Options traders hit up TD for $8.2M in losses

thinkorswim users file arbitration claim saying that they couldn't get through to execute trades in August

Jan 15, 2012 @ 12:01 am

By Dan Jamieson

TD Ameritrade Inc. has been hit with an $8.2 million arbitration claim by a group of options traders who say that they lost money last summer during the final integration of the thinkorswim trading platform.

The arbitration, filed late last month by two investment funds and five individuals, alleges that during the market drop in August, TD Ameritrade's option-trading system wouldn't accept trades that would have reduced risk.

The traders claim that the firm then sold out positions to meet margin calls, compounding their losses.

“My clients were not able to get through to [TD Ameritrade] in a timely manner” to place trades via phone or chat, said their lawyer, Daxton White, founder of The White Law Group LLC.

All the traders were original thinkorswim clients who traded on a margin account platform that was reserved for the most experienced and active options traders, according to the claim.

TD Ameritrade bought thinkorswim Inc. in 2009, primarily for its options-trading technology.

Representatives of TD Ameritrade declined to comment on the case.


As part of the integration in August, TD Ameritrade shifted thinkorswim's clearing arrangement from Penson Worldwide Inc to its own system.

“I don't know what caused the glitch, but that's exactly when it happened,” Mr. White said.

In response to reports of the glitch, the company said that the problem arose when 250,000 clients were moved to TD Ameritrade, which forced them to place orders by phone.

TD Ameritrade has promoted its options-trading capability to its independent registered investment adviser clients, as well as to individual investors.



What do you think?

View comments

Most watched


Young professionals see lots of opportunity to reinvent the advice experience

Members of the 2019 InvestmentNews class of 40 Under 40 have strategies to overcome the challenges of being young in a mature industry.


Young advisers envision a radically different business in five years

Fintech and sustainable investing are two factors being watched closely by some of the 2019 class of InvestmentNews' 40 Under 40.

Latest news & opinion

SEC clears up confusion over whether advisers can continue to call themselves fiduciaries

Despite an agency directive to eliminate the word 'fiduciary' in Form CRS, SEC officials say it's OK to use it.

InvestmentNews' 2019 class of 40 Under 40

Our 40 Under 40 project, now in its sixth year, highlights young talent in the financial advice industry. These individuals illustrate the tremendous potential of those coming up in the profession.

How to suspend Social Security benefits

Mary Beth Franklin says the move can boost future benefits but advisers and their clients should beware of unintended consequences.

Vermont establishes restitution fund for victims of investment fraud

Portion of settlements with financial perpetrators would supply the pool.

10 IBDs with the most variable annuity revenue

Although the popularity of VAs has declined in recent years, some independent broker-dealers still do a good business in them.


Hi! Glad you're here and we hope you like all the great work we do here at InvestmentNews. But what we do is expensive and is funded in part by our sponsors. So won't you show our sponsors a little love by whitelisting investmentnews.com? It'll help us continue to serve you.

Yes, show me how to whitelist investmentnews.com

Ad blocker detected. Please whitelist us or give premium a try.


Subscribe and Save 60%

Premium Access
Print + Digital

Learn more
Subscribe to Print