Market Drop Highlights Brokerage Differences

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Ian S

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The bulk of my investable assets is split between TDAmeritrade and Fidelity. I have smaller accounts at Vanguard and Scottrade (which has been acquired by TDAmeritrade.) I'm planning to consolidate and was assuming I would just let the Scottrade assets automatically be transferred to TD when Scottrade goes away and at some point transfer my Vanguard IRA to Fidelity.

But I'm a bit concerned about how Fidelity has responded to the recent market drop. A freind of mine who only uses Fidelity apparently was unable to access his accounts online on Monday. Did anyone else have this issue with Fidelity or any other brokerage? The other thing that annoys me is that my friend and I are both restricted by Fidelity from trading in the ETF SVXY which is an inverse volatility vehicle which lost value big time when volatility spiked. Neither Scottrade nor TDAmeritrade have the same restrictions on trading this vehicle. Yes, I KNOW the risks involved in something like SVXY (for its competitor, XIV, an ETN, the volatility spike has turned out to be an extinction event and it will liquidate later this month.) I have made money trading SVXY in the past and am careful in how I do it. So why does Fidelity see fit to act like a nanny in this situation? I also wonder what other stocks and vehicles they restrict investment in?

I will probably ask my Fidelity rep but am interested in others' experiences with their brokers this week. Did you have any issues? Does your broker prevent you from trading SVXY or any other stocks?
 
No problem with accessing either of my major brokerage accounts, one being Fidelity.

I did buy SPY through Fidelity on Monday; have never traded the SVXY.
 
No problem here with Fido on Monday. I was in doing a ROTH conversion. No delays and everything worked fine.
 
Fidelity doesn't want you to trade svxy?

https://www.girardgibbs.com/proshar...cYCsYzf7R39pkdFSdacdu5hXBHb5_B_xoCJKkQAvD_BwE


Can't imagine why? Anytime fido said I could not trade something there's a reason. Last time that happened to me the underlying security went paws up shortly after.

As far as outage, yes they had one. OK, so what? My data is still there and safe.

I'm probably jaded as it used to be my phone ringing on days like Monday. Sometimes stuff happens and the best plans go awry. Could be related to volume, could be an appropriate row level database lock that was escalated to a table lock because of a vendor issue. Could be a million other things.

One things for sure in my mind, it's Fidelity's issue not mine. I've seen what happens in financial services organizations when outages and issues occur. It makes or breaks people, systems, technology, and vendors. I'll say I'm sure all of Fidelity's appropriate technology people and their providers are quite aware of the issues and what they'll do next time.
 
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One thing I noticed missing on the front page of my Fidelity home page were my o/s accts(PenFed cd's). Those are added to my Fidelity numbers giving me a combined total of the two. I sent Fid an email asking why that info was dropped and they said it was to help load the page easier during the extra load they had experienced the last couple of days. Also said it would return when things settled down. Not a big deal but I was just curious....
 
MRG said:
Fidelity doesn't want you to trade svxy?

https://www.girardgibbs.com/proshar...cYCsYzf7R39pkdFSdacdu5hXBHb5_B_xoCJKkQAvD_BwE


Can't imagine why? Anytime fido said I could not trade something there's a reason. Last time that happened to me the underlying security went paws up shortly after.
Click to expand...
Pffft! An ambulance chasing law firm is "investigating." Lots of law firms investigated Equifax when it was hacked but I don't recall Fidelity deciding on its own to "restrict" its customers from trading the stock. Maybe Fidelity is after a clientele that prefers a little coddling but it'd be nice to know that in advance. As for the outage, clearly the last few days have represented a stress test of sorts and IMHO, Fidelity looks to have come up a bit short compared to its peers. Maybe it has something to do with Fidelity's history as primarily a mutual fund house while other firms like TDAmeritrade and Scottrade have always been stock brokerages.

In any event, I'll certainly keep my TDAmeritrade account and perhaps limit my Fidelity investments to mutual funds which they do pretty well.
 
mpeirce said:
No problem here with Fido on Monday. I was in doing a ROTH conversion. No delays and everything worked fine.
Click to expand...

Same here. I did a little buying Monday afternoon in my FIDO account and had no problem logging in and doing business. Everything seemed quite normal.
 
Schwab was slow but working. As fast as things were moving Monday that could have easily cost (or made) me thousands.
 
Ian S said:
The other thing that annoys me is that my friend and I are both restricted by Fidelity from trading in the ETF SVXY which is an inverse volatility vehicle which lost value big time when volatility spiked. Neither Scottrade nor TDAmeritrade have the same restrictions on trading this vehicle. Yes, I KNOW the risks involved in something like SVXY (for its competitor, XIV, an ETN, the volatility spike has turned out to be an extinction event and it will liquidate later this month.)
Click to expand...

There's a subreddit on XIV.
It includes the following:
pixelrebel said:
When I bought XIV at $95 today, I received a warning from my broker along the lines of "Either you are really stupid, or you are too smart to be using Vanguard. You really shouldn't buy this sh**, but we'll sell it to you anyway you dumb f***." click, buy.
Click to expand...

pixelrebel said:
I was really smart from 3:15p-3:45p today. Then I was made a retard by 8pm.
Click to expand...

And one young gunslinger lost $4 million

Credit Suisse is killing it off.
 
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adrift said:
There's a subreddit on XIV.
It includes the following:




And one young gunslinger lost $4 million

Credit Suisse is killing it off.
Click to expand...
That's fine. I don't mind a warning about the risks. But prior to the big selloff, Fidelity DID allow trading in these vehicles. Restricting it AFTER the damage has been done is kinda like closing the barn door after the horse has escaped. SVXY has apparently survived and being the only show in town now, may last indefinitely. I have bought a small amount and will see how it does. BTW, I have been studying volatility and the various volatility instruments for five years and have made a significant profit along the way. That said, I have not owned any for at least two years.
 
I don't remember trying to access Fidelity at that time, so can't say if the Fidelity site was hard to get on or not. Being an investor is not easy if one is easily influenced by market swings. There are brokerages that cater more to traders. I do have Fidelity as one of my accounts. Each brokerage I feel offers a little something different.

That is why I have more than one brokerage. Depending on what I need determines which brokerage I have with certain accounts so I can make the decisions I need to make without restrictions.
 
UnrealizedPotential said:
... Being an investor is not easy if one is easily influenced by market swings. ...
Click to expand...
+1 While it's certainly not a good thing if traders cant access their accounts, it is not something that concerns me in the least. It never even occurred to me to trade on Monday (or any other recent day) anyway. Our last trade of any portfolio significance was about 14 months ago.

Our next trade of significance will probably occur if/when we see a serious correction, like 20-30%. Then we're equity buyers, probably VTWSX.
 
OldShooter said:
+1 While it's certainly not a good thing if traders cant access their accounts, it is not something that concerns me in the least. It never even occurred to me to trade on Monday (or any other recent day) anyway. Our last trade of any portfolio significance was about 14 months ago.

Our next trade of significance will probably occur if/when we see a serious correction, like 20-30%. Then we're equity buyers, probably VTWSX.
Click to expand...
Right, I don’t care if I miss a one day 20% move and when volume is high enough that trading is not working smoothly I’m happy to stay way. I have a life to lead and being a slave to the ticker is not part of it. If it’s bad enough it’ll stay down for a while and I’ll have plenty of time to rebalance.
 
Had no trouble on any day going into my Fidelity Acct. But just to look, not to solidify any losses... :facepalm:

Has anyone else noticed an increase in radio adds for Online Trading Academy and some "primarily annuity" retirement planning firms? I get so tired of the really pitiful guy/gal talking about how they "lost everything they had" in '08/'09.
 
Pilot2013 said:
... I get so tired of the really pitiful guy/gal talking about how they "lost everything they had" in '08/'09.
Click to expand...
Try public radio. I haven't heard a radio commercial in years. :) If you don't like your local stations, there are hundreds of them streaming on the internet. The only disadvantage is that their presidential candidate lost the election and they are still not over it.
 
Took two tries to login to Fido Monday at 10 and 10:30 EST. Life went on. No problems today.
 
Had no problem getting on Fidelity or TD Ameritrade web sites all this week. I bought equities on both sites this week with no problem.
 
Ian S said:
So Fidelity is a "nanny" after all: https://www.bloomberg.com/news/arti...-investor-purchases-of-three-vix-focused-etfs

And yes, it's a case of closing the barn door after the horse is gone except it's worse. Folks who want to get into SVXY at the best time (while volatility is spiking) can't.
Click to expand...
I don't know anything about SVXY, but could the issue be counterparty risk rather than nanny-ism? In the housing crash, the government had to prop up AIG because they had a huge liability as counterparty to credit default swaps and could not possibly have made good on them without help. Presumably people have learned to worry about that now.
 
Found this news article regarding Fidelity restricting access. The article also states "In order to buy these funds at Fidelity in the first place, customers need to sign a designated investment agreement and must have "most aggressive" risk tolerance registered on Fidelity.com, the brokerage said. ". The OP didn't mention signing a agreement or registering.

https://www.cnbc.com/2018/02/09/fid...investors-from-blowing-up-their-accounts.html
 
I would assume that any serious Fidelity trader would be using Active Trader Pro rather than the web site.
 
Ameritrade has a far better approach. Let an investor buy what they want to buy, but don't allow it to be bought on margin (100% maintenance requirement).
 
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