13h large trader designation my broker sent me email that i possibly need to file this

D

darwin666

has anyone got this intimation.

i bot 500 contracts of SPY OTM call. at ~5 cent range.- it was a directional bet ( thats not the point) but i later closed it out for a small profit.( few cents.)

but in effect i did 1000 contracts on spy that day. huh.
so my broker send me email that I am as per SEC sec13h now considered a Large trader and I have to file this 13h within 10 days. ??

saying that i did 1000 contracts X100 X210 =21 million. in 1 day and this is >threshold

http://www.sec.gov/divisions/marketreg/large-trader-faqs.htm
 
The regulation does state "activity level" as opposed to control. So buy + sell is your broker's definition of activity level. Unusual. I would think hundreds of thousands of people do this or more turnover.
 
I just had to file for this myself. Apparently it doesn't take much if you are trading in the SPX or other expensive indexes.
 
Yes, you need to file. It's an archaic process to go through (screen print, no signature page, etc) but it is required if you've been notified.
 
RMORSE, you are correct. Yet, very few traders are even aware of the large trader designation and I doubt many have self-reported without first being notified by their broker. Perhaps, I should have said, "if you have been notified, you need to file. If you haven't been notified, you still may need to file."
 
To be honest, I've been in this buiness for a long time. I'm not sure when this report requirement started, I only learned of it in mid 2014.
 
On July 26, 2011, the Securities and Exchange Commission (“SEC”) adopted Rule 13h-1 under the Securities Exchange Act of 1934 to require large trader registration, reporting and monitoring. The SEC stated that the large trader reporting regime will assist in identifying and obtaining certain baseline trading information about traders that conduct a substantial amount of trading activity, as measured by volume or market value, in the U.S. securities markets.

Specifically, the large trader reporting regime according to the SEC will facilitate (1) its ability to assess the impact of large trader activity on the securities markets, (2) the reconstruction of trading activity following periods of unusual market volatility, and (3) the analysis of significant market events for regulatory purposes.
 
But it's implementation has taken a little bit of time, for example:

SECURITIES AND EXCHANGE COMMISSION (Release No. 34-70150) August 8, 2013 Order Temporarily Exempting Certain Broker-Dealers and Certain Transactions from the Recordkeeping and Reporting Requirements of Rule 13h-1 under the Securities Exchange Act of 1934

http://www.sec.gov/rules/exorders/2013/34-70150.pdf
 
Here is a reply that I sent when they tried this twice on me.

I do not believe that my account is anywhere near the requirement for Large Trader
Classification.

The requirement of 2 million shares a day or 20 million shares a month translates into
20,000 contracts a day of 200,000 contracts a month for normal 100 lot option contracts.

My account came nowhere near either of these two levels.

The dollar volume of $20,000,000 per day or $200,000,000 is grossly above my trading
level. If you look at the calculation of trading volume in SEC document 34-64976, you will
see that INDEX OPTION trading values is based on the market price of the transaction,
(see note 64 on page 28 of the attached document). This is different than the treatment of
equity options which are based on the value of the underlying security at option exercise,
as described in the SEC Frequently Asked Questions at:

<http://www.sec.gov/divisions/marketreg/large-trader-faqs.htm>

in Question 1.3 response. Thus, my account would have had to have index option trades
with actual execution dollar values of $20,000,000 der day or $200,000,000 per month.

In actuality, there is no volume requirement / limit for index options. Index options volumes
are NOT included in Large Trader identification at any level per the SEC document, only the dollar value of the
actual market price transaction of the option, NOT the underlying.
 
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