Q: I trade options at my online broker. A bad trade yesterday that cost me $8000.00 due to a mistake by my broker.
I made an options call purchase on the 16th at market price. The seller was asking .20 cents per contract (100 shares) After putting in several limit orders in for up to .24 cents that were rejected I put in a market order which normally fills within a percent or so of the asking. When my order was filled it was at $4.20 for 20 contracts for a cost of $8260.00. It should have been in the neighborhood of $460.00.I was billed for $8000.00. Apparently this is legal. What is not legal is that my broker allowed the order to go through. It says very clearly on their web-sight that the buyer must have 100% of the cost of the trade in their account for the trade to go through. I had a little over $4000.00 in my account yet they allowed the trade to go through leaving me with a $4000.00 negative balance. I told them that it was their responsibility to reject the trade due to insufficient funds which they have on at least 20 or more trades in the past. So we are at an impasse. Need help. Thanks
A: Have you reviewed your entire contract with your broker-dealer? Depending on the specific language they may have been within their rights to fill your order.
Justia Ask a Lawyer is a forum for consumers to get answers to basic legal questions. Any information sent through Justia Ask a Lawyer is not secure and is done so on a non-confidential basis only.
The use of this website to ask questions or receive answers does not create an attorney–client relationship between you and Justia, or between you and any attorney who receives your information or responds to your questions, nor is it intended to create such a relationship. Additionally, no responses on this forum constitute legal advice, which must be tailored to the specific circumstances of each case. You should not act upon information provided in Justia Ask a Lawyer without seeking professional counsel from an attorney admitted or authorized to practice in your jurisdiction. Justia assumes no responsibility to any person who relies on information contained on or received through this site and disclaims all liability in respect to such information.
Justia cannot guarantee that the information on this website (including any legal information provided by an attorney through this service) is accurate, complete, or up-to-date. While we intend to make every attempt to keep the information on this site current, the owners of and contributors to this site make no claims, promises or guarantees about the accuracy, completeness or adequacy of the information contained in or linked to from this site.
