Best mainstream broker for options?

momoneythansens · Oct 5, 2006

Quote from a529612:

Isn't TOS getting bought out by someone else?

They're calling it a "merger":

http://www.elitetrader.com/vb/showthread.php?s=&threadid=77143

Unfortunately, the e-mail I received from ToS explaining the real deal has been deleted from that thread :mad:

ssmegner · Oct 5, 2006

My experience has been that even on American options they still look at the whole position. If you are assigned then margin comes into play. If you don't have enough in your account the account becomes "Subject to Liquidation". They will step in if they need to but not immediately. In fact they try to phone you up first rather than having some default 24 hour rule. I have been in an insufficient margin situation at TOS for several weeks and they did nothing. The amount was small. Before I dropped Fud-delity they liquidated a position less than 24 hours and for only $5.00 deficiency.

This whole IB vs TOS is not an idealogy war. For me, and at the time, IB cramped my style with what I was doing with options.

just21 · Oct 5, 2006

Quote from ssmegner:

I am not opposed to IB but I ran into all sorts of margining issues with IB when it came to options. Maybe they have changed over the last 18 months. As an example; IB wanted margin for both legs of an iron condor even though you cannot run off both sides at once. Or the one that finally did it for me was this example:

Same underlying, same strike: short stock + long call + short put. IB wanted margin on the short stock position plus margin on the short put. Reality is that this position is flat. TOS looked at the whole position and required no margin. IB crimped my style big time when using synthetics to enter/exit positions.

Maybe with the SEC rule changes all brokers will move to a margin on risk rather than a margin on position.

IB are changing to position based marging from rule based in November according to the comments on suggestion 1046 on their voting system. didn't say which november though!

momoneythansens · Oct 5, 2006

Quote from segv:

I agree with arb, IB is hard to beat.

-segv

Yeah, that clunky platform is hard to beat

I've tried. Even with a baseball bat.

Before the Interactive Brokers evangelists takeover (they are even more extreme than ToS cult members) let's not forget a few cons:

Unable to log in at weekends and forced auto log out every day. 100 market data lines limit. Great. Cancellation fees for option orders. Even better. Unable to properly margin broken wing butterflies etc. Really good for option traders!

FWIW, I have accounts with both IB and ToS.

IV_Trader · Oct 5, 2006

Quote from momoneythansens:

No need to apologize. The new math was top secret and known to only a privileged few...until now.

New math ? Is it also called fuzzy math ? I've heard of it

FullyArticulate · Oct 5, 2006

Quote from just21:

IB are changing to position based marging from rule based in November according to the comments on suggestion 1046 on their voting system. didn't say which november though!

https://cpm.theocc.com/
This makes it sound like CPM is still a pilot program. It'd be great to have equity option margining closer to SPAN.

riskarb · Oct 5, 2006

Quote from just21:

IB are changing to position based marging from rule based in November according to the comments on suggestion 1046 on their voting system. didn't say which november though!

You're serious? Why is 21 and Mo privy to this, but not me?

riskarb · Oct 5, 2006

Quote from Wayne Gibbous:

IB is the only broker ya need!

But will TOS at least give you a reach-around?!

Yeah, that's solid. I am trying out a new one... termed "the stranger" I sit on my hand until it falls asleep and...

riskarb · Oct 5, 2006

Quote from FullyArticulate:

https://cpm.theocc.com/
This makes it sound like CPM is still a pilot program. It'd be great to have equity option margining closer to SPAN.

INCREDIBLE! Say goodbye to JBO valuations. Thanks Art.

riskarb · Oct 5, 2006

Quote from ssmegner:

My experience has been that even on American options they still look at the whole position. If you are assigned then margin comes into play. If you don't have enough in your account the account becomes "Subject to Liquidation". They will step in if they need to but not immediately. In fact they try to phone you up first rather than having some default 24 hour rule. I have been in an insufficient margin situation at TOS for several weeks and they did nothing. The amount was small. Before I dropped Fud-delity they liquidated a position less than 24 hours and for only $5.00 deficiency.

This whole IB vs TOS is not an idealogy war. For me, and at the time, IB cramped my style with what I was doing with options.

American arbs should require a larger req/variation req.