If I have $200,000 in stock options dated out to 2016-2017 and have $80,000 in cash, can the Clearing Firm demand you liquidate all your holdings before they will ACH you the $80,000 in cash before you did a Day Trade Call for $1,000,000 over your current account because their system is so screwed you get a Day Trade Call every day?
Can A Broker Force You To Sell All Your Positions To Get Money?
- Thread starter RabidTrader
- Start date
How many Stock Brokerage Firms did you go through before you found one that actually kept track of how much money your trading? If you have $800,000 in Buying Power and their System screw's up, how many Day Trading Calls will you accept before you dump it and move on?
It's up to us to keep track of our day trading buying power, I thought with age of instant Risk Management and Computers and Internet, Clearing Houses were the Clearing Houses are geared to for Active Traders, who back's up the HFTS guys? They must get a Gazillion Calls because of how fast they change their orders and time it takes to update your Buying Power. That's the excuse, Day Traders are changing their orders so fast to keep up with the Market the Clearing House can't keep up with us!
It's up to us to keep track of our day trading buying power, I thought with age of instant Risk Management and Computers and Internet, Clearing Houses were the Clearing Houses are geared to for Active Traders, who back's up the HFTS guys? They must get a Gazillion Calls because of how fast they change their orders and time it takes to update your Buying Power. That's the excuse, Day Traders are changing their orders so fast to keep up with the Market the Clearing House can't keep up with us!
Hi Victor, I told my friend who does a lower amount of volume to join a small brokerage firm. He emailed me and said "their system keeps screwing up, every day I am getting Day Trade Calls" because they say I am exceeding my buying power on Options and Stocks."
He also said "I don't think the low commission is worth it, I've lost more money because their system crashes, so is it really worth it? His email said "They basically said "We are not geared for hyper traders like you, you need to find a new brokerage."
I got off the phone with him now, they told him "Before we send you the $80,000 you must close your account or make the $250,000 Day Trade Call!" Can they force you to do that? Their system is a piece of shit, I left them a year ago because I was sick of all the BS lies and stories how they were going to fix their system. I watched him trade and gave him your email address, he's 29 years old doing 4000+ trades a month. He's in the wrong firm for his purpose, I've repeatedly asked him to jump ship, why he won't is beyond me.
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It's a Online Brokerage Account, not PM or Prop Shop and they told him he has to sell all his positions before they send him his money. Can they do that or should he ACAT and tell the World what a Piece of Shit they are?
He also said "I don't think the low commission is worth it, I've lost more money because their system crashes, so is it really worth it? His email said "They basically said "We are not geared for hyper traders like you, you need to find a new brokerage."
I got off the phone with him now, they told him "Before we send you the $80,000 you must close your account or make the $250,000 Day Trade Call!" Can they force you to do that? Their system is a piece of shit, I left them a year ago because I was sick of all the BS lies and stories how they were going to fix their system. I watched him trade and gave him your email address, he's 29 years old doing 4000+ trades a month. He's in the wrong firm for his purpose, I've repeatedly asked him to jump ship, why he won't is beyond me.
Edit for less clutter:
"
It's a Online Brokerage Account, not PM or Prop Shop and they told him he has to sell all his positions before they send him his money. Can they do that or should he ACAT and tell the World what a Piece of Shit they are?
rmorse
Sponsor
Interesting question. If you don't make a DT call, they can freeze your account, close your account. I've never heard of a broker that will make you meet a DT call before you close it. I'm not sure if they can do that or not. It's a new one on me. The receiving brokers can reject your positions and only accept cash if they choose.
Just so you know, calculating DT though time and tick is not as easy as you think. Many clearing brokers have problems with this. However, if you can show the DT call is in error, most will drop the call. We have done this many times for clients. It is possible your friend had real calls and does not know how to calculate DT?
Just so you know, calculating DT though time and tick is not as easy as you think. Many clearing brokers have problems with this. However, if you can show the DT call is in error, most will drop the call. We have done this many times for clients. It is possible your friend had real calls and does not know how to calculate DT?
Freezing the account, refusing to allow access to the cash seem's like a question the SEC or FINRA might answer? To force someone who has collected a large size of penny stocks and illiquid items before they send the cash sound's Fishy, real Fishy in my view.
Is that a SEC,FINRA,NASD or who matter? I am not sure if should just ACAT and leave, why would a Clearing House be so inflexible and stupid?
Is that a SEC,FINRA,NASD or who matter? I am not sure if should just ACAT and leave, why would a Clearing House be so inflexible and stupid?
rmorse
Sponsor
It would be a combination of SEC and FINRA rules and that clearing firm's Written Supervisory Procedures that are approved by FINRA. http://www.sec.gov/investor/alerts/daytrading.pdf
rmorse
Sponsor
He should carefully read the margin agreement he signed. They give the clearing firm a lot of room when a client does not comply. Those agreements are VERY one sided.
Hi Victor,
It's not a matter of intentionally violating the Clearing House rules, let's use this example, your starting day trade buying power is $100,000
He make's a gain of $500 and soon he's trading with $102,000 but the Clearing House is not saying he's "over traded by $2,000" $2000/4 or $500.00 Throughout the day the shifts in account equity are pretty wild, the Clearing House is the problem, it's not the clients job if their looking at their Buying Power online only to get a False DT BP number.
Whose fault would that be? I know of Clearing Houses that don't give you Fed Calls for selling your position you sold overnight and day trading that BP, they don't even though we both know the rules on that, that's a easy call, it's a Fed Call.
The best scenario I see is for him to leave that Brokerage, I've said over and over here on Elite that "Cheap Brokerages often charge you more than regular Brokers, the lack of price improvement, inability to seek out "dark pool" orders offering better prices does not help build a case for any active trader to use a firm that only routes to KCG.
It's not a matter of intentionally violating the Clearing House rules, let's use this example, your starting day trade buying power is $100,000
He make's a gain of $500 and soon he's trading with $102,000 but the Clearing House is not saying he's "over traded by $2,000" $2000/4 or $500.00 Throughout the day the shifts in account equity are pretty wild, the Clearing House is the problem, it's not the clients job if their looking at their Buying Power online only to get a False DT BP number.
Whose fault would that be? I know of Clearing Houses that don't give you Fed Calls for selling your position you sold overnight and day trading that BP, they don't even though we both know the rules on that, that's a easy call, it's a Fed Call.
The best scenario I see is for him to leave that Brokerage, I've said over and over here on Elite that "Cheap Brokerages often charge you more than regular Brokers, the lack of price improvement, inability to seek out "dark pool" orders offering better prices does not help build a case for any active trader to use a firm that only routes to KCG.