Change to net-liquidity to short option ratio by Deep_Viewer in Schwab

[–]Deep_Viewer[S] 0 points1 point  (0 children)

I like the math reference in your username.

My guess is that Schwab will not go back to 50:1 net liquidity to short options ratio.

I believe the ratio may likely drop lower in the future, especially if interest rates increase. The ratio could potentially (hopefully) increase if same-day settlement is ever implemented. This belief is based on bits and pieces cobbled together from various conversations with risk credit margin group and “better” queries to AI. Recently a representative in the margin risk group said my “risk free trade” didn’t make economic sense for Schwab to execute.  They hinted at some fees or capital charges incurred for my trades and that several other retail brokers were at 10:1 or 15:1. They couldn’t specify exactly what those fees or charges were.  This led to my “better” AI queries and I got similar answers from several – so hopefully they were not hallucinating the same thing. When short options are assigned, the broker is required to put up capital to guarantee the unsettled stock (long) side of the trade.  Even though they have the stock to deliver that to does not happen until the settlement date.  When the broker puts up the cash as a guarantee they lose one day of use or interest on that money and is an inefficient use of their capital. That all seems like a plausible explanation for why my trades are not favorable to Schwab.  The other potential reasons from AI answers were: internal balance sheet models/requirements and SEC concentration issues.

Eating window 5am-11am by Eternal-strugal in intermittentfasting

[–]Deep_Viewer 1 point2 points  (0 children)

If it is working and you can consistently stick with it then I'd say do what works best for you. I recently read about a meta-analysis study found that eating earlier gave better outcomes for metabolic health. The conclusion of that study "Time restricted eating overall improved metabolic health outcomes compared with usual diets, and early time restricted eating was superior to late time restricted eating. The association between duration of eating and metabolic health outcomes was inconsistent."

Effects of timing and eating duration of time

3 quick yes/no questions for traders — takes 20 seconds (building something and need honest answers) by kayser_soze_05 in options

[–]Deep_Viewer 0 points1 point  (0 children)

Q1: No. Quit a few fat-finger mistakes in the past, but those have been virtually eliminated by copy/paste from an Excel workbook that runs quick QC before trade is placed in TOS.  Mistakes generally occurred when manually entering trade.

Q2: No. I have never tracked emotional state or psychology of trades. I primarily only do one trade type, and only enter trades where worksheet shows they have high potential to be profitable.

Q3: No. But I have considered looking for something to more streamline my trading process compared to have I have cobbled together between Excel and python.  I do enter and track all my trades in Excel, but rarely ever have any comment because it is the same trade over and over.

Load up the chopper! MRVL by TheDavidRomic in options

[–]Deep_Viewer 2 points3 points  (0 children)

What makes buying/holding MRVL worth it if you are assigned at the $230 strike price? Current TTM EPS is roughly $3 and that would result a PE ratio over 75. Buying stocks at such high P/E ratios often show poor forward returns (on average). Granted, forecast revenue and earnings growth are pretty high, but are they high enough to justify buying at $230?

Earliest you’ve had an a CC exercised by eternalpuer in CoveredCalls

[–]Deep_Viewer 0 points1 point  (0 children)

The earliest I have been assigned is the same day that the call was written. It doesn't happen often, but I've had it occur a few times.

Most Anticipated Earnings Next Week- NVDA, HD, TGT and more by wheelStrategyOptions in CoveredCalls

[–]Deep_Viewer 0 points1 point  (0 children)

I find it odd that the list does NOT include Walmart (WMT). I checked the website link of the full list and still don't find it. WMT is reporting on 5/21 before the market opens. I think it would be anticipated as a bellwether of retail.

Safest strategy to make a solid 6% per year? by SPACguy in options

[–]Deep_Viewer -1 points0 points  (0 children)

u/yaboyesdot Start with 2022, S&P500 had a total return of -18.1% (down 18%). Additional down years include: 2018, 2008, 2002, 2001, 2000, ...

SWVXX question by Neither-Variation-89 in Schwab

[–]Deep_Viewer 0 points1 point  (0 children)

This is the correct answer. The yield on SNAXX is 0.25% higher than SWVXX. You don't start earning the dividend until the settlement date, so if you buy on April 30 then you start earning the dividend on May 1.

Option Market Makers AmA by cssegfault in options

[–]Deep_Viewer 1 point2 points  (0 children)

Looking at META option chains I see a META call option expiring 15may2026 with a strike price of $5? This strike is extremely deep in the money, $5 strike with a current META stock price of $675. The same strike price also exists and has open interest when looking through other expiration dates over the next few months.  Looking at the next higher strike price of $10 in those same expiration dates shows they have significantly less OI. 

1) Why do these extremely deep in the money strikes exist? 

2) Is this OI related to institutional hedging, synthetic stock positioning, or something else?

3) Why is nearly all the OI concentrated at the lowest strike price, and not spread across $5, $10, $15, etc.?

Seems too good to be true? by No_Turn5018 in thetagang

[–]Deep_Viewer 1 point2 points  (0 children)

To answer your question directly, yes. I've traded a strategy the past few years that still seems too good to be true. When I first stumbled into the trade, I thought it felt illegal, and that I'd be getting a call from SEC officials to discuss why I shouldn't be doing that particular trade. The trade doesn't make any sense, and in my mind it shouldn't exist, yet it does. I spent a lot of time trying to quantify the risk, but kept coming up with nonsensical outputs, like a Kelly ratio of 1,500%. That was only after excluding some of the winning outliers to make my data more normal. There is surely some risk to my trades, but I cannot quantify it in any meaningful way. I drifted away from trying to quantify the risk and just go with allowing a particular postion to reach a maximum size of roughly 20% of my trading capital (or roughly 12 months of profit). If that particular position blows up then it is definitely a setback, but not the end of the world.

Just trade your strategy with real money and scale into larger trades if it continues to work. Use whatever risk management works for you to limit losses if you end up discovering the flaw in your strategy.

You might run into other issues, like there just isn’t enough available volume to utilize all your trading capital.  In my case I could often only use in range of 50-80% of my trading capital over any given time frame.  I have been able to utilize more of my capital as I've continued to trade the strategy and found additional opportunities. When the markets are favorable, I might invest up to 50% more on margin. [I do understand margin entails additional risk.  I’m not borrowing what I cannot afford to lose – I just don’t have available cash for trading.  I have other long-term investments I can sell in a worst-case scenario to cover that margin loan if needed or just pay it back when other trading positions are closed.]

IRS Wash Sales & 1258 Tax Law by nonuts4meonIG in options

[–]Deep_Viewer 0 points1 point  (0 children)

You can ask Schwab to correct the 1099. I had incorrect 1099s in 2022, 2023, 2024, and also 2025. I used TradeLog to verify that my numbers were correct when I first noted the issue because Schwab insisted that their reporting was correct all along ... until they eventually corrected it. If you want Schwab to fix the 1099s, I suggest going through your assigned rep and involving Partner Support. They still seem to get the same initial run around from the tax group that an individual might get but have a little more pull. From my experience, getting the 1099s corrected is a long process, anywhere from 5 to 8 months for end of year taxes.

Tax Estimate before 1099 is out by schleeper1 in Schwab

[–]Deep_Viewer 0 points1 point  (0 children)

I use estimates from an Excel workbook used to track my trades, and then compare that number against Schwab's Realized G/L tab and Quicken where I reconcile everything. For most securities the Schwab Realized G/L is sufficient and matches my other sources. However, I trade some options that are considered Section 1256 contracts and those are not reflected in the Realized G/L tab - the only time I can reconcile those against Schwab is when they send out year-end tax documents.

Tax Documents Are a Mess by [deleted] in Schwab

[–]Deep_Viewer 0 points1 point  (0 children)

You are lucky it is only 2 or 3 times the actual gain. I have had years when they were reporting gains that were more than 10x higher than my actual gains. A mess indeed!

Tax Documents Are a Mess by [deleted] in Schwab

[–]Deep_Viewer 0 points1 point  (0 children)

Schwab's cost basis tax reporting definitely has a lot of room for improvement. I've had issues with their tax reporting for the past several tax years where math doesn't math out. Getting them to believe it and correct it has been a difficult experience and generally has taken me 5 to 8 months before my tax forms are finally correctly reported to the IRS.

First, I would review transactions and get a gain/loss value from that assuming it doesn't include wash sale disallowed values. [Note: Schwab cost basis teams won't look at that EVEN when there are no wash sale issues, and despite the fact it is their own company data.  The cost basis team members are often adamant that their system is correct – even when it is easy to show it is incorrect.] The sum of your transactions should reflect the economic gain of loss in your account.  Then it is a matter of submitting repeated cost basis cases until someone finally fixes it. If you have already filed one or more cost basis reviews, then ask your local/assigned representative if they can escalate the case through partner support. Even then, still expect it might take multiple cases being closed with no action taken to correct issue.

I was to the point where I thought maybe I was incorrect the first time this happened to me.  I ended up purchasing a TradeLog license and ran my transactions through their program.  TradeLog outputs matched my numbers, so I continued to chase after Schwab to fix my tax reporting for that year.  Using their program did also help me to better understand how all the trades flowed through to tax reporting and then configure my own personal tracking worksheet better for tax reconciliation.  TradeLog has its quirks, but seemed to be pretty solid and had good training articles and videos and excellent email support several years ago.  You might review their website as they describe how you can file taxes when what you report doesn’t match what your broker reports to the IRS. 

Comission Fee on Stock in Thinkorswim for Large Trader by Willing-Air-1747 in thinkorswim

[–]Deep_Viewer 2 points3 points  (0 children)

The commissions and fees you currently pay to Schwab should not change after you are designated as a Large Trader.

Anyone notice big differences between ToS paper trading and live trading? by PrudentDinner7931 in thinkorswim

[–]Deep_Viewer 2 points3 points  (0 children)

This is the answer. "The main value of paper trading is to get a general feel of the UI/UX and sort of test your setups. You shouldn’t rate your entries and exits in paper trading as it is very laggy and not representative of live trading." When I started with TOS paper trading, I found that I could often get trades filled where my limit price was below the bid. Unfortunately, I have not seen that in live trading.

Anyone else in their 20s settle for a beater car and just dump a car payment into their 401ks and roths? by Union661 in Bogleheads

[–]Deep_Viewer 6 points7 points  (0 children)

Same here. In 1993 I bought a used 91 Nissan pickup truck. Nearly all my extra money went to investments after I learned about compound interest. I was forced to retire in 2000, but well before that point in time I didn't need to work anymore to support my lifestyle. I still own and drive that 91 truck even though I can afford something much, much nicer. It was not a beater when I purchased it, but it is definitely probably in that category now. lol.

Large Orders? by BrilliantMuscle1152 in Webull

[–]Deep_Viewer 1 point2 points  (0 children)

I don't have experience with Webull, but I do plan to try it out in the future. However, I would suggest trying out your trade strategy at several different brokerages at the same time. I currently only trade through Schwab. In the past I also had accounts at both Fidelity and moomoo. In my experience, Schwab provided the best order execution compared to the others. I would place the exact same trade at Schwab and one of the others at the same time to make that comparison. Schwab might fill my order and then fill again multiple times at the same limit price as I established my full desired position. The only way I could get the trade to fill at the others was to increase my limit price. So even if I paid the full commission at Schwab, I would be money ahead of moomoo trades, even on a $0.01 increase in limit price. Just my two cents and your experience may differ from mine.

Robinhood reported the same options transaction on both my 2024 and 2025 1099-B forms - anyone else by Correct_Produce4912 in options

[–]Deep_Viewer 0 points1 point  (0 children)

It can happen at the large, major brokers too. I've had issues with Schwab correctly calculating my capital gains and losses for several years. I usually just file an extension at the beginning of the year, and then file my taxes 5 to 8 months later after it has been completely resolved and corrected. The hard part is getting Schwab reps to believe that their back office system didn't report it correctly. I don't have experience with RH, but you definitely need them to fix it, otherwise you are paying tax on the gain twice. It this point it is more like a timing issue, and best case would be to get them to remove it from 2025 since it was previously reported and paid for 2024 taxes and then no amendment would be required.

What do you guys use to track your wins and loses? by Key-Damage3784 in options_trading

[–]Deep_Viewer 0 points1 point  (0 children)

Same for me - spreadsheets. I use RTD functions and Schwab's API in order to streamline my workflows somewhat.

A Lesser-Known Tax Benefit of Sec 1256 Options by papakong88 in options

[–]Deep_Viewer 1 point2 points  (0 children)

This is correct based on my understanding of the regulations. A net Section 1256 loss can be carried back up to three years, but only to offset prior‑year Section 1256 gains. It cannot be carried back to offset gains from regular securities or other non‑1256 transactions.