Broker silently changed the conditions...

zdreg · May 19, 2023

vanzandt said:
No US Brokerage credits the account with the premium, to be applied against the requirement of 100% cash to cover the purchase of the stock at the strike sold, until the following day. That's an SEC rule, not an in-house policy

You are correct as to the timing , . It doesn't change the fact that TDA required more cash in the account than other brokers on trade date.

TheDawn · May 19, 2023

TDA does NOT. I just showed in my previous post that IB requires EXACTLY the same amount of cash requirement. In fact ALL BROKERS require the same cash requirement for cashsecured puts because that's what a cashsecured put is. No broker would require less.

zdreg · May 19, 2023

TheDawn said:
. No broker would require less.

yes, but a broker can require more which is the point the OP has successfully made.
Your circled words has been repeated numerous times and no one had disputed them.
The op correctly has pointed out that the premium received reduces the existing cash in the account needed to support an unsecured call position. Existing cash +premium received, which is cash, must equal the strike price. That is industry practice which OP said TDA exceeds on trade date.

earth_imperator · May 19, 2023

@TheDawn, stop posting a wrong ShortPut type: ypu are posting the requirements for a Naked Short Put, but the discussion is about CashSecuredPut.

earth_imperator · May 19, 2023

@zdreg, I thank you for your neutral objectivity.

But as you already might have discovered yourself, these two types, @TheDawn and @vanzandt, are not that honest as they use lies and wrong information in their argumentation... They don't take it so exactly with the truth. They will spam the thread with their lies: ie. attempting to overtake the discussion by trash quantity over quality...
I know the tactics of such types very well from other discussions...

zdreg · May 19, 2023

TheDawn said:
The premium is SUPPOSED TO BE ignored by the broker because the broker doesn't know beforehand how much the premium you are going to sell the put for.[/QUOT
It doesn't matter. Lets assume that you receive zero. The requirement upon filling is the strike price. When you enter the order the system in an extreme case could detect whether you have enough cash to support a zero premium. The moment the order is filled the system updates for premium received.

zdreg · May 19, 2023

earth_imperator said:
@zdreg, I thank you for your neutral objectivity.

But as you already might have discovered yourself, these two types, @TheDawn and @vanzandt, are not that honest as they use lies and wrong information in their argumentation... They don't take it so exactly with the truth. They will spam the thread with their lies: ie. attempting to overtake the discussion by trash quantity over quality...
I know the tactics of such types very well from other discussions...

I deal in reality.

People post wrong information. It happens to even the most knowledgeable because they can not know everything or their perception of reality is not 100%.
My post above describes the situation as it is. Objective people will then accept the reality.Those with a stake in an incorrect reality will deny the truth.
It is not uncommon.

TheDawn · May 19, 2023

zdreg said:
yes, but a broker can require more which is the point the OP has successfully made.

But the broker didn't. It required exactly the amount needed to cover its risk. You are now just trolling because you just don't want to admit that you are wrong even when people have pointed it out to you to your face. This is what you do in every single thread.

TheDawn · May 19, 2023

zdreg said:
Existing cash +premium received, which is cash, must equal the strike price. That is industry practice which OP said TDA exceeds on trade date.

OP is wrong.

zdreg said:
The op correctly has pointed out that the premium received reduces the existing cash in the account needed to support an unsecured call position.

Yes but the premium is only received AFTER the trade has settled. The cash requirement is BEFORE the trade happens. Before the trade happened, only the strike price is known so the broker needs to make sure that you have enough cash in the account to support the maximum possible risk on the put which is the entire strike price regardless of the premium. It's not an issue of broker requiring more; it's a matter of the broker covering its a$$.

ondafringe · May 19, 2023

TheDawn said:
That is NOT correct. For a cash account, the requirement is ALWAYS the ENTIRE strike price and NOT strike price - premium.

And this is the policy not just by whatever broker that the idiot has his account with. It's been the policy with all brokers since the beginning of time.

In fact ALL BROKERS require the same cash requirement for cashsecured puts because that's what a cashsecured put is. No broker would require less.

How can that be correct because Tasty Trade allows you to apply the premium to the initial margin requirement -- strike minus premium -- so must be broker-dependent. Right?

If so, then the OP's example of strike: 4 and premium 3.80 would mean that, at Tasty Trade, he would, in fact, only need $20 in his cash account to execute that trade. Right?

So OP is complaining that TDA now requires (or always has required?) cash equal to the full strike to execute his trades. Seems to be a legit complaint, but since it's broker's prerogative, and since OP needs access to TDA's free API, he'll just have to deal with it.