Buyer Beware: Tradestation will flag you as a professional if you don't use gmail, yahoo, etc

"I got flagged recently by TD , I'm a registered rep , I don't know how they found out."

Brokercheck and BTW your current employer give you any inkling an account at another firm would be a problem?
 
ajacobson said:
"I got flagged recently by TD , I'm a registered rep , I don't know how they found out."

Brokercheck and BTW your current employer give you any inkling an account at another firm would be a problem?
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I'm not supposed to have an account outside of my firm , unless I notify them and that qualifies me as professional.
 
Robert Morse said:
Yes, of course. In general, commissions are typically 1/3 of revenues for a clearing broker. But to be fair, they are running a business to make money. When you go to a restaurant if you only order an entree and no drink or dessert, their business will fold. The entree only covers the rent, the rest is where the money is. With clearing and brokerage, it works the same way. Variable fees pay the "rent" but the profits come from multiple source like interest, short stock fees, PFOF etc. If you take that all way, your variable commission would be much higher or they could not cover expenses.
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That's more for futures. I am talking about equities where brokers have lot more venues for making money.

mskl said:
All Brokers (including IB) make a great deal of money outside of commissions. Here are a few ways they do this:

1) They segregate your longs and shorts so that your implied cr/dr rates are significantly worse than they advertise. For example if you typically have many long/short positions then your cr interest will basically always be zero. This is why brokers love traders like me. You can easily have hedged positions that equate your account value on both sides of the market (without much margin). I did a rough calculation last year and IB made about $25K off of me in this regard. This is the same with all brokers. So even if you have say $500 K in average (settled) cash for the month - you may not get any CR interest if you have short positions.

2) On HTB names they make a killing. Imagine a firm that has an aggregate 100K shares in long positions of a HTB name and 75K shares short. The firm would net off 75K of the shares (giving the long holders in most cases nothing) and charging these short positions the full rate. They would only have to truly borrow 25K to net their overall positions. This is a huge money maker (even at IB). For those who don't know, IB offers their long customers 50% of the borrow rate if the position has been purchased without any borrowing. So the reality is at least for me, I rarely get anything for my longs (see point 1) which is why I usually use conversions to get what is really owed to me. This is a big money maker for all firms because there are so many names with high borrow rates that are active.

3) Corporate actions: This is one that many don't talk about. In many cases non electing shareholders in mergers/offerings get screwed if they are unaware and miss deadlines. These missed deadlines can result in significant losses for investors. Many firms will take advantage of this by creating early deadlines for the corporate action. Typically the deadline for a CA may be say 5 pm EST but the broker will likely have an earlier one (say 1 PM). They may say this is to give them some time to process things but the reality is this allows them to see how many shares are "non-electing" and given these shares can result in significant losses for these accounts - they then can borrow them and short them in the market themselves and profit substantially. You will often see some crazy moves that don't make sense in the final few hours of trading prior to a election deadline (this can be why - electing shareholders can get different compensation then ones that don't elect). There is a short tender rule but this doesn't apply to shares that are shorted into the marketplace. In years past brokers use to short the actual tender (without having any shares) - this is illegal. So each broker has a certain percent of "dumb" customers that miss deadlines and they can borrow their shares and short them into the market. Again - another big money maker for these firms.

4) You also have about 60% of all orders (not IB) that are sold by brokers (payment for order flow) where the customer get fleeced a little but each time.


So, yes brokers make good money off of us. No question about it. Times are good for brokers - just look at their stock prices. Expect to see more and more firms lowering fees and I believe the firms that hide behind the "we deliver different goods" and don't lower fees will be left behind in this marketplace.
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As you can see, brokers have plenty of venues other than commissions to make money that they really shouldn't be and really don't need to take the cut from the rebates that we are supposed to receive. They are making plenty to cover their "overhead" and then some. Thomas Peterffy, the owner of IB is one of the top 3 richest people in Connecticut, with a networth of $22 BILLION so they are not really starving there. To use your restaurant analogy, exchange rebates for us is like the coupons that we get from some organization for visiting a restaurant in a particular neighbourhood or for a particular theme for that organization. That's rebates for us from that organization; the restaurant has nothing to do with it and shouldn't be allowed to have any part of it.
 
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tickmagnet said:
I got flagged recently by TD , I'm a registered rep , I don't know how they found out.
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Facebook, twitter, linkedin, credit bureau, the organization you're register with that has a public list of reps, recently psssst off ex-lover or any online info that pops up when you type in your name & city...worst...they hacked into your computer and know everything about you...including having remote access to your webcam. :D

Simply, they may be watching you right now. :sneaky:

wrbtrader
 
tickmagnet said:
I got flagged recently by TD , I'm a registered rep , I don't know how they found out.
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Give their client services a call and find out. I doubt they'd hide it from you. Post it here if you want.

For what it's worth I called TDA and the client services rep said they do not use email. So it probably wasn't that.
 
wrbtrader said:
...or use the one your ISP gave you (most let you create several different email addresses associated with your main account with the ISP).

wrbtrader
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*smacks forehead* Damn, I totally forgot about this option! Yes, pretty much every ISP out there will have the option for you to set-up an e-mail account on their domain. Duh!

wrbtrader gets a V8-flavored cookie!
 
gaussian said:
Give their client services a call and find out. I doubt they'd hide it from you. Post it here if you want.

For what it's worth I called TDA and the client services rep said they do not use email. So it probably wasn't that.
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Yep , brokercheck.com , I was told.
 
Seems that you could open a gmail account or whatever and just have the Tradestation mail forwarded to your preferred address.

I understand that at this point you would prefer to leave Tradestation; just an observation in the event it were to happen again in the future.
 
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