Actually I revised my post after I did a bit more research. Yes it turns out CME actually published the advisory on their website FIVE days before the expiration date. https://www.cmegroup.com/notices/clearing/2020/04/Chadv20-160.html. I guess that was their last notice if they actually published the notices THREE times. Stupid idiots didn't do their due diligence and have no idea how financial markets work now try to blame their broker for it and waste our time and judiciary system resources. Unbelievable!!
Lawsuit Again, TD Ameritrade TOS Getting it Again
- Thread starter systematictrader
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Actually I revised my post after I did a bit more research. Yes it turns out CME actually published the advisory on their website FIVE days before the expiration date. https://www.cmegroup.com/notices/clearing/2020/04/Chadv20-160.html. I guess that was their last notice if they actually published the notices THREE times. Stupid idiots didn't do their due diligence and have no idea how financial markets work now try to blame their broker for it and waste our time and judiciary system resources. Unbelievable!!
Here's the problem with that notice that was sent out...
"Support for zero or negative futures and/or strike prices is standard throughout CME systems. All file and message formats support such prices, and we have a variety of products which have long behaved in this manner, for example NYMEX BY (WTI-Brent Bullet) futures contracts and NYMEX BV options on those futures contracts."
Now, contrast that bit with the bolded bit I posted above in the previous post, where they specifically stated that negative prices would NOT be supported.
They did not give clearing firms any time to adapt. The CME shit the bed on this. THAT is what they should be sued for. And as I have mentioned many times in other posts...This is all going on while they purported to have low-limit breakers on CL the major energy contracts, at $0.01. They removed them, obviously, but still listed those low-breakers when the crash happened.
Something funny went on over there on LaSalle St. that day I can tell you.
I re-read the PDF document that you included. To me what CME was trying to say is their file and message system has been programmed to display negative prices if they appear but the negative prices themselves will not be listed and supported for trading.
"Negative strike prices will NOT be listed in any of these energy markets until this model change is made per the plan above and may not occur even if the modelling changes do happen.".
And even though they were trying to change into a different pricing model to price the contracts like a spread like in options but it stated it "MAY" switch to this model which to me it means they also may not.
"CME Clearing MAY switch its pricing and margining options models from the existing models to the Bachelier model, currently utilized in numerous spread options products where negative underlying prices and strike levels are a regular occurrence."
And furthermore even if they were able to successfully change to the different pricing and margining model which supports negative pricing to make the contracts tradeable, the negative prices themselves still may not occur.
And finally CME did leave it to the individual clearing firms to decide what to do in this event with the following:
"The primary goal of this advisory is to let the market know that CME Clearing is ready to handle the situation of negative underlying prices in major energy contracts and we want to give all of our clearing firms, customers, and partners a view into what the CME Clearing plan is so that each of our partners can do their own respective planning for this potential situation."
To me, CME was getting their a$$ well covered while still looking like they were doing something. Yeah our file and messaging system is programmed to display negative prices (which to us traders means s*** I agree) and we do have a tested plan to price the contracts differently to accommodate the negative prices to make them possibly tradable although at the end they may still not be tradable and we are telling all of you now so you can get your s*** together for what could be about to happen. Good luck!
Given that this notice was sent out in April 8, 2020 and published on their website, all individual traders should've been aware of this despite what the brokers were doing. You saw the notice, you understood what was about to happen. You are a retail trader just like everyone else. And if they didn't understand it, they could've had ample time to contact TD Ameritrade themselves or CME to find out what's going to happen instead of just sitting on their hands and now blame on their broker for not telling them. I mean trading is not just sitting on your a$$ all day, looking at a few charts and click a few buttons while watching Netflix at the same time. It's a lot of research, reading, more research and constantly being aware of what's going on.
All in all, I think this is still an issue of ignorance and lack of knowledge, albeit unintentional. Even the fact that they are choosing to listen to this lawyer to launch this useless class-action lawsuit is ignorance on their part. The law firm is a one-woman show who's represented a few politicians and has appeared in front of the Supreme Court and they think they've hired the best lawyer in town.
She's not going to go after the CME because she knows she won't win there. CME's got their a$$ all covered so she decided to go after TD thinking TD's got some dough and she might be able to get something. They've already been directed to arbitration but the lawyer has rejected arbitration and wants to go to court. They are not going to win. The lawyer just wants their money. The traders are going to just pay a hefty lawyer fee to find that out.
Negative price means no market? get your self some education. Market functioned well and fine in negative prices, 100s of thousands of contracts exchanged hands, clearly your new to trading.
Issue was with all brokers, lol, no it was not, many brokers were fine and people traded it just like any other product any other time, price going from 30 to 20 is same as -20 to -30 if your brokers platform has been prepared to enter that minus sign
traders do not interact with exchanges, a broker gotta be there unless you your self the broker. once again get yourself some education on the market and prices being negative because a market did exist when your idiot mind is saying oh "there was no market" you should stop typing before you get laughed at
I re-read the PDF document that you included. To me what CME was trying to say is their file and message system has been programmed to display negative prices if they appear but the negative prices themselves will not be listed and supported for trading.
"Negative strike prices will NOT be listed in any of these energy markets until this model change is made per the plan above and may not occur even if the modelling changes do happen.".
And even though they were trying to change into a different pricing model to price the contracts like a spread like in options but it stated it "MAY" switch to this model which to me it means they also may not.
"CME Clearing MAY switch its pricing and margining options models from the existing models to the Bachelier model, currently utilized in numerous spread options products where negative underlying prices and strike levels are a regular occurrence."
And furthermore even if they were able to successfully change to the different pricing and margining model which supports negative pricing to make the contracts tradeable, the negative prices themselves still may not occur.
And finally CME did leave it to the individual clearing firms to decide what to do in this event with the following:
"The primary goal of this advisory is to let the market know that CME Clearing is ready to handle the situation of negative underlying prices in major energy contracts and we want to give all of our clearing firms, customers, and partners a view into what the CME Clearing plan is so that each of our partners can do their own respective planning for this potential situation."
To me, CME was getting their a$$ well covered while still looking like they were doing something. Yeah our file and messaging system is programmed to display negative prices (which to us traders means s*** I agree) and we do have a tested plan to price the contracts differently to accommodate the negative prices to make them possibly tradable although at the end they may still not be tradable and we are telling all of you now so you can get your s*** together for what could be about to happen. Good luck!
Given that this notice was sent out in April 8, 2020 and published on their website, all individual traders should've been aware of this despite what the brokers were doing. You saw the notice, you understood what was about to happen. You are a retail trader just like everyone else. And if they didn't understand it, they could've had ample time to contact TD Ameritrade themselves or CME to find out what's going to happen instead of just sitting on their hands and now blame on their broker for not telling them. I mean trading is not just sitting on your a$$ all day, looking at a few charts and click a few buttons while watching Netflix at the same time. It's a lot of research, reading, more research and constantly being aware of what's going on.
All in all, I think this is still an issue of ignorance and lack of knowledge, albeit unintentional. Even the fact that they are choosing to listen to this lawyer to launch this useless class-action lawsuit is ignorance on their part. The law firm is a one-woman show who's represented a few politicians and has appeared in front of the Supreme Court and they think they've hired the best lawyer in town.
and dont get too emotional like someone cursed out your mother. Your starting to sound like the cynic whos constantly losing and only enjoys other lose. Its ok, losing is part of the game, and experience is never a waste, calm your self down snappy
I agree with you on most points you bring up good points. CME did publish the advisory. and they have had negative prices in natural gas before suggesting its been seen, probably not to the magnitude of crude oil since its a more popular product. The thing CME can always argue itself out of it by saying it is not the first time this happens, it is the brokers than need to have their platforms ready. Which is in a sense true, and also your point true is they did not give them enough time but CME can point to the past and say look, negative prices isn't new in futures and thus the brokers defense against them would be difficult. Now the brokers themselves were caught similar to the traders not expecting it, whether they knew or didn't can be the same on whether the broker or trader read the advisory but ultimately and truthfully when does any one of most traders interact or deal with CME? i mean come on how many of us traders here read advisories published from CME regularly? Where as the broker needs to because here it is their platform that needs to support the changes made, such as prices going negative, or a new product added, or whatever. Good points though but taking down or suing the exchange would be in my opinion very difficult considering the advisory and the fact it isn't the first time products go negative. Meanwhile the brokers such as interactive brokers who have reimbursed clients because the platform didn't support it show you they knew they at fault and they assumed responsibility. Mistakes happen all the time its normal, but they cost money, and issues arise when responsible p[arty doesn't want to assume such responsibility. Great info @Overnight
Piece of shit don't post if you can't speak English!! It's "you're" not "your". "Your" means something is yours. Clearly you have nothing, least of it your (this is where you use "your") brain. Anyway that last post wasn't for you. I was talking to @Overnight. You clearly have no understanding of how to do research for your trading and how to take care of your trading in special circumstances and instead just rely on others to hold your hand and spoon-feed you but yet are too cheap to pay for the handholding. The CME advisory notices clearly stated that even with the new pricing models that would support negative prices, negative strike prices might still not appear and the contracts might still not be tradeable. And the individual clearing firms were supposed to make their own arrangements so first of all you didn't read the advisories and instead would rely on your broker to let you know what's going on and second even if you read it, you still would not have understood that you were supposed to contact your broker or the exchange to find out more how the trading was going to be done and specifically on the TOS platform. And now you blame on others. Pathetic and sad!
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The fact that other retail traders can read the advisories and you can't clearly shows your complete incompetence and nothing else. And it's "Whereas" not "Where as". Good luck with your lawsuit. All TD Ameritrade needs to show is all the other traders were able to read advisory and understand what it meant and were able to take care of their trading endeavours appropriately and you guys couldn't then obviously the problem was with you and not with them. And your lawsuit will be tossed out! Have fun paying your lawyer fee on top of your losses.
I am done with you. With attitudes like yours, your trading days are numbered.
coming from the guy who thought there isnt a market, lol
Ahhhh, are you on your period? your so sensitive that even grammar shortcuts bother you? hahahahaha