Thanks for including this –
I traded emails with both Tom and Scott Sheridan last night. Personally, I don’t believe the FINRA claim – Fidelity, E*Trade, Trade Station, Trade Monster, Interactive Brokers, etc..etc.. are all associated with FINA (obviously). However, none of them increase my margin from $4,000 to $40,000+ when adding a fly to my position making my max loss around $4200. I asked them why FINRA would be singling them out since no other brokers were doing this – I got a similar response as you. I almost responded with screen shots of Trade Monster and IB, but figured – why…they know its a problem, their “tech” people confirmed it.
I’ve decided on Trade Monster – keeping a smaller account open at TOS for the analytics, and execution on IB or Trade Monster. I wished them luck, and bid them farewell…
From: OptionClub@yahoogro
Sent: Wednesday, July 14, 2010 3:18 PM
To: OptionClub@yahoogro
Subject: [TheOptionClub.
Thanks Labib! I appreciate the note and trust me, we have fought with FINRA on every level regarding these ridiculous margin requirements (and they are no different at any other firm including OX). Every firm is being required to comply (or else). Unfortunately, when logic fails it is difficult to defend. Thinkorswim has been fighting with FINRA over the enforcement of these changes for two years now but every firm is being required to comply. It's only the net position that matters anymore.
Tom
From: Labib Imtanes [mailto:ldvn@pacbell.
Sent: Wednesday, July 14, 2010 2:39 PM
To: Tom Sosnoff
Cc: Tom Preston
Subject: Fw: Something wrong with your margin calculator
You guys are going to lose your customers, I for one thinking of moving to OptionXpress, if things don't change : Here is an example as of this writtig 7-14-2010 at 10:20 am Pacific time, I'm putting two Iron Condors on USA :
1- Sell August 34 38 call vertical and sell August 34 30 put vertical for the credit of $230 margin required $170 which is also Maximum risk. Fine your sinulator gives the right parameter.
2- Sell August 37 41 call verical spread and sell August 37 33 put vertical spread for credit of $ 244. and maximum risk of $156 and margin req also 156. also is fine and your simulator gives the right parameters.
Now when I put the two IC together the margin req jumps to $ 1027. whereas the maximum risk is $ 327 for both Ics.These are equidistant Ics nothing overlaps. so why the margin required Jumps from 327 to 1027 That's insane 3 times the maximum risk. If i do 10 of these my margin req will be 10270 . I can afford to trade 10 with margin of 3270 but I might not put the trade if the margin is 10270. You are forcing your customers to trade less and therefore you are ctting your own commission .
Thank you
Labib Imtanes
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