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Is it legal for IB to do this? Considering pressing a charge...
- Thread starter Bakinec
- Start date
Youâll have to lose a few more $2000 accounts until you have any clue what youâre doing. Just speaking from experience. But I can tell you that the odds are way against you the way that youâre trading. First off, I wouldnât be trading 10 contracts until you are profitable with one. I understand that they charge a ticket fee and it is cheaper to trade more per trade, thatâs why Iâd recommend TOS per contract rate. Second, the transaction costs will eat you alive. Letâs take an spy at the money trade. Lets say that it is $2 and has a 2 cent spread. Since options trade almost no volume, you usually cannot buy on the bid or sell the ask. You have to wait until the market maker fills you. Plus letâs say $1 commission per contract each side. So you are down $2 with the spread and $2 and commission. If the delta is 50, that means spy has to move 8 cents just to break even. Thatâs fine if itâs a long term trade, but daytrading, itâs nearly impossible to. How are you getting around the daytrading rules anyways?Quote from Gubinec: Thanks, Sandy. I traded options for about 2 months now. I made a $2000 account into a $600 dollar account, but the experience was worth learning from. From now on, I don't hold options for more than a day. I realized that holding options is a loser's game. I now day trade them. If I can make 20 cents on 10 contracts a day on 2-3 trades, that's about $175 bucks net fees. This is not hard to do on index options. Of course, with Ameritrade that's 150 bucks net fees.
Heâs saying that a covered call and a naked put are basically the same thing, but the brokers donât realize this. They tell you to write covered calls because the commissions and margin requirements are more.Quote from Gubinec: Thanks badger, but to be honest I don't have a freaking clue what you were ranting about there. Are you a broker rep or something? What the hell does my age have to do with the commissions they can earn? I know more about options and all the different strategies than most of the "professionals" sitting there taking calls from customers, and that's not empty talk, I've come across that several times when calling Ameritrade. All I ask for is for them to stop thinking like my money ain't good for them just cause I'm not 21 yet. But yeah, I'll consider the TOS strategy.
Look I know what itâs like to be young and think everything should be fair, but the lawyers arenât going to care. Even if it were illegal, what are they going to do? There isnât any money in this. Your best bet is to try to talk to someone else at Ib or find another broker.Quote from Gubinec: This is not about commissions. If I didn't like the commissions they charged, then I wouldn't be right in contesting their policy. Age discrimination is a whole other fruit. I already shot a few e-mails to lawyers, will see what they say or if they even respond.
Yes I did that. When I went to a TOS or Option Planet seminar, the guy there said to do it. You can try just calling them and say you are interested in opening an account and want better rates like you saw they do on their website. Iâm just saying it might be easier to open the account and make 20 trades in a week and then call them. If you do call them before, just donât give your name, in case they write it down or something and then remember you if they say no and you call them again if you open an account at the higher rate and then want it lowered. Maybe thatâs me just being paranoid though. I heard they will also lower the futures rates, but they really want a lot of volume. I have done not that though.Quote from Gubinec: LOL. Sorry about that. I wasn't sure if you were the "customer" or the "rep" when you mentioned telling them to call you back. Yah, TOS charges more than IB and about the same as Ameritrade. To the person who mentioned doing the "better rates" strategy with TOS, are you sure it's gonna work out? Where can I read up on that or you speak from experience and they'll lower their fees to 1.50 if I just mention that other firms have lower fees? THanks.
I have never traded with IB, but I have usually only had great experiences with TOS.
Kid, on private land the owner can kick you out at all time. When you go into a bar, restaurant or wathever, the owner is the boss of the place. They let you in, it's their call.Quote from Gubinec:
IB won't let me trade options because I'm under 21. I can't believe this crap. I have a cash account on Ameritrade and they let me buy options.
Before some wiseass says "then don't...", they STILL have no right to not let me trade options with them as long as I am 18 years of age.
Or am I wrong?
Also, is it true that you have to be at least 21 to open a margin account?
And is it REQUIRED to have a margin account to trade options?
Thanks.
Same with brokers, what they let you do, who they accept is their choice.
I'm so sick of this sue everything mentality. f ricains.
Quote from total_keops:
Kid, on private land the owner can kick you out at all time. When you go into a bar, restaurant or wathever, the owner is the boss of the place. They let you in, it's their call.
Same with brokers, what they let you do, who they accept is their choice.
I'm so sick of this sue everything mentality. f ricains.
And I thought only police can kick you out.
Quote from Sandybestdog:
Youâll have to lose a few more $2000 accounts until you have any clue what youâre doing. Just speaking from experience. But I can tell you that the odds are way against you the way that youâre trading. First off, I wouldnât be trading 10 contracts until you are profitable with one. I understand that they charge a ticket fee and it is cheaper to trade more per trade, thatâs why Iâd recommend TOS per contract rate. Second, the transaction costs will eat you alive. Letâs take an spy at the money trade. Lets say that it is $2 and has a 2 cent spread. Since options trade almost no volume, you usually cannot buy on the bid or sell the ask. You have to wait until the market maker fills you. Plus letâs say $1 commission per contract each side. So you are down $2 with the spread and $2 and commission. If the delta is 50, that means spy has to move 8 cents just to break even. Thatâs fine if itâs a long term trade, but daytrading, itâs nearly impossible to. How are you getting around the daytrading rules anyways?
That's what I thought too until I called Ameritrade for the second time. FIrst rep told me the restrictions apply. Second time another rep told me that I'm not getting around day trading rules. I have a cash account and the rep at Ameritrade told me it's legal to day trade on a cash account; the day trading restrictions apply only to margin accounts.
Regarding day trading options, my idea is not scalping the bid-ask spread on options. I would just kill my account on the first day doing that. I guess sitting there at WTS all day and staring at the SPY going up and down has at least had some benefit. My idea of day trading options is buying when the underlying gets oversold, and selling when overbought.
This is the only site I've found that gives you 5-minute charts on options, check out it out: http://www.optionetics.com/
Most prolly already know the website..... just put in a symbol, then pull up options chain, pick a contract and go to interactive chart.
Quote from Sandybestdog:
Yes I did that. When I went to a TOS or Option Planet seminar, the guy there said to do it. You can try just calling them and say you are interested in opening an account and want better rates like you saw they do on their website. Iâm just saying it might be easier to open the account and make 20 trades in a week and then call them. If you do call them before, just donât give your name, in case they write it down or something and then remember you if they say no and you call them again if you open an account at the higher rate and then want it lowered. Maybe thatâs me just being paranoid though. I heard they will also lower the futures rates, but they really want a lot of volume. I have done not that though.
I have never traded with IB, but I have usually only had great experiences with TOS.
Thanks for the advice, Sandy. I'll definitely try that.
Quote from total_keops:
Kid, on private land the owner can kick you out at all time. When you go into a bar, restaurant or wathever, the owner is the boss of the place. They let you in, it's their call.
Same with brokers, what they let you do, who they accept is their choice.
I'm so sick of this sue everything mentality. f ricains.
I don't know what to say, will see.
Sue everything mentality doesn't apply to me. I'm also sick when I see people suing for trivial things and getting millions out of it.
There's nothing trivial about being legally adult and being refused business because of random age limit policies. If in their opinion I'm old enough to trade stocks, then I'm old enough to trade options too. Nuff said.
And if I do sue, it's not like I'm going to get money anyway. Simply letting me do business with them will suffice by changing their policy or making an exception.