Is it legal for IB to do this? Considering pressing a charge...

Discussion in 'Retail Brokers' started by Kubinec, Jun 5, 2009.

  1. Kubinec

    Kubinec

    IB won't let me trade options because I'm under 21. I can't believe this crap. I have a cash account on Ameritrade and they let me buy options.

    Before some wiseass says "then don't...", they STILL have no right to not let me trade options with them as long as I am 18 years of age.

    Or am I wrong?

    Also, is it true that you have to be at least 21 to open a margin account?
    And is it REQUIRED to have a margin account to trade options?

    Thanks.
     
  2. You mean you want to file a civil suit over age discrimination? I'm no lawyer, but I would have to say you're out of luck if they want to refuse service until you turn 21. But good luck. Maybe you can set a precedent. Claim you're old enough to die for your country but not old enough blow out your account trading options with IB. This is America! :D
     
  3. wjk

    wjk

    I'm not sure if your question refers to the law or their policy, but from their website:

    In the case of an account requesting 'Cash' trading permissions the minimum age requirement is 18 (for joint accounts, both parties must be at leat 18 years of age).

    In the case of an account requesting 'Margin' trading permissions the minimum age requirement is 21 (for joint accounts, the primary account holder, at a minimum must be at least 21 years of age. The secondary joint account owner must be at leaat 18 years of age).


    I'm pretty sure they also have the right to refuse anyone from becoming a client, or cancel a client without reason (as do most brokers).
     
  4. Since Ameritrade lets you trade options, I would imagine IB told you it's a policy of theirs when you were notified?

    If so, I can't imagine it being a legal issue.

    But if you really want to be with IB, could a friend, relative open an account, and give you legal permission to trade it?

    It's been about a hundred years, and things have changed, but my dad did this for me, and I was able to trade whatever he was approved for. (I had to tell him what to fill in when asked "what is your experience with options". He originally wrote "Buy low, and sell too soon".)

    Crazy engineers. I can't believe I remember that.

    Good times.
     
  5. There ya go.

    I sure wish I could remember everything from the 7. Oh well.
     
  6. Kubinec

    Kubinec

    LOL.

    No, I already have an account with Ameritrade. But when I try to register with IB, I select options and it tells me that I am not 21 yet. I can select stocks and it goes through okay. I called CS and they told me that they don't allow under 21ers to trade options.

    I could get my relatives to open it, but I don't want to go through that. I don't want anyone in on my business.

    Ameritrade charges 10$ for each trade + .75c per contract. IB is only .75c per contract.

    It seems like IB only allows trading options on margin. Why the hell would they do that? What's wrong with trading options on a cash account? Bastards.
     
  7. I dealt with the same problem when I turned 18. Except it wasn’t because I wasn’t 21. I applied to about 4 different brokers and they just told me I had no options experience, so they couldn’t approve me. So I asked them how am I supposed to get experience if you won’t give it to me? They told me to write covered calls for a year. I said all I wanted to do was buy options, what is the risk in that? But they didn’t budge. Eventually Think or Swim approved me for all levels. Hurry up an open an account with them before the merger closes. Make a few trades and then call them up and say that you saw on their website that they match other brokers commissions. Tell them that you didn’t see IB or Tradestation listed as an option. They’ll say they can’t match that, but they can do $1.50 per contract, no ticket fee. Trade that way until you’re 21.

    On a separate note, don’t trade options, you’ll lose all your money. At least don’t buy them and blow up your account.
     
  8. Kubinec

    Kubinec

    Thanks, Sandy.

    I traded options for about 2 months now. I made a $2000 account into a $600 dollar account, but the experience was worth learning from.

    From now on, I don't hold options for more than a day. I realized that holding options is a loser's game. I now day trade them.

    If I can make 20 cents on 10 contracts a day on 2-3 trades, that's about $175 bucks net fees. This is not hard to do on index options.

    Of course, with Ameritrade that's 150 bucks net fees.
     
  9. Not a bad idea about think or swim. I'd recommend it to the OP.

    Side note: and I've said this before. This the problem with options firms. They'll approve any clown with no experience with options to write covered calls.

    But when you ask them what the difference is between a covered call and a naked put, they'll look at you like you're f'n insane. I used to explain it to them. Now I'm to the point where I'm an ass and say "give me call when you take the effort to figure it out."

    Not to rant, but the approval process has always been about what earns the broker more commissions. Otherwise synthetics would be an integral part of the series 4.

    (Sorry OP, you touched a nerve)
     
  10. I remember some years back i wanted to open an account (I think it was with scwab) But it was a commodities account. They said I had to open an account with a minimum of 200,000 dollars. I remember the commissions for each contract was 135 dollars per trade. This was right before online trading. man those guys made alot of money back then.

    I also remember wanting to open a margin account a few years later and one brokerage told me i needed a net worth of at least 50,000 dollars.
     
    #10     Jun 5, 2009