Direct access options broker

[osho67]

I am searching a cheap broker for direct access options trading apart fro IB. Any idea who comes close to IB in commission rates? And will also accept UK resident accounts. Thanks

 

[bulldozer]

I am searching a cheap broker for direct access options trading apart fro IB. Any idea who comes close to IB in commission rates? And will also accept UK resident accounts. Thanks

=========================================================
Osho,

Cheap is BAD news!
Get a broker who has good common sense rules! wiv good margin rules and regulated with the UK FSA!! IB rules on margin stinks! Yes, they are cheap but that can lose you money! why? cause they mess wiv your positions when you dont want them to.
Read the stuff i put out on IB on this forum! If you cant find them [the stuff] let me know and I'll try to find it for you.

List of brokers:
http://www.find.co.uk/investments/derivatives_options_&_warrants_page_2/


Bull

[email protected]

 

[Directional]

I've traded options in the past via TradeStation who clear thru RJ O'Brien if I recall correctly... their OptionStation platform was pretty good IMO and commission rate was reasonable as far as retail brokers go, around the same or less than IB

as dozer says, its worth doing your homework on the brokers you check out, and read their agreements very carefully - IB has some wierd rules in their documentation that are very suspect and highly tilted in their favour including such things as they reserve the right to take the other side of your trades and trade against you, or trade with you etc.

Not good!

TradeStation only do US options on stocks and indices, no futures options or european markets unfortunately.

 

[osho67]

Dear Bull

I would like to be fair to IB. I have been with them now for three years. In this period there has never been any error in my dealing on their platform. The executions are fast, choice of instruments is massive. Without them I would have never traded options on YM, ER2, ES , DAX, CAC40, ESTX50, and some others as well.

They have always promptly replied to my e mails. and one to one chat is easy as well. The customer service has improved a lot and is as good as any direct access brokers.

Thanks for your opinion but I am so happy with IB. I would even volunteer to pay them a bit higher commission.

osho

 

[bulldozer]

Osho,

During your yrs wiv IB have you ever been on margin-call? If so? plz tell us the following:

1. Did they liquidate positions if on margin-call
2. Did they first contact you.
3. Do they give you a chance to adjust positions when on margin-call
4. Do they allow you grace period to adjust positions or give you time to pump in more cash into account without them intefering wiv positions.
5. Do they tell you how much they add on top of margin set by clearing house.
6. At what level on margin-call for them to liquidate
7. Can they just close one or two positions to take account out of margin-call and leave the rest of positions well alone. [wivout liquidating ALL positions]

8. Have u read up all their rules and on liquidation power of your account etc

9. Why are U now looking for another broker [ you dont need to answer this one if U dont want to]

Bull

[email protected]

 

[osho67]

Dear Bull

I have never been on a margin call as I sell naked puts and calls, I donot wat to overtrade so I always have spare funds in my accounts.

At the moment I am managing several accounts for the family and friends. I have been requested to manage more accounts and I would just like to diversify using other brokers.

I thank for your concern and will bear that in mind

 

[def]

Bull,
Here we go again with your misleading info. You seem to think and imply that a broker who allows clients not to maintain appropriate EXCHANGE required margin is a good thing. If you trade options you should maintain adequate cash in your account.

In regards to IB's autoliq policy, it certainly provides a level of comfort to those individuals and institutions with several millions in assets with us. It reduces the probability of a rogue trader causing massive losses to the firm. it also enables IB to reduce bad credit from clients who fail to pay up on margin calls and thus allows IB to pass that savings on via lower fees (I'll also note, that IB doesn't charge for exercise/assignment, doesn't charge for incoming and the first outgoing wire each month, offers better margin and interest rates than most firms and is regulated by the FSA in the UK as well as the SEC, CFTC, NYSE, etc in the US, SFC in HK, ASIC in Australia, etc). For those pushing the limits, they can select the order of instruments that get liquidated and I should note that out of the several hundred thousands of trades that go through the IB system each day, the number of liquidations that actually occur is insignificant in number.

So is cheap Bad news? I'd answer yes if the executions and service were poor. However, at IB the execution quality is excellent. In fact, I doubt you can find a firm that does a better job.

 

[bulldozer]

MR Def,

You have made it clear that you work for IB in one of your posts to me some months ago! So its logical you will defend the company you work for! cause they are paying your wages.
I for one dont like your company rules on margin and that they liquidate as soon as positions are on margin-call. They should only close out enough positions to remove the margin-call and NOT LIQUIDATE ALL POSITIONS! when just a few will do!!
I dont want to have any arguements wiv you!! cause you dont answer a straight question wiv a straight answer.
Def, read my lips! Your service may be good? but your rules on margin is not good enough for me and people wiv many yrs experience in options. I am not concerned why they have those rules! other brokers dont have those rules! why? cause they have better clients who wont put the brokers at risk of going bust. :cheesy:

Osho,
Because of your fear of their margin rules ie liquidation etc, has it accured to you that you may be UNDERTRATING? in the number of contracts and hence you are losing more income from premiums.
Another broker may allow you to trade more contracts wiv the same money U have wiv IB? and it does not matter if youve overtraded cause they will allow U to adjust positions to bring it out of margin -call or allow you more time to add money to remove margin-call.
Less contracts cause of fear of liquidation = less income!

I would never trade wiv IB! why? cause there are better brokers out there wiv better margin rules. Yes!! IB are cheap, infact very cheap! but that should NOT be the reason to open account wiv them!! And remember this ! just one contract extra = more than £100 taken in from premium! :cheesy: So cheap commission does not mean savings
Its not rocket science its just common sense!

Bull

[email protected]

 

[osho67]

Dear Bull,

What would you say a fair percent return on your capital employed.

 

[bulldozer]

Dear Bull,

What would you say a fair percent return on your capital employed.

======================================================

Good question!
But it depends on many factors:

1. Which options your doing [index or stock american style or eu style]
2. How far OTM your positions are or if ITM or ATM.
3. Knowing the marg rules and use them to your advantage and NOT thru fear.
4. How much hedge your using and when you put hedges in! and what types of hedge.

5. If my performance return is below 30% per annum on option writing? I would consider that as poor.

6. I reckon you have lost more than £10K of potential income on your account over 3 yrs, cause of fear of margin-call liquidation rules Thats just my opinion! I'm sure you would agree wiv what I'm saying Writing naked put options you deserve good rewards for the courage or risk you take. I too am a put writer but in footsie index but i make sure i use my capital to the full potential and i make sure i have some reserve cash elsewhere incase of emergencies! if U know what i mean?
I have been on margin call around 6 times every year, wiv 3 days grace added in, by broker to adjust or reduce or convert positions or add cash in order to take out marg-call.
I dont need to bull s hit you! i have no reason or gain to do so.

Your a short strangler player! and i fink you know what I'm saying above is not bull s hit!

Bull

 

[A Dashing Blade]

Yawn, here we go again, Bulldozer stepping in with his size 12's, txt spk and smilies slagging off IB

Forgetting about IB = Good/Bad whatever, your quote "Get a broker who has good common sense rules! wiv good margin rules and regulated with the UK FSA!! " can't be left unchallanged.

As has been pointed out to you before iirc, when you go over margin, it's your broker who is at risk.

Please read the next sentence carefully

Any broker who consistantly allows a client/clients to breach exchange minimum requirements is demonstrating very poor risk control (unlimited downside if the position gets progressively worse and client fails to meet the requirement) and is in danger of being fined (maybe barred?) by the SFA.

Understand? Given your views on risk vs reward, do you think that is a good trade? If your broker gives you a bit of leeway then so be it. But it seems to me that your definition of a "good" broker is seriously skewed.


Anyway, the original question was "I am searching a cheap broker for direct access options trading apart fro IB. Any idea who comes close to IB in commission rates? And will also accept UK resident accounts. Thanks"

My answer is no.



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

 

[osho67]

Thanks A Dashing Blade for going to the original question. Your reply is helpful.

 

[bulldozer]

Yawn, here we go again, Bulldozer stepping in with his size 12's, txt spk and smilies slagging off IB

Forgetting about IB = Good/Bad whatever, your quote "Get a broker who has good common sense rules! wiv good margin rules and regulated with the UK FSA!! " can't be left unchallanged.

As has been pointed out to you before iirc, when you go over margin, it's your broker who is at risk.

Please read the next sentence carefully

Any broker who consistantly allows a client/clients to breach exchange minimum requirements is demonstrating very poor risk control (unlimited downside if the position gets progressively worse and client fails to meet the requirement) and is in danger of being fined (maybe barred?) by the SFA.

Understand? Given your views on risk vs reward, do you think that is a good trade? If your broker gives you a bit of leeway then so be it. But it seems to me that your definition of a "good" broker is seriously skewed.


Anyway, the original question was "I am searching a cheap broker for direct access options trading apart fro IB. Any idea who comes close to IB in commission rates? And will also accept UK resident accounts. Thanks"

My answer is no.



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

=====================================================================

DB,

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.
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.
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?

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?

Osho,
I think IB can handle another 2-4 accounts from you? i dont see that you have any problems? Plus you say you are more than happy wiv their service! Unless of course you are looking for a broker wiv dffrt rules?

Bull

 

[osho67]

I am here to make money and that is the only narrow focus. IB is exceptionally suited at the moment to fulfill my purpose. IB 's platform is superb. Even in US many brokers donot allow options on futures. Thanks for your 30% estimate which has convinced me that I am not undertrading. My aim is to reach 4% per month.

 

[bulldozer]

Osho, dashing blade,
Do all brokers in the USA have same rules and same margin rules for their clients? If your answer is NO!? My next question is why NOT?

The same questions also on UK Brokers plz.

If the FSA make the rules for brokers? than it stands to reason that the rules should be the same for all brokers innit? :cheesy: Dont get me wrong! I'm saying some rules are set by FSA and some NOT! :cheesy:

I am interested to know your reply to this post and my previous post.

Bull

 

[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.

 

[bulldozer]

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.

=========================================================================

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

 

[bulldozer]

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? :cheesy:



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

Bull

 

[A Dashing Blade]

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")

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 . . . )

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.

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?)

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..

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.

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.

 

[peto]

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.

For those pushing the limits, they can select the order of instruments that get liquidated