Tradier review

status1

Active member
So I recently moved one of my accounts to Tradier thinking it would be better but sad to say it's not much better
If you want to trade calendars and diagonals on indexes they require to have a 100K account
Why ?
I don't know and since all the platforms are tied to Tradier like TradeHawk they all have the same problem
I asked them about it and this was the reply

"Calendar spreads, for the purposes of calculating requirements, are viewed similarly to uncovered contracts
because they are European style and cannot be exercised early. This applies to all Tradier accounts regardless of
whether you’re using a platform or not."

Maybe I am not an expert but I don't see how this makes any sense and why other brokreages don't have this requirement
Because it cannot be exercised early this is making the calendar appear to be the same as an uncovered contract ?
Can someone explain the logic because I don't see it

Well looks like I will be looking for yet another brokerage soon
 

vega4mike

New member
Looks to me like they are more a software business than an options broker and they don't really understand the options world. Best to look for another broker.
 

status1

Active member
That is unfortunate because they are tying up all those platform they advertise so they are all in the same boat
I already started looking for another brokerage
 

AmyM

Amy Meissner
Aeromir Expert
I looked into Tradier as well because of the commissions and was disappointed in a few things including the margin requirements on condors and multi spread strategies. I've been using Tastyworks for the small trades to get the better commission rates and for small accounts it's a pretty good deal with no closing commissions. They also have capped commissions on stock options, so the overall cost is better than most brokerages. I'm setting up a demo for next week with one of the guys from Tastyworks to join and show some of the features that I think work well with the Boxcar strategy. I'll send out an email as soon as I have the date and time for next week. Here's a link if you're interested in opening an account there and checking it out: https://tinyurl.com/y5gzwgru
 

status1

Active member
Thanks Amy.
I already have an account there and I have no problem with it other than the commissions which are the highest of all the other accounts I have when trading SPX
I understand that they have no closing comissions but you still have to pay 75 cents for the SPX index fee so when you add that to the oppening commission it becomes the highest for a round trip trade
For stocks and high volume I am sure they are better but not for SPX
 

status1

Active member
Here is the latest reply after I asked them for a better eplanation

"The issue occurs when you need to get out of the position in a very volatile market and the bid/ask spread on the option you are long is extreme. If the bid is well below the intrinsic value of the option, you cannot just exercise the option to realize the intrinsic value of it. You have to wait until it expires. Meanwhile, your short option may be expiring and letting it expire would leave the account with a large cash debit "

It doesn't make sense to me
I am not sure if anyone is even thought of legging out of a long option of a put calendar and leave the short option open to suffer more losses only to think about what the intrinsic value of the option might be to try to exrecise it
If you do that kind of move you could do the same thing on a regular spread and have the same result so you would need a high account to trade spreads also

This new guy that answered says the account requirement is 300K
Sounds like they don't know what they are talking about and they don't have their act together
 

AmyM

Amy Meissner
Aeromir Expert
Thanks Amy.
I already have an account there and I have no problem with it other than the commissions which are the highest of all the other accounts I have when trading SPX
I understand that they have no closing comissions but you still have to pay 75 cents for the SPX index fee so when you add that to the oppening commission it becomes the highest for a round trip trade
For stocks and high volume I am sure they are better but not for SPX
hmmm... I thought that the fees had to be paid at any of the brokerages. Do you find the additional fees for the SPX larger at Tastyworks than other, I had thought the fees were supposed to be passed through and the same regardless of the brokerage?
 

garyw

Active member
Gold Member
hmmm... I thought that the fees had to be paid at any of the brokerages. Do you find the additional fees for the SPX larger at Tastyworks than other, I had thought the fees were supposed to be passed through and the same regardless of the brokerage?
Schwab claims they do not charge exchange fees on SPX.
 

status1

Active member
Every brokerage calculates them differently by adding different fees so they don't come out the same per leg
For Tastyworks it's 65 cents but they add another 10 cents per contract for the "clearing fee" so effectively it's 75 cents per contract regardless of the commission or if it's opening or closing Than there is an additional 39 cents "Trans fee" that is charged separately That is for a 10 contracts so when you add to that the $1 comission you get $17.39 for one leg of a 10 lot
At TDA it's a little more tiered so you get a little discount for the weekly or if the option price is less then $1 so for the exact same trade at Tastyworks at TDA I am getting it for $12.47 including all fees So for a round trip at TDA on a 10 lot it's going to be $24.94
The same thing at Tastyworks it's $25.78 so all that gimick with no comission for closing is not working out for SPX

Just to reply to garyw as well It is true that they do not charge exchange fees so that comes out to 6.64 to 6.68 when adding 0.14-0.18 fee for "exchange process fee" so that is $13.36 for the same round trip on a 10 lot
So Scwab has the lowest with Fidelity a close second and Etrade in between Fidelity and TDA and Tastyworks with the highest
Of course Tastyworks may have an advantage if you trade a lot of contracts or something other than SPX but otherwise you will not see any commission savings on SPX for 10 contracts or less
 

status1

Active member
Here is a scenario that they are affraid off

"Consider this: It’s the day of expiration of your short SPX $3,000 put and SPX is at $2,000 after a major drop in the market. That one put has an assignment value of $100,000. You have a long put at $2,800 expiring next week but the quote on it is 600.00 x 900.00. If you sold at that bid price, you would be out $20,000 more than the difference in the strikes. If this was an equity option, you could exercise the long option. Since this is an index option, you cannot. You’d be stuck with $100,000 debit in your account until expiration next week or you’re stuck taking a bigger than anticipated loss. That is why this is considered naked. "

Ofcourse they don't consider the long side which has 80K gain I suppose if you held it into expiration for 1200 points and than you don't close the long side and it comes back up than of course you will loose more than 20K but I would not consider that naked

So for this unrealistic scenario they require 300k account size to trade calendars or diagonals

If you do that kind of trade you can easily loose 300K if you increase the lot size so I don't see that as any kind of protection against bad trading
 
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