Interactive brokers customer rep pissed?

[Cornerstoned]

I recently asked an ib support staffer about how they exercised options and she got really pissy at me. Told me that I should have already known and then closed the chat on me... Wtf? Got me thinking, what is she pissed about? Is there any legal ramifications for not putting "educated about options trading" in their TOS?

transcript below (names removed)

Customer Rep: Hello, this is 'Customer Rep'. How may I help you?
Me: hello
Me: i would like to know the process in which ib will exercise an put option
Me: i have an put option on APPS purchased today and i wanted to know the process if i dont hold the security itself
Customer Rep: you can exercise it on your TWS by going to Trade -> option exercise
Me: yes i see, how would it be exercised since i dont hold the security itself
Customer Rep: that is something we expect you know before you purchase the put options.
Me: what do you mean
Customer Rep: we expect you to know what to happen when you exercise an put option when you do not have the underlying shares
Me: well i read the account agreement form and there was nothing about this
Customer Rep: we are an online brokerage firm, and we expect customer to know the option trading rules before starting trade options with us.
Customer Rep: in your application, you put you have 4 years of options trading with more than 100 trades per year.
Me: i do know the rules but i dont know your rules
Me: my previous broker would for example purchase or had an stock of the underlying
Customer Rep: here, at IB, when you exercise your put options, you will have short stock positions if you do not have the underlying shares.
Me: hummm
Me: the short stock positions would be at the strike correct?
Customer Rep: yes, the put strike price, what is what is called a put option contract.
Customer Rep: Thank you for contacting IB Customer Service. Please feel free to contact us if you have any other questions.

 

[MoreLeverage]

Customer Rep: we are an online brokerage firm, and we expect customer to know the option trading rules before starting trade options with us.
Customer Rep: in your application, you put you have 4 years of options trading with more than 100 trades per year.

Edit: So in those 400 trades, did you never exercise a naked put option?

 

[OptionGuru]

So in those 400 trades, did you never have a naked short option exercised against you?

I think it's a long put option.

Me: i have an put option on APPS purchased today and i wanted to know the process if i dont hold the security itself

 

[Cornerstoned]

Edit: So in those 400 trades, did you never exercise a naked put option?

are you saying they were mad because they thought one of their customers didn't know what they were doing?

 

[FSU]

Customer Rep seems to be having a bad day, certainly could have been nicer. The question she didn't answer is how would IB handle it if you didn't have the money to cover the short position? Would they allow the exercise and then immediately buy you in?

 

[zdreg]

my previous broker would for example purchase or had an stock of the underlying

there are gaps in your knowledge. a broker would only do a buy-in if he didn't have shares to deliver. if you exercise and he had shares available to short your position run would show you as being short. then it is up to you to close your position by buying shares that day or some other day. however depending on the broker the time for a FORCED buy because of the unavailability of stock to short could the same day or up to 3days later. this is basic.
hummm is a childish response.
the customer rep gave you a professional response. you have had a soft life if you deem her response to be pissy.

 

[Cornerstoned]

there are gaps in your knowledge. a broker would only do a buy-in if he didn't have shares to deliver. if you exercise and he had shares available to short your position run would show you as being short. then it is up to you to close your position by buying shares that day or some other day. depending on the broker the time for a forced buy in could the same day or up to 3days later. this is basic.
hummm is a childish response.
the customer rep gave you a professional response. you have had a soft life if you deem her response to be pissy.

I am and continue to be an asshole esp. when it comes to money, Was not offended but merely curious

 

[d08]

I'd complain about her, I've experienced something like that - superficial and dismissive attitude without focusing on the problem, it really depends who you land on there.

 

[stevegee58]

In the UK "pissed" means "drunk"

 

[Xela]

I'd complain about her

I agree that it's pretty unsatisfactory, and I'd also complain.

I wouldn't realistically expect it to achieve much, though.

You were uncluky, also, and it's worth trying again a couple of minutes later, because you can quite often get someone a little more cooperative.

What she said (starting with the words "We expect you to know") is actually true: they do expect you to know. They're a broker with many other advantages, but "expecting their clients to know ..." is indeed one of their weaknesses. They give very little customer support in circumstances like these that relate to customers' existing knowledge rather than to technical details of their services (and they're not always so hot at those, either), and they should say so, a little more openly, before people open accounts. I'd adopt that line, in my complaint, saying something along the lines of "You really should tell people up-front that you're unwilling to answer such questions, since that's so clearly your policy". (And it may also even be worth trying to draw a manager's attention to this thread.)

But that's very much the way IB is. Not trying to sound unsympathetic, which I'm not, but we use them for all their undoubted other advantages, really, knowing that they're sometimes pretty much like this.