Futures broker - any recommendations?

[urep]

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BRAVO!
At last someone with brains in the right place!

I dont think the two accounts combined would have been enough to cover such risk!

:

Yeah I think he had 15 K in the other account so it wasn't a total loss of his other non-IRA account. I just wonder if the trade would have happened if Dev17 didn't have the other account? i.e. if IB's money was at risk?

I was quite shocked when I read that thread; that there are no automatic margin rules to prevent this; regardless of who the broker is.

 

[bulldozer]

Yeah I think he had 15 K in the other account so it wasn't a total loss of his other non-IRA account. I just wonder if the trade would have happened if Dev17 didn't have the other account? i.e. if IB's money was at risk?

I was quite shocked when I read that thread; that there are no automatic margin rules to prevent this; regardless of who the broker is.

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The broker can only trade in the account the order was given by client.
No broker has the right to put trade in any other account except the account the client requested.
I still think the client has a good case against the broker. A good letter from a lawyer who has experience with such matters would do the trick. IB dont like bad publicity and would settle the problem and pay compensation to client too.
Whats the cost of a letter from lawyers $500 at most?
I'm not a member of that forum [elite] but if anyone is? Plz tell Dev17 I'm prepared to pay to his lawyers $500 toward a good letter.

I also would like to add [for the sake of novices]
Novices should trade with a broker that provides full service and its dangerous to place OPTION ORDERS online cause the machine dont talk back to you! if trade is dangerous. :idea:

Always place Option orders with a broker you can talk to over the phone! cause he would be in a position to spot dangers with chosen trade!
Option are VERY risky!! PLEASE take my advice. Its worth paying that extra $2-4 in commisions and place orders with a human at the other end who UNDERSTANDS risks and would be in position to advise you if trade is TOO dangerous or not and when it should be closed and when expiry day is.
Remember, just ONE BIG mistake in OPTIONS you run the risk of losing your shirt and yur house and yur wife TOO [divorce]

Bull
Happy trading and plz dont allow others to decieve you about how good a broker is.
Ask DEV 17 how good his brokers were or was. :cheesy:

 

[Silent.Trader]

Why would a broker (especially a computerized broker with instant buying power calculations) let a customer purchase 1600 shares of GOOG with and $800 account?

You forget that this was out of hands of IB. It's the OCC that excercised the options. Not the broker and not the customer.

 

[Silent.Trader]

Novices should trade with a broker that provides full service and its dangerous to place OPTION ORDERS online cause the machine dont talk back to you! if trade is dangerous. :idea:

Exactly, a novice should not trade with IB. IMHO that is exactly what IB themselves tell prospect customers. For experienced traders that know what they are doing and take their own responsibilities I see no need to avoid IB. If you sign up with IB you're requested to provide information about previous trading experience. I don't know what experience is needed to be allowed to sign up. I don't know or they reject customers on basis of trading experience at all. I suspect they don't verify provided data., but their own message is clear, novices should not sign up. So if you're a novice level trader and need a phonecall to warn you that your options expire, that options may be excercised by the OCC and that this may involve a significant risk you should not trade with IB. This is imho a completely different statement than your previous statements that IB is complete crap.

grtnx
Wilco

 

[bulldozer]

Exactly, a novice should not trade with IB. IMHO that is exactly what IB themselves tell prospect customers. For experienced traders that know what they are doing and take their own responsibilities I see no need to avoid IB. If you sign up with IB you're requested to provide information about previous trading experience. I don't know what experience is needed to be allowed to sign up. I don't know or they reject customers on basis of trading experience at all. I suspect they don't verify provided data., but their own message is clear, novices should not sign up. So if you're a novice level trader and need a phonecall to warn you that your options expire, that options may be excercised by the OCC and that this may involve a significant risk you should not trade with IB. This is imho a completely different statement than your previous statements that IB is complete crap.

grtnx
Wilco

==============================================================
ST,
An experience option trader would not use IB, cause their margin rules are CRAP! Just the first paragraph tells you its CRAP! :cheesy:
Those margin rules by IB are designed for novices that trade options. They say [or should i say] Mr Def says "The marg rules are there to protect the company aswell as the client."
An experience option trader does not need protection from his brokers cause he knows the risks and he knows how to adjust positions to get out of sticky situations. But the marg rules dont allow you to adjust positions if yur on marg-call! Its for that reason i said they are designed for novices.
Ask any experience option player would he accept IB marg rules.

IB perhaps tells all their clients they are NOTsuited for novices, they say this to protect their backside incase things go wrong [like in the case of dev 17] and are caught up in legal action. Because they dont provide a full service! If they are really good brokers? Why did they take on Dev 17 on as client? The truth of the matter is they know people lie on the application form and IB are probably happy wiv that incase the client messe's up and they have covered them selves in law, cause the client said he has experience in the forms. The truth i suspect is that IB will sign you up even if you read ONLY HALF a book.
A GOOD UK broker would have insisted on Dev17 to pay the xtra £1-3 and insisted he should sign up for the full service, provided he passed a small verbal test of about 6 questions. [now thats my definition of a "GOOD" broker] and NOT one wiv cheap commissions and because they have a LARGE number of clients.

The novices NEED a full service for the first 2 yrs at least!! to get to know the real risks and marg rules.and the GREEKS!!!
Tell me then? If IB are NOT suited for novices, why is it they take them on? surely that in itself is against the FSA rules.
I bet you that a BIG percentage of Option clients with IB are novices.

Dont ask people why they signed or are with IB? but you should ask why people have left IB? or why they have jioned another broker? or why they no longer trade options? OR WHATS happened to their account in trading options?

If any of you guys want to LOSE ur hard earned cash then sign up wiv a broker that signes up many novices and dont asks many questions and dont provide a full service! :cheesy:

Good luck! cause, believe me yur going to need it!

Bull

 

[Silent.Trader]

Why did they take on Dev 17 on as client? The truth of the matter is they know people lie on the application form and IB are probably happy wiv that incase the client messe's up and they have covered them selves in law, cause the client said he has experience in the forms.

Sorry, but if a customer lies I really can't held IB responsible for the results. If a sucker wants trouble they can get it. That's not the responsibility of the broker. If dev17 lied to IB to get signed up that 's 1 more reason for having no pity with dev17.

And then, if dev17 lier and lied about his trading experience to IB, why should I believe the a story he posts anonimously at some forum?

As I said before it may well be that IB is responsible. The argumentation you provide does however not convince me.

grtnx
Wilco

 

[urep]

You forget that this was out of hands of IB. It's the OCC that excercised the options. Not the broker and not the customer.

You forget that this was out of hands of IB. It's the OCC that excercised the options. Not the broker and not the customer.

Well someone had to put up the money/margin for this 1/2 million dollar purchase. It wasn't the client since he only had $800 in the account. IB or any broker for that matter has margin rules that prevents this trade under regular trading circumstances. Do you think if this client requested this excercise outside of expiration day, that it would have been rejected for lack of sufficient funds?

As far as being out of IB's hands I disagree; IB should of, or could have rejected or invalidated the option excercise process just as they would reject any other trade through calculating the accounts buying power (the same way the customer could have stopped it). Simple safegard step in programing to say IF at closing price on expiry date, account buying power is not margin capable THEN do not proceed with excercise of ITM options.

You get a statement Monday that you didn't have the funds to purchase 1/2 million dollars of stock with $800 in a cash account and no problem: who could or would try to fight this?

I don't think IB taking on 1/2 million dollar risk with an $800 account on Saturday to carry to the open Monday is smart broker risk management. They or Timber Hill were on the other side of this trade and i think that is why the let it go through. Remember this was a cash account IRA that should not have been extended any margin.

 

[def]

bull,
most experienced option traders trade with a well capitalised account. If you knew the option volumes going through IB, it would be obvious that experienced and active traders are using our firm. you talk as if $2-3 per contract is nothing. All I know is that if you do 50 contracts a day that would equate to $25,000 to $35,000 per year. That doesn't even take into account the quality of executions IB provides. If you're doing that volume, the savings in execution quality could also be a multiple of that number.

urep,
all IB client orders are sent to a destination where it is believed they will get the best available price. I am certain that the price of the stock execution was fair at the time of the trade. your comments are incorrect.

you are posting comments and making blanket statements without all the facts nor full comprehension of the US rules and regulations.

 

[bulldozer]

I've dicided to put some tips,advice,warnings etc on options trading for free! In the hope you'll make good decisions when you trade options.
Of course your not obliged to take my advice and you can reject some or all the points I'm listing below.

1. Know the dffrce between American style and European style options.

2. Know the GREEKS especialy the the DELTA and the THETA.

3. Know your margin rules and obtain other margin rules from other brokers also from abroad.

4. Know ALL there is to know about excecise and asignments etc.

5. Never write naked unless your prepared to lose lots of money.

6 . Learn MORE than 6 strategies.

6. Have a plan to convert out of one strategy into another when in trouble.

7. Make sure your brker allows you to convert positions if your account is on margin call

8. Make sure that your broker has NOT the right to liquidate positions if on margin call

9. Make sure that you are allowed at least 3 days grace when account is on margin call

10. You must go on full service broker for at least 2 years if yur a novice, even if it means paying $1-5 dollars more in commisions and remember its NOT the savings in commisions thats going to contribute to your profits its KNOWLEDGE! [in options]

11. If you dont have ALL the above in YOUR favour or in place? DONT START TRADING OPTIONS.

12. Now for the most important point of all!! DONT FOLOW THE MAJORITY DECISIONS ON choice of brokers,strategies, options styles, or choice of stock / indices and remember its the losers that need to pay the profits to the winners and it is said by most if not ALL brokers that the majority of option traders are losers.

I hope i have not put you off options? but i think most novices dont realise the risks involved with option trading.

Bull
Happy learning and happy trading when the learning part is done

 

[bulldozer]

bull,
most experienced option traders trade with a well capitalised account. If you knew the option volumes going through IB, it would be obvious that experienced and active traders are using our firm. you talk as if $2-3 per contract is nothing. All I know is that if you do 50 contracts a day that would equate to $25,000 to $35,000 per year.

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Def,
Your not as smart as you think you are and also you are thinking like a sprdbtr thinks and not like an option player thinks. :cheesy:
Take the example of our friend Dev 17 he lost thousands of $$$ because he wanted to save around $100 in commissions! [if he had a full service and paid the extra $100 cmsions he would have save $ thousands of $$$$$]
Paying an extra $2-3 more per contract on an income of $1000 in premium PER CONTRACT is good sense and NOT bad sense! Whats $3 from $1000 = PEANUTS! [for full sevice]

Now lets get into the real maths and remember you accused me of being lousy in maths!

I did a "short strangle position OTM" on footsie index with over 1000 contracts for one of my clients.
He recieved £2.3 ml [yes millions] in just 5 months. Do you think he is bothered about paying a UK broker with UK rules and good marg rules with no FEAR of liquidation if ONE of the "SHORT STRANGLE" LEGS GO ITM THE EXTRA £1-3 COMMISSION ON 1,000 CONTRACTS FOR THE RETURNS HE MADE??? BY THE WAY BOTH STRANGLE LEGS EXPIRED WORTHLESS AND HE GOT TO KEEP ALL THE PREMIUMS RECIEVED AFTER JUST 5 MONTHS.

Please think b4 you post Your NOT talking to a fool here

You also said "that would equate to $25,000 - $30,000 per year" You forgot to tell us WHAT THE RETURNS WERE [profits] on that extra paymemts of commssions :cheesy: I would say its over $3 Million

Bull
Folow the crowd at your peril :cheesy:

 

[def]

apples and oranges my friend. if as you claim someone sold 1000 strangles and walked away for 5 months and pocketed all the premium, I wouldn't call him an active trader. big difference. I'm also sure that any broker taking on that trade would require exchange margin. furthermore, anyone taking on that type of risk should have ample capital at their broker. Finally, if I was a client of that firm, and the firm didn't have a strict margin policy, I'm not so sure I'd want to place my money there. Perhaps not this year and perhaps not next but over time, vol will explode and I wouldn't want to be around when the firm tries to obtain their cash.

one question: you so far have claimed:
1. you call your broker to trade out of a car
2. are a market maker
3. are a broker or fund manager

which is it?

 

[bulldozer]

apples and oranges my friend. if as you claim someone sold 1000 strangles and walked away for 5 months and pocketed all the premium, I wouldn't call him an active trader. big difference. I'm also sure that any broker taking on that trade would require exchange margin. furthermore, anyone taking on that type of risk should have ample capital at their broker. Finally, if I was a client of that firm, and the firm didn't have a strict margin policy, I'm not so sure I'd want to place my money there. Perhaps not this year and perhaps not next but over time, vol will explode and I wouldn't want to be around when the firm tries to obtain their cash.

one question: you so far have claimed:
1. you call your broker to trade out of a car
2. are a market maker
3. are a broker or fund manager

which is it?

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Who i am or what I'm involved with and what my company is or who works for me is NOT the issue here. Yes i also manage funds for clients.
I'm also the director, the owner,the manager of my company.
I'm also a husband,a father, a grandfather, and a son! I am many dfftr persons with dffrt responsabilities .
So in short is it imposible for me to be all of the above. I can speak at any capacity i shose! am i NOT correct?

Now plz reply to the points i raised in my last post . We are all waiting patiently to be enlightened with your wisdom and knowledge and STOP the diversion :cheesy:

Bull

 

[rossored]

Once again, I find myself closing this somewhat pointless thread.

We've now got onto Options - the thread is/was about futures.

Bulldozer - can you please stop SHOUTING at everyone.

It is fine for people to have disagreements, and there have been plenty of those on this thread. However, I believe that it has completely run its course, is adding nothing to the site other than a load of aggro, and will go round and round in circles for ever more, with one person saying one thing, and someone else arguing their point.

Please do not start another thread along these lines.