"1. Will there be some type of fee credit to my account? While this was our original intention, the debit situation with FC Stone has taken this option off the table. The figure on your account statement today is the FINAL figure for a debit call. 2. How, when and where should I address my debit call? All debits should be paid directly to FC Stone in the most timely manner possible. Questions on debit calls should be directed to FC Stone at the number on your notice. If you have already paid your debit call then please disregard. 3. How do I pay a debit inside of an IRA account? We have not been advised how to answer this question and refer you to FC Stone." The ol' passing-the-buck routine. Guy is laughing his ass off way all the way to the bank on this. His heartfelt video looked as sincere as Kavanaugh. Now Kavanaugh is all happy and smiles, because he has secured a federal salary that can never be taken away. Like this guy. And someone above mentioned all the "clients" he spoke about in that video, about how he wouldn't be able to go sailing and fishing...Yeah, I noticed it also. There was something off about that. This guy is going to vanish into the mists of history, and will start another firm in the intermediate future. He's gonna' think...Hey, other hedge fund managers lose clients' life savings and never have to pay, and get more clients later on...Why can't I?
Sorry that you have to go thru this but what an institutional investor would have done off the bat would first review his audited financial statements and his annual returns. Then scrutinize the deviations in returns etc. Also many other due dillagence steps but that’s another conversation.
So the RIA will buy 1000 contracts for an average price of 1.523. He has five clients and prorates the quantities across the accounts but they all get the same price. It’s still your account and you own the position but it makes the executions fair. Otherwise he can give the most favorable executions to his most favored clients.
To be honest, I'm not sure if this is even possible (but its not like I know anything). I would imagine that if some guy is trading my account, each fill has to already match some account, either mine or someone else's. How can you prorate a fill across multiple accounts when the trade has already happened in a clients account? Its not like he is working from a master account and then transfers these fills at will to the sub accounts, trying to make it all roughly equal.
Broker reports that the order is filled. Manager then directs the broker to allocate the trades. Protocol is to provide the allocation after the order is filled
No the fill doesn't have to match some account up front. It is exactly like trading from a master account and then transferring the fills on some formula to the sub accounts.
There have been a number of posts in this thread that I think confuse what is legal and what most IRA custodians will permit. I had spent quite a bit of time researching this a while ago, but you should of course check with a lawyer. If you do, I'd be really interested to hear how much of what I say below is correct. An IRA can legally pursue pretty much any investment strategy, including selling naked equity options, shorting stock, and buying on margin, although borrowing money will result in gains being taxable. Most IRA custodians will not permit this, but it is legal. Tastyworks recently announced they would allow selling naked calls. An IRA is an independent legal entity. You should look over your paperwork to see if you ever signed a personal guarantee. If you didn't, they can't only make a claim against the IRA (which has no funds), not you personally. If you did make a personal guarantee you may have extra problems on top of the debit balance. A personal guarantee is a prohibited transaction. As soon as it is made, the IRA ceases to be tax exempt, and any balance is taxable income. So in theory you would owe income tax on the balance at that moment and then capital gains tax from profits in the following years. Again, I'd be really interested to hear if you get a lawyer's take on this. There have been a couple threads on here about people blowing up IRAs, but I don't think anyone followed up on what the final tax consequences were.
Lol so many red flags. Total risk of ruin, man did he have to sell a shit load of naked otm contracts to make those returns. How ignorant can people be.
Yeah it makes no sense, but he seemed ignorant regarding the risks in that interview. And the reporter just went along with it instead of asking pointed questions regarding those returns and the strategy. It looks like he believed his own bullshit and thought he was untouchable. Look at LTCM and they were Nobel prize winners, even wrote options pricing model.
They could probably pierce the wall since it looks like criminal neglect. He should have known better especially a so called expert award winning author with over 20 years of experience.