TD Ameritrade and Think or Swim Option Market Maker Scam

update: Last week I switched to swabb...much better fills. They may not have a high tech trading platform but it beats bad fill any day. TOS is a joke stay away . I think they have a deal with the market markets to give bad fills and split the profits.

As an experiment I had a friend place a market order on swabb and he got filled much better than my market order on TOS. I controlled for all other variables. The two trades were seconds apart, identical securities, identical strikes, etc.

TOS is joke.. you been warned. they will steal ur money
 
tradelosses said:
update: Last week I switched to swabb...much better fills. They may not have a high tech trading platform but it beats bad fill any day. TOS is a joke stay away . I think they have a deal with the market markets to give bad fills and split the profits.

As an experiment I had a friend place a market order on swabb and he got filled much better than my market order on TOS. I controlled for all other variables. The two trades were seconds apart, identical securities, identical strikes, etc.

TOS is joke.. you been warned. they will steal ur money
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Your not getting bad fills, their doing exactly as you ask. Your example with schwabb is an example of someone paying for your order flow to have first access to your trade and giving you a price improvement to beat the queue of the NBBO.If this is happening a lot you'd probably do better with limit orders and seeing if they take the bait.

Example :
NNBO quote,

Bid: 2.00$
Ask: 3.00$

If you submit a market buy order and receive it at, lets say at 2.95$....(since their paying Schwabb to have access to your order first and legally are required to give you a better price then the NNBO which can be a fraction of a cent with stocks anyways), whose to say if you would have put a limit out there at 2.80 that they wouldn't take the trade still?

Their taking your trade and leaning on the NNBO for an exit and perhaps you'd be better off taking some of their profit margin away by putting a limit order out there and perhaps they'll still like the trade.

Perhaps they are a better fit for yourself if you prefer possibilities for a better market fill since they could have more/larger clients paying for your order. TOS was just executing your order as you asked it to be. You could also try using your own limit orders where you'd be happier with the fill and beat them both.
 
With Shwabb I can buy at market and always get good fills, which means faster trading and more profit ; with TOS I had to constantly adjust the price to avoid getting ripped off...the irony is that Swabb, which is not marketed to traders but for retirees, is better than the company that is
 
They they are def. giving bad fills. Now I know why. Swabb will fill in increments of one cent. TOS is in increments of 5 cents of 10 unless the option is below $2. I know this because I tested it. TOS will show something like BID 3.3 ASK 3.9 and when placing the order it will always get executed in multiple of 10 cents such as 3.5 whereas with Swabb it will be 3.46 or less. I'm surprised no one else has noticed this. People just assume that certain options must always trade in multiples of 5 or 10 cents...lol. Scam .

Thinking about creating a website about how much TOS, Ameritrade, and Tasty Trade sucks. If anyone wants to PM or post their complaints, I'l compile them for the site.

Also the margin requirements on TOS are so outrageously high unless you trade futures. You sell a single OTM call and like all your buying power goes away .
 
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tradelosses said:
They they are def. giving bad fills. Now I know why. Swabb will fill in increments of one cent. TOS is in increments of 5 cents of 10 unless the option is below $2. I know this because I tested it. TOS will show something like BID 3.3 ASK 3.9 and when placing the order it will always get executed in multiple of 10 cents such as 3.5 whereas with Swabb it will be 3.46 or less. I'm surprised no one else has noticed this. People just assume that certain options must always trade in multiples of 5 or 10 cents...lol. Scam .

Thinking about creating a website about how much TOS, Ameritrade, and Tasty Trade sucks. If anyone wants to PM or post their complaints, I'l compile them for the site.

Also the margin requirements on TOS are so outrageously high unless you trade futures. You sell a single OTM call and like all your buying power goes away .
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You are very confused. I hope you keep your day job. TOS is "not" filling you anywhere, they sell your order flow. Your order is going to the exchange and all exchanges can improve the price in penny increments regardless of what your order entry on your platform allows you to do. Charles Schwab sells most of their flow to UBS for execution. This means UBS gets an opportunity to improve the market that is posted on an exchange. If the market is 3.30 bid at 3.90 offer, Schwab shows the order to UBS, UBS says I'll sell that at 3.82 giving you .08 improvement on the best offer which lets say is the CBOE. TOS does this too although they sell their flow to multiple vendors. Vendors pay for this privilege. There is no conspiracy so relax and maybe read a book or two and learn how this business works.
 
tradelosses said:
They they are def. giving bad fills. Now I know why. Swabb will fill in increments of one cent. TOS is in increments of 5 cents of 10 unless the option is below $2. I know this because I tested it. TOS will show something like BID 3.3 ASK 3.9 and when placing the order it will always get executed in multiple of 10 cents such as 3.5 whereas with Swabb it will be 3.46 or less. I'm surprised no one else has noticed this. People just assume that certain options must always trade in multiples of 5 or 10 cents...lol. Scam .

Thinking about creating a website about how much TOS, Ameritrade, and Tasty Trade sucks. If anyone wants to PM or post their complaints, I'l compile them for the site.

Also the margin requirements on TOS are so outrageously high unless you trade futures. You sell a single OTM call and like all your buying power goes away .
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Actually I think it's something else that is happening. Schwab and TOS don't get to choose which options are penny priced and which aren't.

I think what's happening is you trade your first contract (where the order is sold and executed). The algos see the edge and improve to try to goad you into another order.

Mav, interesting example as Schwab used to sell their orderflow to UBS.
 
Maverick74 said:
You are very confused. I hope you keep your day job. TOS is "not" filling you anywhere, they sell your order flow. Your order is going to the exchange and all exchanges can improve the price in penny increments regardless of what your order entry on your platform allows you to do. Charles Schwab sells most of their flow to UBS for execution. This means UBS gets an opportunity to improve the market that is posted on an exchange. If the market is 3.30 bid at 3.90 offer, Schwab shows the order to UBS, UBS says I'll sell that at 3.82 giving you .08 improvement on the best offer which lets say is the CBOE. TOS does this too although they sell their flow to multiple vendors. Vendors pay for this privilege. There is no conspiracy so relax and maybe read a book or two and learn how this business works.
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A very good explanation Mav, but I am starting to wonder if it matters who a broker sells their order flow to and also the effect of adding/taking liquidity payments have on fills.

I have generally traded the SPX and VIX, which are single listed, but recently have been trading some equities extensively. Say the market is fairly wide, say 2 - 3. I put an offer in at 2.95, with the order on the CBOE. I see quite often that an order will trade at a penny better, 2.94. Usually on the BATS exchange. Now if I put a limit order in to buy at 2.60, I would be filled. If I put a market order in and direct it to the CBOE, their auction system will fill me at 2.60 (even though the are quoting at 3). So the order could be filled at a better price depending on where it is routed. Instead it looks like the order "buyer" is simply crossing it on the BATS at high price. Now the broker will be paid for the order flow and may also receive a bonus from the exchange for the type of order as well.

I'm not saying there is a conspiracy here, just observing that who gets the order might effect the price. Any thoughts on this?
 
FSU said:
A very good explanation Mav, but I am starting to wonder if it matters who a broker sells their order flow to and also the effect of adding/taking liquidity payments have on fills.

I have generally traded the SPX and VIX, which are single listed, but recently have been trading some equities extensively. Say the market is fairly wide, say 2 - 3. I put an offer in at 2.95, with the order on the CBOE. I see quite often that an order will trade at a penny better, 2.94. Usually on the BATS exchange. Now if I put a limit order in to buy at 2.60, I would be filled. If I put a market order in and direct it to the CBOE, their auction system will fill me at 2.60 (even though the are quoting at 3). So the order could be filled at a better price depending on where it is routed. Instead it looks like the order "buyer" is simply crossing it on the BATS at high price. Now the broker will be paid for the order flow and may also receive a bonus from the exchange for the type of order as well.

I'm not saying there is a conspiracy here, just observing that who gets the order might effect the price. Any thoughts on this?
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Yes, here is what happens. Market is 2 bid at 3. Citadel has a theo value of 2.50 on this option (which doesn't always have to be the mid price). When you put in a bid above theo, Citadel and firms like it will automatically take it out. You're bidding over model price. They are not going to let you show the bid because its over fair value and the entire market will jump at it. Now in really illiquid stuff, which this option would qualify if the spread is that wide, their theos will be wider and they will try to get you to pay up. If you leave the order on the book all day into the close, I would bet their algo fills it at 2:59 central time.
 
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