Broker silently changed the conditions...

Discussion in 'Retail Brokers' started by earth_imperator, May 18, 2023.

  1. zdreg

    zdreg

    If you enter a limit order to sell the broker knows with 100%certainty whether you have enough cash in the account. Premium received is cash like any other
    cash in your account.
    +It has been correctly pointed out by Van.. that the cash must be equal to the strike price in a cash account.
     
    Last edited: May 20, 2023
    #101     May 19, 2023
    earth_imperator likes this.
  2. zdreg

    zdreg

    Tasty trade is correct.
     
    #102     May 19, 2023
  3. zdreg

    zdreg

    Selling the option and receiving premium is settled simultaneously.
     
    #103     May 19, 2023
    earth_imperator likes this.
  4. zdreg

    zdreg

    Thanks for the update. :D
     
    #104     May 20, 2023
  5. TheDawn

    TheDawn

    Can you show where does TastyTrade show that it only requires strike - premium for cash-secured puts?
     
    #105     May 20, 2023
  6. zdreg

    zdreg

    Last edited: May 20, 2023
    #106     May 20, 2023
  7. TheDawn

    TheDawn

    SELLING AN OUTRIGHT PUT REQUIRES THE TOTAL CASH-SECURED AMOUNT

    The buying power requirement for a cash-secured put is the (strike price) × (number of contracts) × (option multiplier). The premium received from the sale of the put can be applied to the initial requirement.

    EXAMPLE OF SELLING A CASH-SECURED PUT
    Sell to open 6 Mar 11 puts at $0.75 = $0.75 x 6 qty x 100 = $450 credit received

    6 x 11 x 100 = $6,600 cash-secured amount

    When you are entering a trade, has the premium been received?? No. It states very clearly in the very first sentence: To sell the put it requires TOTAL CASH-SECURED AMOUNT which is NOT offset by any premiums. It's not our problem that OP can't read. If English is his second language, then he should take more ESL courses.

    You need to learn to read as well to troll better.
     
    Last edited: May 20, 2023
    #107     May 20, 2023
  8. That's the question. Normally it should be the same with all brokers b/c the risk is clearly defined; there is not any risk for the brokers b/c of the cash collateral in full (creditrcvd + cash = strike, and with such a CashSecuredPut there is not any risk that is > strike).

    Yes, also at TradeStation.

    Something suddenly changed on Thursday b/c it did not let me open another such CashSecuredPut position, but which it did all the time in the past even up to some minutes ago in a previous trade. There was enough settled cash available which combined with the credit gives a value that is more than the strike.
     
    Last edited: May 20, 2023
    #109     May 20, 2023
  9. ETJ

    ETJ

    TD making a change would end up with more people griping. Possibility the OP is living under a release restriction which would have affected the account(s) and not applied firm-wide.
     
    #110     May 20, 2023