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I believe this is to punish RH for offering zero commissions. Especially on options. I seriously think what RH offers, for anyone who’s traded options on the re

I believe this is to punish RH for offering zero commissions. Especially on options. I seriously think what RH offers, for anyone who’s traded options on the retail side, is a game changer.

cj 6y ago
Sometimes what's good for the 1 person isn't good for everyone. For example, if a bank starts giving out 0% interest 100 year mortgages (with some fine print that gives them some obscure revenue source to make it possible for them to make such an appealing offer) the bank should still get in trouble in my opinion if the consumer isn't informed about how they're getting such an amazing deal, because you're removing the consumer's ability to make an informed decision.
- ehejsbbejsk 6y ago
  I know what you want to say but that’s an awfully bad example. I would take out that loan 10 times over.
  - ac29 6y ago
    So would everyone else, and it would massively push up the price of housing. I think that was the point.
  - jellicle 6y ago
    I believe for this example to be correct, the bank would also be hiding in its documentation that you have to pay an annual $100,000 mortgage paperwork fee for this 0% loan.
eru 6y ago
Alas, for most people, especially retail and even more especially options, it's better if they trade less.
- ehejsbbejsk 6y ago
  Govt cannot be an arbiter of what people do with their money. Period.
  - eru 6y ago
    I have sympathy for that sentiment, but in practice that train has long left the station. My own comment wasn't a plea for government to interfere, btw. Just a cynical admission that active trading is bad for the vast majority of people. (My own money is sitting in the most boring ETF I could find, but loaded with about 3x leverage. Given the regulatory requirements of the industry I work in, I wouldn't be allowed to trade actively anyway, but I don't feel like I'm missing out.)
bagacrap 6y ago
The article states that RH cost its consumers more in bad trade execution than it saved them in commissions. How are you sure this didn't happen to you?
- ehejsbbejsk 6y ago
  I trade in multiple platforms and I put in limit orders (RH doesn’t even allow market afaik). To be fair, I am probably not your typical trader since I’ve been a fintech developer in the past as well as have been involved in analyzing many SEC cases for/against major financial institutions. I will say this: it’s extremely hard to prove execution quality on options trading let alone doing it in 2020 when the market was so volatile.
  - deleted 6y ago
    [deleted]
- renewiltord 6y ago
  RH doesn't offer market orders on options. So GP never got a worse price than he was willing to pay.
ummonk 6y ago
Interactive Brokers was offering near-zero commissions already.

I believe this is to punish RH for offering zero commissions. Especially on options. I seriously think what RH offers, for anyone who’s traded options on the retail side, is a game changer.

cj 6y ago

Sometimes what's good for the 1 person isn't good for everyone. For example, if a bank starts giving out 0% interest 100 year mortgages (with some fine print that gives them some obscure revenue source to make it possible for them to make such an appealing offer) the bank should still get in trouble in my opinion if the consumer isn't informed about how they're getting such an amazing deal, because you're removing the consumer's ability to make an informed decision.

ehejsbbejsk 6y ago
I know what you want to say but that’s an awfully bad example. I would take out that loan 10 times over.
- ac29 6y ago
  So would everyone else, and it would massively push up the price of housing. I think that was the point.
- jellicle 6y ago
  I believe for this example to be correct, the bank would also be hiding in its documentation that you have to pay an annual $100,000 mortgage paperwork fee for this 0% loan.

eru 6y ago

Alas, for most people, especially retail and even more especially options, it's better if they trade less.

ehejsbbejsk 6y ago
Govt cannot be an arbiter of what people do with their money. Period.
- eru 6y ago
  I have sympathy for that sentiment, but in practice that train has long left the station. My own comment wasn't a plea for government to interfere, btw. Just a cynical admission that active trading is bad for the vast majority of people. (My own money is sitting in the most boring ETF I could find, but loaded with about 3x leverage. Given the regulatory requirements of the industry I work in, I wouldn't be allowed to trade actively anyway, but I don't feel like I'm missing out.)

bagacrap 6y ago

The article states that RH cost its consumers more in bad trade execution than it saved them in commissions. How are you sure this didn't happen to you?

ehejsbbejsk 6y ago
I trade in multiple platforms and I put in limit orders (RH doesn’t even allow market afaik). To be fair, I am probably not your typical trader since I’ve been a fintech developer in the past as well as have been involved in analyzing many SEC cases for/against major financial institutions. I will say this: it’s extremely hard to prove execution quality on options trading let alone doing it in 2020 when the market was so volatile.
- deleted 6y ago
  [deleted]
renewiltord 6y ago
RH doesn't offer market orders on options. So GP never got a worse price than he was willing to pay.

ummonk 6y ago

Interactive Brokers was offering near-zero commissions already.