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OptionsXpress Fraud and Embezzlement

Company OptionsXpress
Product / Service Options Trading
Location New York, New York
Category Finances
Views 225

Online Options, Stocks & Futures Brokers
311 W. Monroe Street, Suite 1000
Chicago, Il 60606

I make use of a put credit spread strategy on the SPX or the S&P 500 index, and when the SPX drops down to the strike price of the short put I exit the spread.

On 1/22/08 I had a spread of 26 SPX Feb 1300 Short Puts x 26 SPX Feb 1275 Long Puts. I had a trigger point set to 1299 so that if the SPX or the S&P 500 drops below 1299 then immediately my spread should be sent to the floor as a Market Order to close.

However, when I examined the fill report, I found out to my amazement that OptionsXpress triggered my spread closing order not at 1299 as I specified when I setup the contingency order, but at 1275.62 or while the SPX lost another 1.8% of its value. The closing cost was $1,400 per spread put or $36,400 for 26 spread puts, and based on my experience (six years as an active trader of options, and almost exclusively trading options on the SPX) if it was done right I should not have paid more than 10.00 or $26,000 for 26 spread puts even under conditions of high volatility because the long leg counterbalances the short leg which is one of the advantages of trading credit spreads versus naked options.

I notified the OptionsXpress executives of this error, and told them that it is their responsibility to absorb the cost of this $10,400 contingent order late activation error or irregularity, and I was even assured by one of OptionsXpress' Executive Vice President, Phil Bennett, who happens to be the brother of OptionsXpress Current Vice Chairman and Prior CEO, Ned Bennett, 6 years ago when I considered the possibility of a contingent order not activating that OptionsXpress has business insurance for such an event, and I will be made whole in such a case.

To my utter disbelief and bewilderment I found them to turn options theory on its head, and make the outrageous false contention that I would have received the same fill price whether my closing spread Market Order was executed 1 point ITM or almost 25 points ITM on the SPX.

Bernard Laufer MCP, CPA

P.S. Those six letters after my name indicate that I am an Investigative System CPA by profession. It was my job to detect fraud, and catch *** artists as they were engaging in their criminal acts, but I was taken by the OptionsXpress Management Team of *** Artists before I even knew what hit me.

In any case, I suggest that if you have any dealings with this firm then head for the nearest exit metaphorically speaking. An ounce of prevention is better than a pound of cure. Financial *** artists are generally good at what they do, and some are so good at what they do that they up ripping off the public of millions and even of billions of dollars legally as we are well aware of.

As I write this complaint here I already filed a report with the Securities Exchange Committee, and requested that they start a criminal investigation into OptionsXpress' Executive Management fraud and embezzlement of my assets plus I have several other logs in the fire to teach the executive swindlers at OptionsXpress that crime really doesn't pay. I wonder how much this public dispute will end up costing them in lost business! 30810ad

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Jan 23, 2012 
Bad before, Schwab merger makes them not worth the effort
Reply to Medsurg

Nov 22, 2011 
I did a sell at market price and got $ 70,000 in my account. I was wiring the money to my bank account and then the vp called me and told that they have kept the money as it was
a mistake at thye exchange whic is not true I believe. I don't know if I can do anything for that.
Reply to Mathew

Oct 27, 2011 
I've had so many trades where I have checked the live price on multiple sources and have noticed where I have been scammed repeatedly.

Bid / Asks are manipulated systematically.
Reply to Dean

Apr 26, 2011 
We had silver options at 50. The market took a five minute spike around midnight a day ago that put us in margin trouble. OptionsXpress immediately terminated the account at a price of 725; at the end of the 5 minute spike the price dropped to 330 and soon dropped into the hundreds. In situations like this, according to OptionsXpress, we have no recourse because technically we could not meet our margins at the time of the trade. We lost our entire account, around $70,000.
Reply to Richard S

Dec 03, 2010 
Yes we admit we repeatedly do not use the best professional and position OXPS against the interests of our clients
Reply to Fred and Moises and Peter

Oct 03, 2008 
We would like to talk to you.

If you've had an optionsxpress account and have experienced financial loss you will want to read this:

Did you loose more than $10,000 and felt that you've been misled or misinformed by optionsxpress. If so, please contact us immediately with detail of your story or complaint.

Your correspondence will kept private unless you wish otherwise. Please include you name and if you wish to be contacted concerning a class action suit.
Reply to Optionsxpressclassaction

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