Did you actually have $6,000 in profit or was the system inaccurately displaying $6,000 in profit. Can you tell us specifically what you did? Which contracts did you open, how many, which strikes, and at what price? Thanks.
Yes. For the NDX trade, I sold a credit spread deep ITM at 15,700/15800 strikes where I was filled at 99.95. As I mentioned this required margin of $5 per contract, and I opened 5 contracts. So my total risk for this trade was $25. Obviously for a credit spreads, the price needs to move down for a trade to be profitable. As my trade fluctuated, the $6,000 I was referring to was when the mid price had moved to approximately 87.95, in other words $1,200 per contract. I was in profit, and Tastytrade would not fill my closing trades. Then banned me from making further trades, for an as yet undetermined time. Simple as that.
So this is what happened: You bought 5 15,800 Calls, sold 5 15,700 Calls as a spread order and received 99.95 or $9,995 * 5 for a total of a $49,975 credit. (Minus commissions). How many days to expiration? Then the mid price moved to 87.95 for a seeming profit of $1,200 or $1,200 * 5 = $6,000. I suspect that the mid price was in error. How soon after you opened the trade did the mid price decrease to 87.95? The NDX can be very strange. I have had orders to sell credit spreads for say .50 and have the mid later say 2.40 and still not fill. The "true value" was never really 2.40 but closer to .40 - .60. Still, it is interesting that you were set to closing only.
I suspect the mid price was accurate. I could have set a limit to open or close at the natural price, but that would have required more margin and resulted in less profit. The reason profit can be so high with NDX, whether ITM or not, is volatility. The price was fluctuating throughout the trading day, until expiry overnight. Since I was trading a 1 dte option here. Interactive Brokers also has some arbitrary rule whereby establishing a position cannot exceed your account equity multiplied by 30. So it seems that Charles Schwab, or what was formerly TD Ameritrade is a broker that does not interfere excessively with its clients trades, and allows them to trade whatever they wish within reason.
Also I forgot to mention, since Tastytrade have taken such an approach, I'm not sure whether I care to trust them with any further deposits. Their margin team intervened here when it was totally unnecessary. So therefore after less than one week, and only 2 filled trades, I have an account I effectively cannot use.
When you tried to buy to close the spread, you kept increasing the price from 87.95 to a higher and higher price all the way up to the high 99s?
I am far from being one of the experts out here, but here are a few observations: 1) If possible, I would try to negotiate away those exercise and assignment fees. With such a slim margin for profit, they will eat away at it. There are too many brokerages out there with no exercise or assignment fees. 2) I'm not so sure the value was ever 87.95 or even the mid 90s. You say you have had success in paper money but have you had this kind of success in realtime with 1 DTE? The value being 87.95 is almost like having 800 point OTM 1 DTE SPX options trading at 0 x .05 and having one strike 750 points OTM 1 DTE bid at 1.00. 3) It seems unfair to them to restrict your account in this manner, unless, of course they perceive you as someone who "bets $100 on black and at the same time bets $100 on red." and perceive you as a total newbie. (0 or 00 will get you in the end!) If you have history of similar winning trades to show them, that would resolve the problem. Then again, why should you have to do so, right? 4) I don't know if you have done this, but I would try to speak to someone in person. The only thing not working in your favor is that you don't (as far as I know) have a long history with them and haven't given them huge commission amounts over the years. If you go nowhere speaking to a real human being, maybe it's time to go/remain elsewhere? Perhaps others can chime in on this matter?
You've stated repeatedly in this thread that TT will not allow you to close your bear vertical spread. "Closing only" refers to prohibiting you from opening a new position. No broker is going to prohibit you from closing a position. You didn't fill because you were never marketable in a short call spread that is 2500 ITM. Price the equivalent strike put spread to get an idea of where the actual market is/what is marketable. The spread was never marketable at better than $99, let alone $88. Chris told you it's uneconomic because it would be unprofitable for the buyer to enter into a $100 cs for $100. It's a waste of resources and uneconomic for TT to deal with your constant order messaging for something as retarded as you are attempting.
You make some good points there. Regarding the spread I was referring to, it most definitely was in profit, and the prices were correct. I have live data in my account, so therefore the mid price displayed was correct. I aim for mid price always. And by default, that is what most brokerage platforms, including Tastytrade, display. It is not a good look for them to restrict someone for seeking what is effectively an arbitrage trade, within a few days of live trading, for sure. They would still be making commission for every contract I buy and sell, so I seriously fail to see their argument about my trades being uneconomical. I shall await what happens next, but if they want my business then allowing me to trade deep ITM spreads, as I see fit, is a deal-breaker for me I'm afraid. I haven't spoken to a person either, only email correspondence. As I live in Ireland and have no means of contacting by phone.