10 ms·
Robinhood’s own documentation for the greater part of last year explicitly stated they would automatically sell or execute your options within a 1 hour window o
by asidiali 6y ago
Robinhood’s own documentation for the greater part of last year explicitly stated they would automatically sell or execute your options within a 1 hour window of expiry.
I lost thousands when Robinhood prematurely executed my position ~100 minutes before market close. I was waiting for right before the hour window.
Of course, 10 minutes after they sold my position, it quadrupled in value. I even already had had a limit sell order on the books! They cancelled my order, and executed their own, without any notice, outside of their own documented window.
When I contacted support and pointed them to the docs, their reply was that it could be “anywhere from 60-90 minutes before close.” Here is their email [1]. I asked them to provide a link to where their documentation says such - they never responded. I followed up twice.
Such utter bullshit. Immediately switched to ETrade and have had a great experience. There is a nice representative who’s direct phone number I can call and always reach, she always answers, and gives me any info or help I need. She called me within a week of me opening the account just to say hi and walk me through my account settings.
Also, sure, ETrade will auto sell your position too - within 10 minutes of market close. That sounds a lot more like protecting my investment, than a 60-90min window used to drain retail investors of their expiring options.
Edit: this page [2] still says "about an hour" to define the auto-exercise window. Click on the "What happens" dropdown under the first header.
[1] https://imgur.com/1jfkZNG https://imgur.com/1jfkZNG
[2] https://robinhood.com/us/en/support/articles/expiration-exercise-and-assignment/ https://robinhood.com/us/en/support/articles/expiration-exer...
- ptero 6y agoRobinhood does not have the same weight as larger brokerages, like Schwab, ETrade or Fidelity, so I would definitely expect it to perform worse on time-critical trades. By the same token, those large consumer and pension-fund focused brokerages would fare worse than internal trading desks and shops focusing on the HFT traders. I would not use Robinhood for HFT or in general where I would care about the speed of trade execution.
- sidlls 6y agoThere's no good reason for any company putting itself up as a brokerage to have a 60-90 minutes window for any equity or options trade. They most definitely have the ability to cap that window, and cap it to a much smaller range. They just choose not to--probably so they have some plausible deniability or wiggle room to fleece people like the OP.
- asidiali 6y agoTrue, fair take - but would you really consider a 2DTE position "HFT"? I run ethereum bots, IMO that is not HFT and Robinhood should at minimum have account representatives to manage client relations to be allowed to operate. But they don't, because of everything that you said. They are lightweight by design, they are not for large investors, they are made for the retail space. You can see this echoed in their featureset - for example, no historical date on options prior to purchase date, and only visible once you've purchased the contract. With Etrade or other institutional brokerages, you have access to full historical data for any contract or stock you are looking into. You are able to educate yourself and make much smarter decisions, without leaving their app. Granted, the Robinhood app is much smoother. They dont' have an iPad app though, which was another big con for me.
- patagonia 6y agoRobinhood is for the general public. The general public has always been fleeced in the markets. Always. And always will be. Read any historical book on the markets, the public is getting fleeced. If you want to complain about execution or products or relationships you should get serious and become a trader, in which case you’ll immediately stop using Robinhood. If it makes you feel any better, almost every time you’re being fleeced there is a professional trader on the other side of the trade laughing at this dumb schmuck just giving their money away.
- asidiali 6y agoWell, what an ironic name they have chosen for themselves indeed. Although it leaves a sour taste, I can't disagree with what you've said.
- patagonia 6y agoIndeed. For what it’s worth I don’t think Robinhood intentionally created a product that can serve its users up on a platter. Robinhood’s platform can still be used in a way that creates a lot of value for disciplined value investors with long time horizons so long as they are careful with their order types. I think they’re just not watching their blind spots in an industry that thrives off exploiting blind spots, and their efforts to grow their product are outpacing their efforts at being market savvy.
- caturopath 6y agoYou don't seem to know what HFT is.
- asidiali 6y agoI said I don’t consider a singular, multi-day position to be high frequency. Care to enlighten?
- caturopath 6y agoHFT does not refer to all intraday trading, but rather extremely latency-sensitive (subsecond) strategies. In markets where there is not a legal requirements, such as for US stocks, an HFT would not execute through a broker (not through Robinhood, not through Credit Suisse...they would execute directly with the trading venues they are trading in.)
- asidiali 6y agoGreat, thanks for the explanation. Hence my ETH bot example, which often times use cross-exchange strategies that are indeed latency-sensitive.
- elliekelly 6y agoSeveral law schools operate “clinics”[1] for investor rights and investor advocacy. You might consider contacting a few to see if they’re willing/able to help you resolve the matter with RH’s actions not aligning with their stated policy. Clinics usually offer their services for free or at a greatly reduced cost. [1] Second and third year law students performing limited legal work under the supervision of an experienced attorney.
- asidiali 6y agoThanks for the info here - while I have long since cut my losses and moved on mentally/financially, hopefully this may prove beneficial to others.
- baby 6y ago> There is a nice representative who’s direct phone number I can call and always reach, she always answers, and gives me any info or help I need. She called me within a week of me opening the account just to say hi and walk me through my account settings. The whole point of these new apps is that millennials don’t want to talk to you on the phone.
- deleted 6y ago[deleted]
- asidiali 6y agoSure yeah, would I rather just have full-on admin access granted through some web dashboard to deal with it myself? Of course. I'll be the first to sign up for AWS Broker when they release VPBs. But between having a rep proxy my account needs, or zero recourse for dealing with my account problems? I'm happy to make the phone call.
- PaulDavisThe1st 6y agoJust for the record, I'm 57 and I don't want to talk to you on the phone either. That said, if we do, it will be great if it is a nice experience and it will be very, very bad if it's the opposite.
- randycupertino 6y agoHaving worked in a call center, I think it's more driven by the fact that labor and customer service costs are high and call centers are expensive to operate, so they try to not offer that as a support option.
- lotsofpulp 6y agoI prefer written communications so I have a copy for future reference.
- bobthepanda 6y agoVery few customer supports provide reasonably prompt written communications, though. And the trend of chatbots to try and help you first is particularly bad.
- JumpCrisscross 6y ago> 10 minutes after they sold my position, it quadrupled in value Former options market maker. A reliable source of alpha involved mining retail brokerage agreements--particularly the online-only ones, which were the bleeding edge at the time--for these sorts of shenanigans. In some cases, the conflicts were clear. We paid a large brokerage for their options flow. They got a premium because, in part, they didn't automatically exercise in-the-money options at expiry. So you'd have a stream, on every expiry, of free money coming in. It always struck me as odd that one part of their business was profiting from another being deficient.
- asidiali 6y agoThere it is! Makes total sense. And yes, I've learned my lesson - thank you for sharing, and you're welcome for the free money :D
- JumpCrisscross 6y agoIf you lost a meaningful amount of money, consider filing a FINRA complaint [1]. They will do a lot of the work for you. And they come after firms, even the big ones, with teeth. Particularly when there is a retail investor on one side. [1] http://finra.org http://finra.org
- dehrmann 6y agoI hear there's a much harder thing market makers do with ETFs rebalancing, but ETFs put a lot of effort into getting fair prices when they rebalance, so it's definitely harder.
- dehrmann 6y agoI had a much more boring thing happen with a discount broker: they didn't execute a good until cancelled limit order in after hours. I kinda get it, but if I wanted to sell 100 shares of ZVZZT at $50 and it happens to hit $50.01 in after hours trading, sell it, or at least give me a check box to enable this.
- novok 6y agoI feel like beyond long term buy & hold saving / investing, you should probably be using something like IBKR lite or pro if you want fine grained guarantees like that.