The short answer… What’s the difference?
Good Day Everyone,
First, the purpose of this article is not to advise or tell you what brokers to use. We simply want to share a second hand story.
There is no doubt you have seen on the news or heard about groups of retail traders on certain social platforms causing a few short squeezes. Now this has created quite a frenzy following main stream media’s coverage of the situation. Let’s be clear we are not affiliated in anyway with those groups that are involved. It sounds like an out of control monster at this point and the push and pull from certain institutions and media has been a circus.
In the end we think there will be a substantial amount of investors moving their accounts to avoid these nightmare scenario’s from happening to them. There is just too many innocent bystanders being gunned down by these brokerages who under the guise of (Protecting themselves or you) have halted buying, and continue to allow only selling in some of these securities in return putting a ceiling on them. Wait, what? So, if you force the stock down now by restricting buying aren’t you catching people by surprise and bringing about the very losses that you said you’re trying to protect them from? Is that a free market? But, that’s not what our story is about, ours is much more sinister and blatant robbery of the retail trader. So here it is…
This person (that we are very close to) was watching the situation unfold with the retail group and the media coverage on Tuesday 01/26/21 throughout the day. By the way, this person wanted me to mention they were captivated and cheering the retail group on all day. So, towards the end of the day OUR favorite segment came on Fox Business, “The Claman Countdown” with Liz Claman. During that segment Liz mentioned she would be interviewing the CEO of AMC about their close call with bankruptcy. This ticker was simultaneously being talked about on a certain social platform about a potential short squeeze. So our friend took the plunge and bought 130 $6.50 Call options with a February 5th, 2021 expiration through… Yup you guessed it, TD Ameritrade. At the time the stock was trading at $4.89/share and the options were $.92 per contract.
Sounds great right? Well, not as great if your broker blocks options quotes for the first half to a full hour of trading in that stocks options. During the pre-market hours 8:30AM EST to 9:30AM EST our friend was excited about the potential profit and anticipated closing the options at market open. During this pre-market hour his TD platform was showing his balance range from $160,000 to $244,000, pretty exciting right? I would say so! So after what felt like an eternity to him watching AMC’s price fluctuate between $18-$25/share in pre-market action.
The bell finally rings and it looks like his gross from the contracts will total $205,000.00 or about $190,000 in profit. AMC’s opening price was approx. $20.43/share. He enters the order to sell all 130 contracts at market AND NOTHING HAPPENS! So he looks at the options chain on TD’s platform and surprisingly finds no bid and no ask, no quotes, nothing. Just a blank order book staring back at him. Meanwhile the price of AMC is volatile and taking that expected and dreaded morning dip. It’s now between 9:40 to 9:45 AM after trying everything he could online, he calls TD. After a very short hold time which is suspect in itself for a crazy day like 1/27/21 was. A broker gets on the line and asks how he can help. Keep in mind the call was delayed about a minute while our friend searched for his call in PIN. So, the broker knew exactly who he was talking to before picking up the call. Our friend calmly explains the situation and the broker says “I’m so sorry sir but we can’t do anything about it, you see, we are waiting for those quotes from the NYSE, they are the problem. Keep an eye on the options chain and as soon as you see quotes you can sell” Our friend somewhat dumbfounded by this response says ok I will do that and hangs up. The options chain remained blank for another 15-20 minutes. Meanwhile AMC’s stock price drifted to around $11.60/share from that opening price of $20.40/share.
Let us back up just a bit, during the period of time between 9:45AM EST and 10AM or so our friends position balance dropped back to $13000.00 and the options value went back and froze at .92/contract. So, during the confusion how did his account balance jump between $150K to $240K in pre-market and during those opening minutes of the market if the NYSE had not yet sent any options quotes on AMC to TD Ameritrade?
So call NYSE right? He did, and knowing they can not discuss certain things with retail traders using a brokerage like TD he did not identify himself that way. The gentlemen he got on the phone at the NYSE assured him they were providing quotes! YES assured him they WERE in fact providing quotes on those particular options contracts at the market open 9:30AM Eastern.
What? You have to be kidding me, right?
So call a Securities Lawyer then, right? Well, he did! Much to his amazement after the securities lawyer quietly listened to the whole story she said “Oh, yeah TD? It happens all the TIME!, the broker kept the difference. They will probably settle it sounds like you have a good case” She went on to mention some other reports of brokerages such as Robinhood and TD cancelling stock purchases after the fact! Yes, so the client would see the stock in their account only to find out later the order had been cancelled. The result was this person bought it at a higher price to secure the trade anyway.
In the end our friend was able to capture approx. $9.35/contract with a net profit of over $100k, but that’s a far, far cry from the $190,000 (give or take) he would have made at the open. Who thinks TD made over $100k by not providing quotes? That is just one instance, what if there were 1000?
We believe this story is 100% based on facts and 100% true. Updated 01/30/21 Everyone we know who had accounts with TD Ameritrade, Interactive Brokers, Etrade or Robinhood has moved their money.
We thought our members would be quite entertained and interested in this story.
We have expanded this article with the videos below.
I Won’t Rest Till The People Responsible For Today Are Behind Bars pic.twitter.com/tlbHD4TPQ0
— Dave Portnoy (@stoolpresidente) January 29, 2021
Jim Cramer admitting to how he manipulated the short selling market back in 2006. Retweet https://t.co/yMO2RXFtO0#RT, #BTRTG, #ITRTG, #TradersNewsSource @sourcetraders
— Traders News Source (@SourceTraders) January 31, 2021
Update*** During this instance with TD it is important to note that there were no restrictions on trading AMC securities. The first restriction placed by any brokerage was a few hours after this position was closed and it WAS by TD on AMC securities Tuesday 01/26/21. Very interesting fact to take note of.
Update*** At the time of writing this TD wasn’t the only brokerage that was not providing quotes to their clients on these contracts. The question is, was the NYSE in fact providing quotes? It is also hard to believe these were simply technical issues, this is 2021 not 1995. Technology has come along way. We encourage you to submit information on this subject and we will protect the identity of whistleblowers. Editor@TradersNewsSource.com
Make your own conclusions and do your homework.
You may also be interested in PFOF (Payment For Order Flow)
Stay tuned and stay informed,
The Traders News Team
We have received a lot of messages asking what brokers to use. We do not give financial advice and that is not our intention when issuing this news article.
