- Report: #317814
Report - Rebuttal - Arbitrate
Complaint Review: OptionsXpress Online Options, Stock, And Futures Brokers
OptionsXpress Online Options, Stock, And Futures Brokers311 W. Monroe Street, Suite 1000 Chicago, Illinois U.S.A.
OptionsXpress Online Options, Stock, And Futures Brokers How To Rob Your Customers Without Any Legal Repercussions Chicago Illinois
*Consumer Comment: no suprise
*Author of original report: Logical Fallacy of Ignoring the Subject by Diverting Attention -- Nice Try Tom!!
*Author of original report: Logical Fallacy of Ignoring the Subject by Diverting Attention -- Good Try Tom!!
*Consumer Comment: MIT...?
*Consumer Comment: You imply you graduated from MIT however my research finds only CUNY
*Author of original report: OptionsXpress
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I make use of a put credit spread strategy on the SPX or the S&P 500 index, and when the SPX drops down to the strike price of the short put I exit the spread.
On 1/22/08 I had a spread of 26 SPX Feb 1300 Short Puts x 26 SPX Feb 1275 Long Puts. I had a trigger point set to 1299 so that if the SPX or the S&P 500 drops below 1299 then immediately my spread should be sent to the floor as a Market Order to close.
However, when I examined the fill report, I found out to my amazement that OptionsXpress triggered my spread closing order not at 1299 as I specified when I setup the contingency order, but at 1275.62. The closing cost was $1,400 per spread put or $36,400 for 26 spread puts, and based on my experience (six years as an active trader of options, and almost exclusively trading options on the SPX) if it was done right I should not have paid more than 10.00 or $26,000 for 26 spread puts even under conditions of high volatility because the long leg counterbalances the short leg which is one of the advantages of trading credit spreads versus naked options.
I notified the OptionsXpress executives of this error, and told them that it is their responsibility to absorb the cost of this $10,400 error, and I was even assured by one of OptionsXpress' Executive Vice President, Phil Bennett, who happens to be the brother of OptionsXpress CEO, Ned Bennett, almost 6 years ago when I considered the possibility of a contingent order not activating that OptionsXpress has business insurance for such an event, and I will be made whole in such a case.
To my utter disbelief and bewilderment I found them to turn options theory on its head, and make the outrageous false contention that I would have received the same fill price whether my closing spread Market Order was executed 1 point ITM or almost 25 points ITM on the S&P 500.
Since all I had was a promise given to me through chat by Phil Bennett, and not a real guarantee that is legally loophole proof, I had to absorb the $10,400 loss as well, but as I told Phil Bennett, the least I can do in return is to warn others that behind OptionsXpress nice graphical user interface is a system that is buggy, and should one sustain significant damage because of it, one will find a management team that not only won't accept responsibility for this system irregularity, but will try to show through all kinds of sophistries that one hasn't sustained any damage because of said system irregularity in the first place so any assurances given to the customer in regards to recovery for such a loss from OptionsXpress don't even apply!
Bernard L., MCP, CPA
P.S. Those six letters after my name indicate that I am an Investigative System CPA. It was my job to detect fraud, and catch con artists as they were engaging in their criminal acts, but I was taken by the OptionsXpress Management Team of Con Artists before I even knew what hit me. That's ok because if con artists mess with the wrong people they get back much more than they bargained for in the long term.
In any case, I suggest that if you have any dealings with this firm then head for the nearest exit methaporically speaking. An ounce of prevention is better than a pound of cure. Financial con artists are generally good at what they do, and some are so good at what they do that they up ripping off the public of millions of dollars legally.
I searched the Ripoff Report database, and found out that I had the honor of being the first person to write a ripoff report on OptionsXpress. The company only got started in 2000 so we have to wait a little longer before you know what hits the fan. However, one of their principal business partners is Optionetics, and there are a multitude of complaints against them here regarding their fraudulent sales techniques of selling very expensive options seminars with the promise of making to the marks (often senior citizens) very good money trading options once one has absorbed these Optionetics techniques of trading options. All of this information can be found in a $20 introductory book on options, and better yet one can go to one's library and pick up 2 good books on options and not even spend a penny.
The hard truth if one asks any honest professional trader of options is that around 95% of independent (those that trade only with their own capital) off floor options traders lose money over the long term. It is easier to get into M.I.T. and Harvard than to be a successful off floor options trader over the long term. I should know because I was at M.I.T., and this work in the six years that I have been doing it seems to always find new ways to challenge me so far.
Practical trading strategies that work are not found in options books or at a broker swindler like OptionsXpress or its elder brother in the options con game, Optionetics. They are the original inventions of the traders that utilize them, and they are highly guarded trade secrets because once a multitude of copy cats traders make use of a successful trading strategy the imbalance that existed in the markets and made that trading strategy successful is eliminated.
I don't want to end this post or report on a down note so if one is intrigued by options trading, and one has the necessary mathematical, computer, and financial training together with sufficient capital then one should give it a go. There isn't a job in the world where one has more independence or freedom than in this work, and one is beholden to no one. There are no supervisors and there are no clients. This doesn't mean that one isn't going to be working, and hanging out on the beach or in a bar socializing. I never had a job where I worked more or had more work than in this one, but I do the work on my terms. I don't have a boss breathing down my neck, clients wanting that their work should have been done yesterday, or having to show up to work when I really have nothing to do.
Outside of the academic, experience, and capital requirements for this work what I believe is absolutely necessary to be a successful options trader is to be an independent thinker, to have a keen eye for the most minutest details, and most important of all one has to live to fight whether it be a protracted mental struggle to find a solution to a fault in one's trading strategy or in teaching the management team of one's broker that there is such a thing as right and wrong in this world, and an appropriate punishment will be exacted for a crime committed by them if not by Positive Law then by Natural Law.
New York, New York
This report was posted on Ripoff Report on 03/14/2008 04:54 AM and is a permanent record located here: http://www.ripoffreport.com/r/OptionsXpress-Online-Options-Stock-And-Futures-Brokers/Chicago-Illinois-60606/OptionsXpress-Online-Options-Stock-And-Futures-Brokers-How-To-Rob-Your-Customers-Without-317814. The posting time indicated is Arizona local time. Arizona does not observe daylight savings so the post time may be Mountain or Pacific depending on the time of year.
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