322103
Strike: 4.00
Put/Call: Put
Expiration: 09/20/2008
Session: Regular Market Hours
Date Entered: 07/25/2008
Time Entered: 11:28:48
Commission: 12.50
I do not think you fully understand the SEC ruling. I paid for the right to be short those shares and I am entitled to hold those shares short right now and I request you put that position in my account where it belongs. That order was filled, it shows as filled, the position was in my account and you evaporated it without my consent. Can you explain to me how a trade I entered was executed and was in my account and you decided to not only remove the position, but it was done with no notice whatsoever being served to me? Before or after? I'm sure any jury can be taught to read a 5 day chart of WM and see the criminal activity you are engaged in. It's not a terribly large position, $4,000 short. We'll see what your bosses think of your actions when they have to send their lawyers to court in Boston (maybe small claims, I'll check with my lawyer to find out what venue will be the most expensive for you to defend in). My filled order is Order No. 4250996948 Entered:15:42:17 09/19/08, Exercise to close, Filled Order No. 4250996944 Sell 1000 Shares WM Short.
I need the precise time and any trader and tracking details of your unauthorized reversal of my entered order.
Thanks in advance, Nick no-last-name
posted by Rafaelloello at 1:56 PM on September 25, 2008
Response by poster: What kind of asshole are you that you think you can sell this to me as if it was in my best interest? Get ready to read about this on the internet, Nick. What no last names? I guess I wouldn't give mine either if I was a man like you.
Rafaelloello, I appreciate that you're upset, but go read the Consumerist for a while. Best rule of getting what you want is to be calm and polite.
Being a jerk isn't going to help your position. At all.
anastasiav,
I appreciate your advice and I know how to control my language (mostly), but in this case it was a very calculated move. I was purposely trying to "get him in the game" and perhaps get him to volunteer some information he might not, or better yet, get him to return fire and then I have some more leverage on him. You might think of it as dirty pool, but it is effective. The more information I can ply from him by whatever means gets me closer to finding their achilles heel. I'm not even sure what the law is here, but they did me a disservice by sitting on my trade. I half expected my exercise to get rejected and then I would have merely sold the contracts for a couple hundred dollars. I even thought about exercising all that week because I knew they would keep the price elevated through expiration to capture premium and I would have to wait until at least this week to make real money. With WM now at 1.69, this position is worth $2300. I think something will happen to WM this weekend and this will be worth $4000. I don't know if I'm at the top of the Options desk yet, but I suspect they'll be offering me something soon. If not I will start closing accounts and withdrawing cash while continuing to pursue them. It's kind of like dealing with bureaucrats. The will make your life a living hell, but with perseverance you can outlast them.
It sure would be nice to know If I am entitled under the law to be short this position. I know if I exercised Thursday I would be fine and it certainly doesn't seem fair that they can change the rules on contracts entered into months ago just hours before expiration.
posted by Rafaelloello at 2:20 PM on September 25, 2008
Rafaelloello, I appreciate that you're upset, but go read the Consumerist for a while. Best rule of getting what you want is to be calm and polite.
Being a jerk isn't going to help your position. At all.
anastasiav,
I appreciate your advice and I know how to control my language (mostly), but in this case it was a very calculated move. I was purposely trying to "get him in the game" and perhaps get him to volunteer some information he might not, or better yet, get him to return fire and then I have some more leverage on him. You might think of it as dirty pool, but it is effective. The more information I can ply from him by whatever means gets me closer to finding their achilles heel. I'm not even sure what the law is here, but they did me a disservice by sitting on my trade. I half expected my exercise to get rejected and then I would have merely sold the contracts for a couple hundred dollars. I even thought about exercising all that week because I knew they would keep the price elevated through expiration to capture premium and I would have to wait until at least this week to make real money. With WM now at 1.69, this position is worth $2300. I think something will happen to WM this weekend and this will be worth $4000. I don't know if I'm at the top of the Options desk yet, but I suspect they'll be offering me something soon. If not I will start closing accounts and withdrawing cash while continuing to pursue them. It's kind of like dealing with bureaucrats. The will make your life a living hell, but with perseverance you can outlast them.
It sure would be nice to know If I am entitled under the law to be short this position. I know if I exercised Thursday I would be fine and it certainly doesn't seem fair that they can change the rules on contracts entered into months ago just hours before expiration.
posted by Rafaelloello at 2:20 PM on September 25, 2008
Rafelloello, I do believe you are in the right. If I'm reading this correctly, Ameritrade seems to be claiming at least three separate excuses here:
- First, that your order did not go through -- obviously shown to be a lie.
- Then, that you did exercise the puts, leaving you short WaMu, but that they "reviewed" that decision following the no-financial-shorting rule and undid it (covered you) -- shown to be a mistake in the application of the rule, since shorts created from puts should be grandfathered in and not forced to cover.
- Now, they're saying that they covered for you, because otherwise your account would take a margin hit -- as you say, that's not their call to make. They probably think they're being nice to you, though.
It occurs to me that they may be trying to cover their asses (and force you to cover your shares) after accidentally committing "naked shorting" here, which the SEC is finally cracking down on. Having you short 1000 shares WaMu is not allowed (for them) if no one else at the brokerage is lending out their WaMu shares, which is possible given how few people hold that stock these days.
I would keep talking to the people at Ameritrade -- and that's talking, not yelling.
posted by Asparagirl at 2:20 PM on September 25, 2008
- First, that your order did not go through -- obviously shown to be a lie.
- Then, that you did exercise the puts, leaving you short WaMu, but that they "reviewed" that decision following the no-financial-shorting rule and undid it (covered you) -- shown to be a mistake in the application of the rule, since shorts created from puts should be grandfathered in and not forced to cover.
- Now, they're saying that they covered for you, because otherwise your account would take a margin hit -- as you say, that's not their call to make. They probably think they're being nice to you, though.
It occurs to me that they may be trying to cover their asses (and force you to cover your shares) after accidentally committing "naked shorting" here, which the SEC is finally cracking down on. Having you short 1000 shares WaMu is not allowed (for them) if no one else at the brokerage is lending out their WaMu shares, which is possible given how few people hold that stock these days.
I would keep talking to the people at Ameritrade -- and that's talking, not yelling.
posted by Asparagirl at 2:20 PM on September 25, 2008
Response by poster: "In addition, we are providing an exception to allow short sales that occur as a result of automatic exercise or assignment of an equity option held prior to effectiveness of this Order due to expiration of the option."
That's what I'm confused about, and I could see it wasn't going to happen. WM was at ~3.80 for hours, but I knew a big block would come in right at 4 to clear out options. I think one investment house just buys a million shares from another at the close at an elevated price and they are paid back with the same favor on another stock. That's why I entered an order to exercise, hoping it would go through. I didn't even care if I carried it as a loss for a while, because I knew WM was going down the tubes, if not this week, then next. Take a look at the 5 day chart and you'll see how crooked the action is. Just one tiny spike at the stroke of 4 to screw option holders. That's why I usually don't buy options, I usually just write them. The whole game is set up for the option writer to profit, not the purchaser.
What they're claiming is that the new law gives me the Option to be short 1000 shares at any time EXCEPT the last day of the contract. This is grossly unfair, because who is going to buy my contracts on the last day? Presumably they can't exercise them either, so what good are they to anybody unless they finish in the money at the stroke of 4? I decided a week earlier that I wanted to exercise, but I figured why do it early since I already paid for the luxury of being able to wait? In hindsight, I can see why. I had a feeling, too.
Rule #1 Don't sweat the small stuff.
Rule #2 It's all small stuff.
posted by Rafaelloello at 2:39 PM on September 25, 2008
That's what I'm confused about, and I could see it wasn't going to happen. WM was at ~3.80 for hours, but I knew a big block would come in right at 4 to clear out options. I think one investment house just buys a million shares from another at the close at an elevated price and they are paid back with the same favor on another stock. That's why I entered an order to exercise, hoping it would go through. I didn't even care if I carried it as a loss for a while, because I knew WM was going down the tubes, if not this week, then next. Take a look at the 5 day chart and you'll see how crooked the action is. Just one tiny spike at the stroke of 4 to screw option holders. That's why I usually don't buy options, I usually just write them. The whole game is set up for the option writer to profit, not the purchaser.
What they're claiming is that the new law gives me the Option to be short 1000 shares at any time EXCEPT the last day of the contract. This is grossly unfair, because who is going to buy my contracts on the last day? Presumably they can't exercise them either, so what good are they to anybody unless they finish in the money at the stroke of 4? I decided a week earlier that I wanted to exercise, but I figured why do it early since I already paid for the luxury of being able to wait? In hindsight, I can see why. I had a feeling, too.
Rule #1 Don't sweat the small stuff.
Rule #2 It's all small stuff.
posted by Rafaelloello at 2:39 PM on September 25, 2008
Response by poster: It occurs to me that they may be trying to cover their asses (and force you to cover your shares) after accidentally committing "naked shorting" here, which the SEC is finally cracking down on. Having you short 1000 shares WaMu is not allowed (for them) if no one else at the brokerage is lending out their WaMu shares, which is possible given how few people hold that stock these days.
In *theory*, this should not be the case. I should be paired with someone from the pool of investors that took the option premiums. It's their obligation to deliver the short position to me when I exercise. The fact is, there isn't any smart people who wouldn't rather have that position for themselves, and I suspect that might be some of what's happening here. I think when they come to realize that I'll make $10,000 worth of noise and pull several hundred thousand dollars of accounts (one by one and making sure everyone I can tell knows that this one position is the reason) they'll want to work something out. I'm not a lawyer, but I have represented myself in court several times and know how to file for suit and discovery, etc. It's really pretty easy. They'll eventually come around, I'm sure.
posted by Rafaelloello at 2:53 PM on September 25, 2008
In *theory*, this should not be the case. I should be paired with someone from the pool of investors that took the option premiums. It's their obligation to deliver the short position to me when I exercise. The fact is, there isn't any smart people who wouldn't rather have that position for themselves, and I suspect that might be some of what's happening here. I think when they come to realize that I'll make $10,000 worth of noise and pull several hundred thousand dollars of accounts (one by one and making sure everyone I can tell knows that this one position is the reason) they'll want to work something out. I'm not a lawyer, but I have represented myself in court several times and know how to file for suit and discovery, etc. It's really pretty easy. They'll eventually come around, I'm sure.
posted by Rafaelloello at 2:53 PM on September 25, 2008
Response by poster: Today's final chapter:
All of the information needed regarding the issue has been given to you in previous communications. This matter is considered closed and our reversal of the exercise request stands as is in the account. All further communications will need to be forwarded in writing to our compliance department in the form of an official complaint.
The address is:
TD AMERITRADE
Regulatory / Compliance Department
PO Box 2148
Omaha, NE 68103-2148
Thank you,
Nick D.
Options Desk, TD AMERITRADE
Division of TD AMERITRADE, Inc.
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Please read Characteristics and Risks of Standardized Options at http://www.theocc.com/publications/risks/riskstoc.pdf before investing in options.
My reply:
No Nick,
You have not provided me the information. I specifically need to know:
1. Who erased my position?
2. When did they erase it?
3. What is the order number of that transaction or other reference number of the reversal?
and here's two new ones:
4. Why do I have a filled order in my trade order status but there is no record anywhere in my account of that order being un-filled?
5. Is it standard practice to remove positions from your customer's accounts and not provide any record or notice of it?
I will follow up with lots and lots of people and lots and lots of places including your compliance department. I will also re-ask these same questions every day of your options desk until I get the answers I require(via a new request, so it doesn't go straight to you). Whether you want to continue to not handle them or pass them off to someone more senior, I guess you'll make that decision every day.
I will also be closing one account a week starting next week (My wife and I have 5) and I will cite your handling of this as the reason every time.
I will then call on my friends and family and urge them to transfer their accounts and cite this trade as their reason to stop doing business with Ameritrade.
I will also be copying and pasting the complete chain of correspondence to various internet sites where there is already an interest. Maybe you can find where it's already happening, but it will be easier to find every day. I guess I'll find a more targeted audience on the WM and AMTD discussion boards on Yahoo Finance. Perhaps this has happened to some other people? I wonder who else has heard from Nick D.? I guess we'll find out soon.
Anyway, thanks in advance for answering my questions above,
I'll await your reply.
posted by Rafaelloello at 3:38 PM on September 25, 2008
All of the information needed regarding the issue has been given to you in previous communications. This matter is considered closed and our reversal of the exercise request stands as is in the account. All further communications will need to be forwarded in writing to our compliance department in the form of an official complaint.
The address is:
TD AMERITRADE
Regulatory / Compliance Department
PO Box 2148
Omaha, NE 68103-2148
Thank you,
Nick D.
Options Desk, TD AMERITRADE
Division of TD AMERITRADE, Inc.
Options are not suitable for all investors as the special risks inherent to options trading may expose investors to potentially rapid and substantial losses. Please read Characteristics and Risks of Standardized Options at http://www.theocc.com/publications/risks/riskstoc.pdf before investing in options.
My reply:
No Nick,
You have not provided me the information. I specifically need to know:
1. Who erased my position?
2. When did they erase it?
3. What is the order number of that transaction or other reference number of the reversal?
and here's two new ones:
4. Why do I have a filled order in my trade order status but there is no record anywhere in my account of that order being un-filled?
5. Is it standard practice to remove positions from your customer's accounts and not provide any record or notice of it?
I will follow up with lots and lots of people and lots and lots of places including your compliance department. I will also re-ask these same questions every day of your options desk until I get the answers I require(via a new request, so it doesn't go straight to you). Whether you want to continue to not handle them or pass them off to someone more senior, I guess you'll make that decision every day.
I will also be closing one account a week starting next week (My wife and I have 5) and I will cite your handling of this as the reason every time.
I will then call on my friends and family and urge them to transfer their accounts and cite this trade as their reason to stop doing business with Ameritrade.
I will also be copying and pasting the complete chain of correspondence to various internet sites where there is already an interest. Maybe you can find where it's already happening, but it will be easier to find every day. I guess I'll find a more targeted audience on the WM and AMTD discussion boards on Yahoo Finance. Perhaps this has happened to some other people? I wonder who else has heard from Nick D.? I guess we'll find out soon.
Anyway, thanks in advance for answering my questions above,
I'll await your reply.
posted by Rafaelloello at 3:38 PM on September 25, 2008
Wow. I haven't any advice for you but it'll be nice if you keep us posted.
posted by tksh at 6:51 PM on September 25, 2008
posted by tksh at 6:51 PM on September 25, 2008
Here is what my broker (Interactive Brokers) has to say about the SEC rules:
http://individuals.interactivebrokers.com/en/p.php?f=products&ib_entity=llc
Allowed:
* (A1) purchase of call options and exercise of long call positions
* (A2) sale of call options
* (A3) purchase and sale of put options
* (A4) purchase and sale of single stock futures
* (A5) exercise of long puts against a long stock position
Not Allowed:
* (NA1) early exercise of puts that would lead to a short stock position
Allowed, Pending Clarification of Regulations:
* (P1) delivery of a short single stock future position that creates a short stock position
* (P2) automatic exercise on expiration of puts that would create a short stock position
IB is very trader-friendly broker, so I suspect that if they don't allow the early exercise of puts leading to a short position, they have a good reason to believe that's what the SEC requires. Anyways, that doesn't excuse Ameritrade from lying to you and proving multiple excuses, but hopefully this information will be helpful.
posted by bsdfish at 12:30 PM on September 26, 2008
http://individuals.interactivebrokers.com/en/p.php?f=products&ib_entity=llc
Allowed:
* (A1) purchase of call options and exercise of long call positions
* (A2) sale of call options
* (A3) purchase and sale of put options
* (A4) purchase and sale of single stock futures
* (A5) exercise of long puts against a long stock position
Not Allowed:
* (NA1) early exercise of puts that would lead to a short stock position
Allowed, Pending Clarification of Regulations:
* (P1) delivery of a short single stock future position that creates a short stock position
* (P2) automatic exercise on expiration of puts that would create a short stock position
IB is very trader-friendly broker, so I suspect that if they don't allow the early exercise of puts leading to a short position, they have a good reason to believe that's what the SEC requires. Anyways, that doesn't excuse Ameritrade from lying to you and proving multiple excuses, but hopefully this information will be helpful.
posted by bsdfish at 12:30 PM on September 26, 2008
This thread is closed to new comments.
From the rule:
http://sec.gov/rules/other/2008/34-58592.pdf
posted by gjc at 8:29 PM on September 24, 2008