Not for Option Traders
Holy nightmare. It seems like common sense that a brokerage firm that handles options would actually have some educated brokers that were helpful. I was truly surprised years ago when I was actually educating the broker at the trade desk about capital requirement for a spread trade. I only hope they've improved, but have no interest in finding out based on my experience and what I continue to hear from other traders.
Here's a very specific problem: Ridiculous capital requirements to put together defined risk spread trades. What do I mean? Well, how about adding a short call spread to a short put spread (a.k.a. iron condor), and being required to withhold additional capital in the trade...even though the risk doesn't change a PENNY.
If you don't get what I mean because you don't trade option spreads, it's as simple as this: a stock CANNOT close for the day (options expiration day) at TWO different prices, and that is what they are telling you when they require additional capital to place the aforementioned trade.
I've also heard nightmares about restrictions in IRA's, and reasoning being given that is flat out false...such as "you can only buy calls/puts and write covered calls in an IRA" (wrong) ~or~ "it's an SEC rule...". Really? Then why can I trade spreads in my IRA with dozens of other brokers in the US? For Canadians, it is a different deal with RSP regulations, but I don't live there.
They would serve their clients better if they stuck to what they're good at... cheap stock trades for people that trade stock.
This review is the subjective opinion of an Investimonials member and not of Investimonials LLC
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