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james gainer wrote:
>
> I have watched you group for some time and would value anybody's
> opinion on the bandits at c.schwab they call brokers. On August 13,1997
> I entered a market order for 20 contracts for a GE Sept70 call (Gein)
> with a cash balance in my account of $4,200.00 .
> Not only did they spend all of my account balance but went $440.00 over.
>
> Because options are treated on a cash basis only! this order should have
> been canceled like
> several other orders that they canceled in the past , costing me a lot
> of potential profits
> because I did not factor in their commissions at the time. My 500 team
> cited to me that
> their policy was if you didn't have the cash in the account the order
> would be canceled.
> When I questioned why this order wasn't canceled like the others? I was
> told I would have
> to put up $440.00 dollars that they over spent on my account. I told
> them their policy
> seems to have a double standard and I would not pay for their mistakes.
> On August 20,
> 1997 unauthorized and without my approval sold those 20 contracts at
> .25 cents per
> contract to cover for their incompetence. That left me with a grand
> total of $29.74 in my
> account. But it does not end their, the grand fanale was when arrogant
> and a happy broker from their 500 club called my house to inform me of
> this transaction,
> so happy in fact he laugh's on the taped message at the end. I saved
> that message as part of my evidence to be used in a court of law.
> Needless to say my account at schwab is in the process of being closed
> and those crooks won't have a chance to do this again to me .
I don;t know if you are posting this rant to get a response from us or
simply to try to hurt Schwab, but I'll give you my opinion. (I don't use
Schwab)
With only these facts, I don't see that you have much of a complaint.
It sounds to me like you are looking to blame them for a bad trade.
They did not "overspend" your account, YOU DID. You placed the order,
they have no responsibility to protect you from yourself. It may be
their general policy not to accept orders that put your account in
debit, but they can. It sounds like the order was a market order, so no
one knew where it might get filled and how much it might cost you. If
you placed the market order, your fault. Assuming they filled you in a
timely manner, you could have immediately determined that the account
was in debit and sold the options immediately, probably costing you less
than it ended up.
But you obviously liked the position, until it went against you, so now
you want someone else to pay.
You were cutting it too close in your account and if you don't pay the
debit, they can blow you out. They shouldn't laugh at you, but you can't
take them to court for it.
If the trade would have immediately been a big winner, would you have
given the money to Schwab because they shouldn't have allowed the trade?
Condolences on the loss,
Eric
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