18 yr old needs option broker

Discussion in 'Retail Brokers' started by ler, Oct 22, 2012.

  1. ler


    I'm looking for a broker where my 18 year old son can trade option spreads. He's been learning & trading options with me for the last two years. He knows his way around defined risk strategies pretty well.

    He opened an account with TDA to use the ToS platform right after his birthday. Unfortunately, although TDA has a promotion through tastytrade to get young people trading, they will not approve his account for spreads. (tier 2 margin) The permission denial was not specific, just "request refused" form letter with "you are welcome to apply again in 90 days". No clue if they think he is too young or the account capital was too low ($8K).

    Any recommendations?

    His trades are in the 1 to 5 lot range so he wants to avoid ticket charges.
  2. 1245


    Assuming your account is more substantial, have you considered using an LLC, create a master account with two sub accounts. One for you and one for him. With the sub accounts, you can track each traders P&L. The LLC at year end will issue you both a K1 for taxes.
  3. yeah u have to use an entity
  4. ler


    Yes, considered LLC when he was 16, but the learning curve was a little steeper than I thought at first. By the time I felt he was ready to trade on his own it was only a few more months to the 18th birthday and legal to execute contracts on his own.

    An LLC has set up and annual reporting overhead I wanted to avoid if possible. Also, some brokers consider you "pro" if you are trading under an LLC. The data feed charges for "pro" can be, ummm, exhilarating.
  5. 1245


    Correct. An LLC would make it an institutional account where you would be charged for data fees by the exchanges. It's a small price to pay to run a trading business. In my opinion, the other advantages of the LLC have value.