Courtesy of TradeStation Securities Inc - conducting unauthorized trading in your acc

Discussion in 'Retail Brokers' started by Kivi, Aug 7, 2008.

  1. Kivi


    I'd like to make everyone on this forum aware of TradeStation Securities practices.

    In May I sold June Heating Oil (HO) calls. The calls ended up expiring in the money and consequently a short positions was assigned on May 27th. On May 28th TradeStation exited the positions without my orders and without prior notification. Upon inquiry, their trade desk manager, Gary Bearson, replied that it is their policy to offset open position prior to the last trading day. It begs the following questions:

    Why bother with the Last Trading Day at all?

    What other trades are you planning in my account?

    What is the basis for an authority of Tradestation Securities trade desk manager to arbitrarily decide when to conduct trades in the customer account?

    Mr. Gary Bearson was alluding in his reply that this is done as courtesy to customers and the customer agreement allows him to conduct such trades. However, he ignored repeated requests to point out which exact clause in the agreement gives him such an authority. Reading the agreement such stipulation can’t be found. Furthermore, I had exact same short positions with two other brokers, but they weren’t exited.
    I filed a complaint with NFA (matter: 2008CINV01423), no response yet. Anyone who is interested, I can forward emails and trade statements relating to the issue.
  2. I'm not defending them (or you) but what would have happened if they didn't exit your positions and if you didn't exit (which they can't be sure you'll do)? Would you be taking delivery?

    IB will definitely liquidate you although they will give you a 1 day warning to close it out.

  3. Not exiting the position was not an option, you missed the point :cool:
  4. I don't doubt it, can you please clarify for us slower folks from Pennsyltuckey? :D Nothing that tradestation does will surprise me, I remember them telling me they offer daytrade futures margins but they're not built into their tradestation software, you get them but can't see your real buying power. Nice job guys.
  5. Don't most futures dealers close you out of non-cash-settled futures a day or two before expiration? Or did you intend on delivering the oil yourself? :)
  6. Does anybody on this forum know the difference between expiration date and last trading day?
  7. Tums


    have you read their liquidation policy?
    did you disagree to it before opening the position?
  8. vikana

    vikana Moderator

    FWIW, my experience is that IB does not give you any warning. At some point I thought i could hold my ZN or ZB to the last trading day. IB liquidated me the day before (Their policy is clear on that) - no phone calls.
  9. ids


    You have a good memory :). The liquidation deadline is 2 hours for ZN and ZB during last few years. It was 3 days when we started to offer it.
  10. Expiration date is the day on which an options or futures contract is no longer valid and, therefore, ceases to exist. Last trading day is the final day that a futures contract may trade or be closed out before delivery of the underlying asset or cash settlement must occur. By the end of the last trading day, the contract holder must be prepared to accept delivery of the commodity, or settle in cash if the position is not closed. Kivi is saying that its positions were closed few days before the last trading day, not the expiration date ... The last trading day is usually scheduled a week or two prior to the actual expiration of the futures contract :D
    #10     Aug 8, 2008