Account Restrictions

Any restrictions placed on an account by the brokerage can only be restricted by that brokerage. Restrictions include EM Restrictions (Pattern Day Trader), Good Faith Violation, and Free Riding violation. Please note that all restrictions are imposed by the brokerage, not the Bot Platform, and need to be reconciled with the brokerage.  

Margin Calls

Bots have no knowledge of account type. They only know an allocation amount. All Reg-T requirements and maintenance calls for equity positions bought on margin should be managed through the brokerage platform.

Exceeding Maximum Risk

Bot capital allocation limits are calculated at position entry. Market conditions at position closing may cause increased capital allocations beyond the calculated maximum risk at position entry. If the market is illiquid or bid-ask spreads are wide, bots have the potential to risk more capital at position exit than was allocated at position entry.

For example, if there is a wide bid-ask spread for a credit spread position, the ask price to close the spread may exceed the spread’s width. This is not solely a function of the bots. It is common for a credit spread to move against the trader and display P/L numbers beyond their max loss throughout the course of the trade. Therefore, it is best to consider max risk as the maximum risk at expiration.

As always, you have the ability to manually override positions, SmartPricing settings, exit criteria, and orders at any time. If you manually override a position, the Option Alpha platform no longer communicates with the position, and the position will not count against position limits or capital allocation limits. You may need to re-consider your bot’s capital allocation limit if you manually override positions.

More info on risk at expiration can be found under 'Forced Closures' in Order Handling.

Earnings Changes

Company earnings dates can fluctuate and change on a regular basis for a variety of reasons. It is also common for the time of release to shift from AM and PM. The trader should remain aware of this at all times if they intended to use bots to trade earnings and manually intervene if necessary.

We currently do not provide a solution to differentiate between AM or PM earnings releases.

Ticker Changes

Bots do not automatically update or change to a newly issued ticker in the event of a ticker change. Traders should be aware of all corporate actions that could cause a ticker change to occur for any of the stocks or ETFs they're trading. Please reference the OCC website to review and maintain up-to-date information on any changes that would affect the symbols used within the bots.