I am planning on moving my account to Spearmint Rhino, but I am concerned that I will be kicked out if I fail to pay my tab from the VIP room. You could live 1000 lifetimes and you'll fail to understand it. There is a cost-disadvantage in the DITM call spread over the equivalent put spread. The call spread being DITM involves additional fees. The broker is trying to protect the client from himself. There is no flow in the spread as was shown in the spread-OI.
Dear poopy, ignoring me is plain stupid, especially when you quote my post. There are many ways to see what you have posted. Not that I care anyway. But let's keep in touch. I want one day to sort out that argument we had in person and if you ignore me, we won't be able to. Think about it.
If you are trying to understand it, then your tone is failing you. You should call TastyTrade and ask them. Because the OP shared the email and his story to the public, its within your right to call their risk department. As a customer they should explain it to you. My broker has answered questions that people have posed on here when i called them to ask.
neww, it's not a messaging issue as he would be in the same boat buying the ps instead of selling the cs. Sure, he's nigh on ****** but they aren't really making the messaging argument rather the ITM risk and fees (pin/exercise/assignment).
fair point. I agree it's the pin/exercise/assignment. The trade has low risk today but if he fails to close, he will be margin called with a tick of buffer. Tremendous operational risk in an attempt to buy a $5 callspread for zero.
Don't bother asking/responding these two clowns on this thread. They obviously think they are far too intelligent famor any reasonable conversation. Poopy by name, and by nature I reckon. They don't seem to understand that I MADE a profit. This is not an issue with other brokers. So bye bye Tastytrade.
Poopy is a wanker but the other guy is making a good point. Just too obsessed with arguments on this forum that he thought I was trolling him.
It has nothing to do with profitability. All of the risk and fees can be avoided by trading the synthetic (OTM) in the calls (call diagonal). Further, if not closed then you're assigned on the D1 short (in cash) and naked on the D2 long which is not cash-secured at exp. IOW they have to close you out at market if you fail to do so or you will be carrying the full debit on the D2 (duration 2; long side of diag) which you clearly don't have in the account. Going to the market on something like that will cost TT a multiple of your net liq.