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Robinhood closed out an option spread I had deep in the money with no notice, citing some kind of risk. I get a notification that "my" order executed two minute
by ikeboy 6y ago
Robinhood closed out an option spread I had deep in the money with no notice, citing some kind of risk. I get a notification that "my" order executed two minutes before market closed, I immediately contact Robinhood saying that I didn't place the order. It took a week for them to tell me that they had put the order in on my behalf. Cost me $1800 vs the value held to expiration (which was a month out.)
Seriously considering taking them to small claims court. No notification beforehand, and even afterwards it took a week to find out what happened.
- notyourwork 6y agoTheir support is beyond unacceptable as far as I’m concerned. I left them as quickly as I joined.
- anonu 6y agoResearch this a bit more. It may be within their risk parameters or guidelines. But if you think theres a breach here, you should raise a FINRA complaint.
- ikeboy 6y agoThey pointed me to an obscure page on their site that implies but doesn't directly say that this might happen. I don't know the laws, have to do more research.
- gamblor956 6y agoDoesn't matter. Raise a FINRA complaint now. You don't need to be an expert in the rules and try to determine on your own whether it's a violation of FINRA's rules. FINRA will do that for you. Even if Robinhood technically disclosed that they might do it, violating a customer's express orders without documenting appropriate reasons for doing so is generally a violation of FINRA's rules. Brokers have lost their licenses for shenanigans like that.
- ikeboy 6y agoThanks. I just went and submitted one.
- azmenak 6y agoTo contrast, in my early days of options trading with Interactive Brokers, they had closed a spread ~10 minutes before expiry at a loss, which turned profitable 8 minutes later. Contacted support, and they responded within 2 minutes explaining exactly why this had been done (risk profile at the time, and insufficient margin to cover). They answered all my questions and even explained what I should do to mitigate this issue going forward.
- xyzzy2020 6y agoUsed to have IB: that broker is no joke. I would see ads on TV of $7 a trade while I was paying their crazy .001 cents per share or whatever their price was. Great paper trading account, and a Java/C++ API for everything. Plus level-2 data. These kids with their RH accounts have no idea..