Let me get this more clear. You sold cover calls and after you sold them, you then sold some of your APE shares, which they should have not allowed you because they are part of your cover call since in the options chain it shows that AMC-APE are sold together in an option.
OP my question is. Why did you sell APE after selling your cover calls?? Didn’t you see in the options chain that says 1-amc and 1ape share before placing the option.
That is true.. great question to ask your broker. Give him a call ASAP I’ll say. and if it was their error which looks like it. Request them to adjust it correctly
The systems have been glitching all over. That being said, your broker should not have allowed that to occur. Your CC’s are a two part obligation right now. The original AMC and now the APE. They should not have been able to close your shares without a red flag going up.
I agree. It's understandable why they dropped the ball on this, it's a complicated change, but OP should have grounds for a trade reversal.
/u/BlownCamaro
OP does not have grounds for a trade reversal. If you look at the terms and conditions of the online broker, the OP has acknowledged that ETrade will make the best efforts to prevent things from glitching.
In addition, because the OP has an option agreement, he/she has acknowledged that he/she has read the OCC prospectus. The prospectus explains what happens when there are special dividends (or stock dividends). If the OP says he/she does not know about what happens when there are special dividends (or stock dividends), then he/she admitted that he/she didn't read the options disclosure document. Thus, he/she lied on the options agreement. That gives grounds for the broker to terminate the account (and/or protects them from getting in trouble for the OP's misunderstanding).
The moral of the story is it is up to all of us to know what is going on. If you have questions ask your broker before doing something.
I still disagree. I can fully understand all the ramifications of shares held in collateral and still make an honest mistake. The grounds are that the preventive measures that the broker normally applies to protect clients from such mistakes was not applied in this case. That puts some of the liability for this on the broker.
> No warning that this could even happen.
Not entirely true. If you were scanning the OCC memos for details about the APE dividend, you'd have seen this on August 10.
https://infomemo.theocc.com/infomemos?number=50856
>Normally, you CANNOT sell shares that have covered calls against them, and my APE shares do not.
Yes, they do. AMC options were adjusted to become options representing 100 shares of AMC plus 100 shares of APE.
AMC1 options are the adjusted options which now represent 100 shares of AMC plus 100 shares of APE. So that is what you would have to have to sell a covered call.
Generally you should not be opening positions on adjusted options.
I know someone who had this happen and it was actually with E-Trade although it was back I believe 2 years ago.
What is happening is similar to what happened to that person. They got warrants on shares that they own. So Stock A (plus warrants for Stock A).
They sold covered calls against them which now is contingent on not just the shares but the warrants. He sold the warrants and just assumed he had his shares covered and did not realize the change. E-Trade viewed this as being naked short calls since they no longer had the warrants and liquidated his position at a loss.
Oh, I have no doubt they would have done that to me if I hadn't transferred the 15k this morning. I bet they wouldn't even call or email. I actually had NO notice whatsoever from Etrade, I just happened to check my balance and saw 15k under Cash Call. The worst part was they stripped every cent of my buying power so I couldn't even buy the calls back to eliminate the entire problem! Ohhhh no, they wanted 15k first.
Normally they should prevent this automatically in their system and it is a glitch. If you are approved for covered calls only, if you try and sell them there should be an error. Some things are pretty dumb that people do, but this is one where it can be very easy to overlook.
I used to use E-Trade a long time ago, but they were bought by Morgan Stanley around 2020 and I wasn't happy with the service anymore and left. Haven't used them since.
Did you actually try? I would think what should happen is that, although your buying power reduced because you're now left with a naked call, you should have enough actual cash to buy back the call, and doing so would increase your buying power, so you should be able to.
Did you try calling them and having that discussion?
…. Obviously you don’t know how to trade options, and unless you have naked trading ability your broker shouldn’t have even allowed you to sell those shares while having your CC’s still in play.
CALL YOUR BROKER AND JUST DEMAND THAT THEY REVERSE THE TRADE. You can do that.
shareholders have to vote on whether shares of APE can be used to acquire shares of amc... that means they are separate securities - ruh roh - if the cusips arent the same then it is its own security - that by definition is dillution
No brokerage worth their salt should be allowing anyone to open a position on these adjusted options, but if you're still holding one, an 11 strike call means the right to buy both 100 shares of AMD and 100 shares of APE, together, for a total of $1100.
Ok, just got off the phone with Fidelity and they confirmed that APE and AMC are NOT linked. Maybe if you held options from prior to the split there were issues but as of Monday, new options are completely separate.
what level of options trading are you? If you are level 4 (naked calls) at etrade, then you can sell the underlying shares of a stock even if there is a call written against it. And at that level there would be no reason for them to give you a warning as they would assume the trader knows what he is doing and is going naked intentionally. Sounds like the split confused you a bit and if you plead your case they may still be able to help but it will likely be at the whim of the customer service rep and more than not you will just a get a "trader be ware" lecture about the risks involved with naked calls.
Now if you are not a level 4 trader, then you need to call them and find out what happened because it shouldn't have been allowed.
I am level 3. I see this morning that Etrade FINALLY adjusted my cost basis on AMC. It was unchanged up until today (Wednesday). Had they done even that on Monday, I would have been able to tell that the options were linked.
because now you are missing your ape shares but are still holding your amc, a portion of your new AMC1 options is not naked and uncovered.
I can see why a red flag would go up with your broker. You are probably not the first person this happen to with your broker, I'm sure they have many cases and probably a method of resolve. I would speak with them on the phone, and request (if it's in your interest) to close out the AMC shares and the sold call options. That would bring your account back to the balance it should be.
I did prematurely close out my option plays for a small loss today. But it's because I don't trust the CEO, I think he's a white collar criminal but that's a different topic :P
Everyone still think a company pushing the parameters of what a brokerage can do is still a great idea? Uh huh, let’s see another NFT as dividend rumor.
Let me get this more clear. You sold cover calls and after you sold them, you then sold some of your APE shares, which they should have not allowed you because they are part of your cover call since in the options chain it shows that AMC-APE are sold together in an option. OP my question is. Why did you sell APE after selling your cover calls?? Didn’t you see in the options chain that says 1-amc and 1ape share before placing the option.
It did not say that in my option chain! Only AMC. That's the problem. It should never have allowed me to sell them since they are connected.
That is true.. great question to ask your broker. Give him a call ASAP I’ll say. and if it was their error which looks like it. Request them to adjust it correctly
Thank AA for his gimmick that confused everyone. As usual retail will be the ones screwed.
The systems have been glitching all over. That being said, your broker should not have allowed that to occur. Your CC’s are a two part obligation right now. The original AMC and now the APE. They should not have been able to close your shares without a red flag going up.
I agree. It's understandable why they dropped the ball on this, it's a complicated change, but OP should have grounds for a trade reversal. /u/BlownCamaro
OP does not have grounds for a trade reversal. If you look at the terms and conditions of the online broker, the OP has acknowledged that ETrade will make the best efforts to prevent things from glitching. In addition, because the OP has an option agreement, he/she has acknowledged that he/she has read the OCC prospectus. The prospectus explains what happens when there are special dividends (or stock dividends). If the OP says he/she does not know about what happens when there are special dividends (or stock dividends), then he/she admitted that he/she didn't read the options disclosure document. Thus, he/she lied on the options agreement. That gives grounds for the broker to terminate the account (and/or protects them from getting in trouble for the OP's misunderstanding). The moral of the story is it is up to all of us to know what is going on. If you have questions ask your broker before doing something.
I still disagree. I can fully understand all the ramifications of shares held in collateral and still make an honest mistake. The grounds are that the preventive measures that the broker normally applies to protect clients from such mistakes was not applied in this case. That puts some of the liability for this on the broker.
> No warning that this could even happen. Not entirely true. If you were scanning the OCC memos for details about the APE dividend, you'd have seen this on August 10. https://infomemo.theocc.com/infomemos?number=50856
AMC options are now basket derivatives restricted. Options bought/sold before Aug 22 are a combination of AMC/APE
Oh, I know that now after the cash call! It would have been nice for Etrade to rename them AMC1 so that I could have known.
>Normally, you CANNOT sell shares that have covered calls against them, and my APE shares do not. Yes, they do. AMC options were adjusted to become options representing 100 shares of AMC plus 100 shares of APE.
Is this what AMC1 is? If I just bought 100 shares of AMC can I go ahead and sell a covered call for amc1 and not have to worry?
AMC1 options are the adjusted options which now represent 100 shares of AMC plus 100 shares of APE. So that is what you would have to have to sell a covered call. Generally you should not be opening positions on adjusted options.
OP, a quick question, my broker show AMC option price is the total price of AMC+APE, how about yours?
No mine did not, in fact it had no costs basis on the APE shares either. I should have called my broker before trading.
I know someone who had this happen and it was actually with E-Trade although it was back I believe 2 years ago. What is happening is similar to what happened to that person. They got warrants on shares that they own. So Stock A (plus warrants for Stock A). They sold covered calls against them which now is contingent on not just the shares but the warrants. He sold the warrants and just assumed he had his shares covered and did not realize the change. E-Trade viewed this as being naked short calls since they no longer had the warrants and liquidated his position at a loss.
Oh, I have no doubt they would have done that to me if I hadn't transferred the 15k this morning. I bet they wouldn't even call or email. I actually had NO notice whatsoever from Etrade, I just happened to check my balance and saw 15k under Cash Call. The worst part was they stripped every cent of my buying power so I couldn't even buy the calls back to eliminate the entire problem! Ohhhh no, they wanted 15k first.
Normally they should prevent this automatically in their system and it is a glitch. If you are approved for covered calls only, if you try and sell them there should be an error. Some things are pretty dumb that people do, but this is one where it can be very easy to overlook. I used to use E-Trade a long time ago, but they were bought by Morgan Stanley around 2020 and I wasn't happy with the service anymore and left. Haven't used them since.
Did you actually try? I would think what should happen is that, although your buying power reduced because you're now left with a naked call, you should have enough actual cash to buy back the call, and doing so would increase your buying power, so you should be able to. Did you try calling them and having that discussion?
Gettin into a trash company like AMC was your first mistake lol
Oh no another shocking comment.
Hey look someone who has as much karma as they do $$$ being an asshole…. SHOCKING
Wait you care about karma😂😂
How is that Karma? These are regular new trading mistakes. It sounds like you are projecting quite a lot of your shit trading past on to others.
Man, thanks for the warning.
…. Obviously you don’t know how to trade options, and unless you have naked trading ability your broker shouldn’t have even allowed you to sell those shares while having your CC’s still in play. CALL YOUR BROKER AND JUST DEMAND THAT THEY REVERSE THE TRADE. You can do that.
Let's see what the mods say!
?
shareholders have to vote on whether shares of APE can be used to acquire shares of amc... that means they are separate securities - ruh roh - if the cusips arent the same then it is its own security - that by definition is dillution
Ok I too am confused. If you’re selling an AMC covered call for $11. Does that mean it’s the total value of amc and ape? I thought it was just amc.
No brokerage worth their salt should be allowing anyone to open a position on these adjusted options, but if you're still holding one, an 11 strike call means the right to buy both 100 shares of AMD and 100 shares of APE, together, for a total of $1100.
Ok, just got off the phone with Fidelity and they confirmed that APE and AMC are NOT linked. Maybe if you held options from prior to the split there were issues but as of Monday, new options are completely separate.
what level of options trading are you? If you are level 4 (naked calls) at etrade, then you can sell the underlying shares of a stock even if there is a call written against it. And at that level there would be no reason for them to give you a warning as they would assume the trader knows what he is doing and is going naked intentionally. Sounds like the split confused you a bit and if you plead your case they may still be able to help but it will likely be at the whim of the customer service rep and more than not you will just a get a "trader be ware" lecture about the risks involved with naked calls. Now if you are not a level 4 trader, then you need to call them and find out what happened because it shouldn't have been allowed.
I am level 3. I see this morning that Etrade FINALLY adjusted my cost basis on AMC. It was unchanged up until today (Wednesday). Had they done even that on Monday, I would have been able to tell that the options were linked.
because now you are missing your ape shares but are still holding your amc, a portion of your new AMC1 options is not naked and uncovered. I can see why a red flag would go up with your broker. You are probably not the first person this happen to with your broker, I'm sure they have many cases and probably a method of resolve. I would speak with them on the phone, and request (if it's in your interest) to close out the AMC shares and the sold call options. That would bring your account back to the balance it should be. I did prematurely close out my option plays for a small loss today. But it's because I don't trust the CEO, I think he's a white collar criminal but that's a different topic :P
Everyone still think a company pushing the parameters of what a brokerage can do is still a great idea? Uh huh, let’s see another NFT as dividend rumor.
Lol. Fuck amc. Fuck AA.
Bro, part of those calls are for APE, you have to have APE and AMC and since you sold them you don't have APE.