So I profited 820 dollars on a deep ITM options spread and received this email from Tastytrade

poopy said:
What? WHAT? You want TT to code/override the client's account to prohibit DITM stupidity? Your dad should have pulled out.

The last email from Chris was on a loser. They told him to stop on the last one and the OP stated that he would. A legitimate email, from their risk guy on the desk (CHRIS!), and the OP agreed that he would desist.

He did it again and the market rallied enough for the synthetic long call spread to pay out smthg.

You should stop.
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Would you care to meet in person and talk about my family that way, right in front of me?
If you do please send me a PM and we'll arrange a meeting.
 
Drawdown Addict said:
ok, fair enough, but surely if he lost that trade he wouldn't have got any warning.
I understand your point, but why is OP allowed to trade then?
Shouldn't that trade have been blocked in the first place if it was against the broker's policy?

And I mean the question fairly as well. I am just trying to understand why a broker is so conscious about certain trades when they are in profit, almost as if they usually take the other side of losing traders.
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Brokers don’t take the other sides of trades. They facilitate orders and take some settlement and default risk. Brokers will mitigate the settlement and default risk. They don’t care if the trade makes or loses money.

I bet my broker wouldn’t have a problem if I traded this but I could carry the positions naked and so settlement annd default isn’t an issue. If I tried to do it with a million contracts they would because I would be a massive settlement risk.
 
newwurldmn said:
Brokers don’t take the other sides of trades. They facilitate orders and take some settlement and default risk. Brokers will mitigate the settlement and default risk. They don’t care if the trade makes or loses money.

I bet my broker wouldn’t have a problem if I traded this but I could carry the positions naked and so settlement annd default isn’t an issue. If I tried to do it with a million contracts they would because I would be a massive settlement risk.
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It's euro, cash settled. Sure there is pin risk.
 
newwurldmn said:
Brokers don’t take the other sides of trades. They facilitate orders and take some settlement and default risk. Brokers will mitigate the settlement and default risk. They don’t care if the trade makes or loses money.

I bet my broker wouldn’t have a problem if I traded this but I could carry the positions naked and so settlement annd default isn’t an issue. If I tried to do it with a million contracts they would because I would be a massive settlement risk.
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let's try again:

why is OP allowed to trade then?
Shouldn't that trade have been blocked in the first place if it was against the broker's policy?
 
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