On-line Broker in a day trading account problem?

Some of you great guys out there saw my initial question about my on-line broker. The inability for their system to handle my sale order caused me a great deal of financial pain when options I purchased (signed agreements in place as a day trader and as an options trader) filled, and as the intra-day trading prices moved around I order a straight sale, no margins, not related to any spreads. Actually the most damage was done because the option was a weekly option. The order jammed, but not the software glitch or system down issue of any sort as outlined in the agreement. Talked to reps who gave me free trades and was sorry. You guys told me to write the compliance dept. I did. Part of their letter say:

"On rare occasions, our internal order management system will incorrectly pair certain option contracts together, causing the maintenance requirements of the affected positions to not be calculated as efficiently as possible. Thus, Available Funds and Buying Power balances may be incorrect as well. When this happens, the resolution to the problem requires a manual adjustment to the paired positions themselves, which is done at the request of the affected client. This is the situation you encountered in May.

Another potential resolution to the issue is to switch an account to a secondary option pairing system called Complex Option Trading System, or COTS. Your account was switched to COTS on May 13. I understand your frustration comes from not being informed of the existence of COTS prior to the issues you experienced. That is because COTS is not a system completely devoid of issues either. It is a system primarily utilized for clients trading complex option strategies involving 3 or more legs in a position. Therefore, it is not something our firm has decided to offer to clients, but rather utilize it as situations warrant.

I sincerely apologize for the frustration the situation has caused you. Ideally, our clients would never experience this issue; however, system issues are an unfortunate operational risk. (BROKER NAME) does not guarantee system availability or functionality. I'm glad to see you were awarded commission-free trades in light of the situation; however, an accommodation beyond commission-free trades is not warranted in this matter.

If you have additional questions regarding COTS, please do not hesitate to contact our Advanced Options Team at , extension 209111. We appreciate your business and look forward to maintaining a positive business relationship."

Kind regards,

Senior Research Specialist
Office of the President

I spoke to 7 Reps over a 3 day period in which the only thing they could finally say was they wre now tweaking my account as the letter indicates. What? as a day trader and with weekly options the adjustment on purchases were not the problem, they filled, it was then my sale order that then out of no where was deemed their "Cancel" over and over. I find them really insulting, as I was a Trust Officer for a regional bank for years, and where is fiduciary and prudent conduct? Is it non-exsistant today. Their inability to serve the excellance they insist ....the latest, fastest etc. is then false to the consumer and the retail trader. To top it all off I was on line in late August in a new trade, nothing weekly of course. When my sister, who is a joint owner of the account, called from her office, and not in my area, a Rep about a password issue on a different platform than I was on, and out of the blue before he hangs up tells her he'll try the password on the platform I was using...I know tec reps look at the screen and are suppose to ask before they take over your activity. So consequently knocking me off line, and here we go again. I have not even gone there yet with them, but its logged in on the account activity as the last contact.
I was told by one adviser to write a demand letter, that their letter really dances around what happened. I believe no way should they have had a day trader in a weekly option with the software issues they themselves describe.
Another adviser, an attorney specializing in FINRA said if its worth it, I should file that way...(too long and just wrong).
I also read on line that there are slow systems that have now begun to be known and reporter which are problems for traders. So, I thought maybe I would write and send a cc; to the well known financial adviser, who sponsored my signing up with them in the first place. Maybe embarrassing them is best. I don't know? Help!

Public Comments

1. The market is risky enough, the slowness of the trading system only cascades the risk. There isn't really anything you can do about it. When you first applied for an account, I believe there was some sort of agreement that the brokerage is not responsible for any kind of occurrence. If you are not happy with the current brokerage, find another one.

2. Online is very difficult to trade because there is many limitation because in risky market you have no more limit.

3. they have apologized, acknowledged the problem and offered some kind of commission free trading arrangement as compensation. They don't feel obligated to give you monies that would have resulted in a smooth trade.

Not being a day trader and not dealing in Options I don't know how often these things happen....but I do know that what you are doing is not going to get you satisfaction that you expect and certainly will not help you with a relationship with this broker in the future.

So my question is "Why are you still with them, when they acknowledge issues with their system???"

If I had that problem and was not satisfied with the response....I would switch accounts to another broker in a heart beat....why aren't you doing that?

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Maybe embarrassing them is best.
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Trust me....in business, embarrassing someone you are doing business will never work. That Financial adviser that sponsored you before will never sponsor you again...He won't know you....