ok, I was holding TASR options for 7 days, on yesterday I wake up and check my account..My options were up +23 points on 15 contracts. I immediately hit the inside bid on the AMEX and sold for a respectable profit. Seeing that TASR can drop $30 in one day I just figured I caught its next run. Broker calls me, a senior individual in management says "we made a terrible mistake" he continued " TASR split 2-1 this morning and we were suppose to change the option symbol in your account" He said they are totally at fault but that they can't let me keep the profit I gained from a totally legal trade. I told the gentleman that their mistake has nothing to do with me. I even asked him if I had made a clerical "mistake" that took thousands out of my account would they bust the trade and give me my money back because I was careless..he said maybe. Any advice would be helpful. This is unbelievable. They forget to change the symbol, I make the trade, they take the money...there is something wrong here. Rossmedia
All valid points travel down two way streets...So if I sell a position for 10 instead of 100 because of an error, there should be no problem in getting my money back....Somehow I don't think that would happen. rossmedia
It's not a legal trade! If TASR split 2:1 the underlying options contracts are all adjusted accordingly. The premium did not increase in value 2 fold, you merely own twice as many of 1/2 prices contracts. If you cut six apples into twelve 1/2s.....you will bake the the same number of pies. Nice try. Arbitration will rule in favor of the broker. Now that I re-read your post what a mess! You are actually now short the post split contracts and long the original ones! Technically the pre-split contracts would not exist after the split. Thats a shame.
I understand the math, that's the easy part. The question is can the broker get away with the carelessness of not changing the symbol, and would he be gracious and give me back my money if I made an "error" rossmedia
As a peon..... you dont get that luxury. When they make a mistake.....trade broken. We you make a mistake....tough shit. Thats the way it is until your worth mega bucks. Typical rigged bullshit. I would at least try to negotiate a "get out of jail free card" from them that states the next time YOU make a mistake, they promise to break the trade Seems only fair peace axeman
Obviously, YOU knew there was an error...best thing would have been to use another data source to confirm your quote. However you thought you could take advantage of such a situation..thinking you'd outsmart big brother Nevertheless, good luck on trying to keep the profits as this is "data error", the likely hood is your broker will break the trade. Good luck on arbitration.
Why don't you offer a compromise to your broker? The best thing to ask for might be free commission for the next 50 trades or something like that. That would be worth something to you and wouldn't hardly cost them anything.
Not trying to be a smart@ss here, just a reminder for the newbies out there: whenever i see a stock that opens at half or a third of it-s closing price I double check ( well actually I check the splits every morning).
Not a good analogy.... unless the spread was 10 bid 100 offer, your "10 offer" would be filled at the best bid-somewhere close to 100 Tbill