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From: james gainer <jgainer@xxxxxxxxxxxx>
Date: Thu, 04 Sep 1997 09:54:35 -0700
Subject: ripped off at c.schwab
>I have watched you group for some time and would value anybody's
>opinion on the bandits at c.schwab they call brokers. On August 13,1997 >I
entered a market order for 20 contracts for a GE Sept70 call (Gein)
>with a cash balance in my account of $4,200.00. Not only did they >spend
all of my account balance but went $440.00 over.
> << BIG snip >>
>Needless to say my account at schwab is in the process of being
closed >and those crooks won't have a chance to do this again to me.
RTer's & James Gainer,
Yes, I have to admit to everyone, I DO business with Charlie (Schwab)!
But I don't think it's sooo bad. Yes, I've also been known to make a
few (?)investment errors in the past.. and Yes, I've seen screw-ups, but
...per your query re: schwab trading...
Previous posts have made note that policy is the rules everyone agrees
to play by; (it was in the account papers that Jim signed). Here's a
few more questions that I'd like to have definitive answers for:
------------------------------------------------------------------------
1) Rhetorically: You say you're a 'trader' and you 'forgot'
commissions?
(Does a foot soldier forget ammo? Does a pilot forget to check his/her
fuel?)
2) The GE Sept70 Call purchase price was what(?) for Aug 13? Not that
it's critical to 'your side' of the story, but it may indicate the
severity of your loss. I just wonder why that info wasn't in the
original post?
What was the trend of the underling security? Were daily or
intraday
charts (abeit 15 min delay) part of your 'planning' strategy? I
KNOW
they ARE available on / through the Schwab web page.
3) You say $4.2K Cash was in your account, but what was total value of
the account or the total value of your other securities? Again,
this wasn't stated. Schwab offers a debt card on accounts over $5K; when
they first said you were 'over-extended', were you able/willing to
ask for credit?
Maybe they didn't TELL you that you were over-extended! Did you
really expect them to personally call you on day one ?? Schwab ALWAYS
gives a unique order number to the customer, to verify status -
pending, filled or canceled. Didn't you check your order status by
phone or the internet? The net ALWAYS shows the amount of the
transaction AND the commission.
Perhaps the 20% discount for using the web page order system wasn't
large enough for you, huh?
If your order was from the web page, I bet they could have verified
the transaction funds (or lack of) via computer much sooner.
4) What was the asset percentage of your single 20 call trade? 10% 50%
or 105%? ie: What is/was your asset management strategy?) Maybe
this doesn't apply to equity investors in a bull market <g>, but if
you're into 'future' calls and puts, perchance you may wish to read up on
the subject.
5) Why 20 contracts? Why not buy 50 or 100? ...if Schwab was 'supposed
to' cancel your order in-stead-of receipt and execution of it in
good faith?
Lets see, did you say you had a chance to 'put-up' only $440 to
'make
good' on a $4200 transaction (9.54%), which could/should have
netted
more than $440 ... Did you say you 'turned-down' this offer to
satisfy your overage on your account? ... that you could not come up
with $440 immediately, 7 days after your transaction?
6) Are you familiar with the different strategies with options? Why
did you not also SELL a higher class Call, say a Sept'80? It would have
put some money INTO your account and reduce your total dollar risk.
(Warning: they charge commissions for selling calls too!)
7) You say you were notified ONE WEEK later (Aug 13 to Aug 20th) after
NOT confirming, checking or verifying your order status?
There are difference 'policies' between equities and commodity
trading: Your 'cash basis' for options may only apply to commodities
not necessarily to underlining equities. Commodities may be
'immediate' to 3 days for any margin calls, not 3-5 days for security
accounts. Margin is 50% for all equities...only 5%-10% for commodities.
et ceteria...
... and now you are 'informing' (and whining) to RTer's on
EMail dated September 4th?
8) Terminology: a customer buys or sells something with a
dealer/broker.
The customer 'spends' money - a transitive verb. The dealer broker
may 'take-out' or debit your account for the value of the AGREED
price of the prevailing transaction. Did you say 'Market Order' and
'they spent' in the same message? ... do you know what these words
mean?
9) I called Schwab. They say they have a phone number and salaried
people to receive trading complains and to affect/negotiate
reasonable solutions. (It's law that ALL exchanges have a board of
resolution for complaints.) Did you ask for that number? Did you call
that number? What did they say? Further more...
...why do you still disagree with your actions and their decisions?
10) Everyone has made a bad trade at some time. (Some bigger, some
smaller). Do you really expect satisfaction or sympathy by calling
someone a bandit or crook and by not giving a full accounting of what
really happened ?? Per chance he protests too much? ... the
one-about-a-double-standard !
-----------------------------------------------------------------------
I've held securities since I was in highschool (35 yrs). I
currently have two accounts at Charlie's house. (My wife has two also.) I've
been in commodities for only 4 years. Currently I am studying to
take the Series 3.
Mr. Gainer does not state the length nor nature of his previous
trading experiences, BUT he DID ask my opinion. Alas, I've only
questions for him! Granted, it was not nice - but it might be
questions that new-comers, new investors and speculators (who also
read from this group) may have to ask themselves in their trading
program. This is the mission statement of this group, is it not? ... to
learn from others who have been there?
Thank you for the platform.
Jim K. comtrader@xxxxxxx
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