Direct access options broker

This is a discussion on Direct access options broker within the Brokerages forums, part of the Commercial category; Originally Posted by osho67 Dear Bull I donot understand why you have this fixation in your mind about margins. Suppose ...

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Old Oct 11, 2005, 9:51pm   #17
Joined Jan 2005
Quote:
Originally Posted by osho67
Dear Bull

I donot understand why you have this fixation in your mind about margins. Suppose IB is not doing right, Their clients power -which is vast- will make them do it correctly. At the moment I am exploiting IB and making money because of their practically nil charges.
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Osho,
Your missing the point.
I understand that your are happy wiv IB and their rules! I'm not asking you do get dffrt rules to the ones you have! or a better deal!
My questions was basically, do all US brokers work on same set of rules and margin rules? and if not why not? I was mainly asking Dashing Blade and i wanted to see what your reply is? thats all!
Some brokers liquidate ALL positions if your on margin call, others dont.!! You have one that DOES!! thats all i'm trying to get you to see!! If your happy wiv that? thats fine! you dont need to find other brokers. Some brokers will only close what is necesary in order for margin call to be removed!. Now do you understand where I'm coming from?

Whats the big deal wiv asking questions on brokers rules? and set ups.

Bull

Last edited by bulldozer; Oct 11, 2005 at 10:21pm.
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Old Oct 11, 2005, 10:03pm   #18
Joined Jan 2005
Quote:
Originally Posted by A Dashing Blade
Yawn, here we go again, Bulldozer stepping in with his size 12's, txt spk and smilies slagging off IB



Anticapating your "LOL you kid go and learn about options" typical response when someone challanges you, here's my background . . .

1985 - 91 : LTOM Equity options Extel rated broker/analyst (vividly remember put writers getting blown out of the water over the Crash)

1991 - 94 : LIFFE Futures & options trading (on and off the floor)

1995 - date : IT guy sitting on various prop trading desks
What percentage got blown out of the water over the crash? [a rough gess will do?]
Cause my next question to you is why did'nt the rest get blown out the water?



Do all brokers have same rules on liquidation when account goes on marg-call? if NOT why not?

Bull
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Old Oct 11, 2005, 11:08pm   #19
 
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Joined Jul 2004
Quote:
Originally Posted by bulldozer
UK brokers are NOT taking any risk at all!! Plz allow me to tell/teach you why!?

Firstly i can only speak on the brokers i use.
1. They give you a form to fill in wiv MANY questions.
2. You also have to state your NET worth [cash, assests,property/homes, stocks cetificates, bonds etc]
3. They do not take on novices wiv less than 6 months expireince to trade short strangles.or any naked positions.
4. They need to be FULLY convinced you know what your doing and how to get out of sticky situations, convert, hedge etc.
5. You also sign a document that allows them to take legal action against your assets.
6. If you dont pass the questionair they will not allow you to trade FUTURES or NAKED OPTIONS.
7. These forms are SET by the FSA regulations.and if the brokers are in breach of these rules? yes they are fined and if they do it again perhaps more bigger fines or loss of license.

er . . . client is economic with the truth? (+ in my day there was a check box saying "I don't want to answer these questions")


Quote:
Originally Posted by bulldozer
8. If it was against the fsa rules to let a client trade naked?! Then over 70 % of brokers are in breach of FSA rules. I was on margin call wiv a big London broker many times and i have allways settled the problem on the third day of grace or before.
Naked = unmargined rather than unhedged by another position? If yes then you are correct, over 70% of UK brokers break SFA rules. (Why is another matter . . . )


Quote:
Originally Posted by bulldozer
9. If a client has £1Ml in OPTION account and positions lose £2Ml in a crash [like 1987]] and that client has over £2ml in assests?! does the broker suffer any loss?
er . . . you wanna guarentee the client only has one broker, his house is not mortgaged up to the hilt etc? In any forced liquidation it's every creditor for him/herself. Been there, seen it, done the role playing.

Quote:
Originally Posted by bulldozer
9. You sound that your a person wiv common sense?! and wiv good backround too. Tell me how many traders went bust trading naked options/ short strangles on footsie index in the last 20 yrs? in percentage terms plz you dont need to be precise! just give a rough percentage?
Bull
Been out of footsie for 10 years or so, but I'd hazard a pretty educated guess that the bust-out rate is a ballpark 10-15% p.a. (surprised? do you really think it's in the markets interest in publishing these numbers?)

Quote:
Originally Posted by bulldozer
What percentage got blown out of the water over the crash?
Pretty much anyone with a written put. End Of. Option writers (partic private clients) tend to make the same assumptions that underly Black & Scholes, that's why they ultimately blow up..

Quote:
Originally Posted by bulldozer
Cause my next question to you is why did'nt the rest get blown out the water?
'Cos they didn't have any written puts over a 22 standard deviation event.

Quote:
Originally Posted by bulldozer
Do all brokers have same rules on liquidation when account goes on marg-call? if NOT why not?
Doubt it (risk aversion being the main reason), but my original point (and question to you, which you've failed to answer) was regarding those brokers with exchange minimum margin requirements.
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Old Oct 11, 2005, 11:29pm   #20
 
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Joined Dec 2002
Quote:
Originally Posted by bulldozer
Some brokers liquidate ALL positions if your on margin call, others dont.!! You have one that DOES!!
Bull
def , an employee of IB, has already made it clear that this is incorrect, and furthermore that the order of liquidation may be selected.

Quote:
Originally Posted by def
For those pushing the limits, they can select the order of instruments that get liquidated
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Old Oct 12, 2005, 3:31am   #21
def
Joined Feb 2003
I stated the same as well. Bull is incorrect when he states ALL positions will be liquidated. The size of the position liquidated is determined by what will bring the position back into compliance. You are also correct when you state that clients can choose the order of positions liquidated.

Bull, you are incorrect to state that a firm has no risk. If you are unethical you can tell your broker that you have $X in assets but still not pay up if you go into default. Unfortunately fraud is a common day occurance in this world and the larger the loss the higher the probability that someone will fail to pay.
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Old Oct 12, 2005, 12:50pm   #22
Joined Jan 2005
Dash blade, def, others,

If my accounst was wiv IB, i would have been liquidated on the day of London bombings 7/7! AT MASSIVE LOSSES. With my present broker this did NOT happen! AND ALL my short puts positions made profits cause my broker did NOT interfer wiv my positions! WITH IB i would have been closed out within the first 3 hours of the bombings!! THATS the difference.!! Yes, you have good service perhaps and good platforms too perhaps and cheap fees, but your margin rules and liquidation rules does not suit me! It may suit others like Osho, thats fine if he's happy with that arrangement.

Read this below:

http://www.trade2win.com/boards/show...3&page=9&pp=10


http://www.trade2win.com/boards/show...&page=10&pp=10

Last edited by bulldozer; Oct 12, 2005 at 1:00pm.
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Old Oct 12, 2005, 12:51pm   #23
Joined Jan 2005
Quote:
Originally Posted by def
I stated the same as well. Bull is incorrect when he states ALL positions will be liquidated. The size of the position liquidated is determined by what will bring the position back into compliance. You are also correct when you state that clients can choose the order of positions liquidated.

Bull, you are incorrect to state that a firm has no risk. If you are unethical you can tell your broker that you have $X in assets but still not pay up if you go into default. Unfortunately fraud is a common day occurance in this world and the larger the loss the higher the probability that someone will fail to pay.
IB's rules :> WE WILL LIQUIDATE POSITION IF THERE IS UNSUFFECIENT CASH IN ACCOUNT TO MEET MARGIN CALLS OR LOSSES!!!! in the first hour without contacting the client TRUE OR FALSE?


Read this below:
http://www.trade2win.com/boards/show...&page=10&pp=10


Bull

Last edited by bulldozer; Oct 12, 2005 at 1:23pm.
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Old Oct 12, 2005, 2:19pm   #24
def
Joined Feb 2003
bull, give it a rest. every time you eat crow you go back and point to an old post. i'm pretty certain the word "unsuffecient" as you post above is not in my (or anyone else's) vocabulary. I stated above a portion of the portfolio will be liquidated to bring an account into compliance. ever hear of the term "beating a dead horse".
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