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u/Low-Landscape-8984 8 hours ago Question

thoughts on why schwab restricted my account

last year i was trying some different option strategies. long story short i saw that 0-3DTE options on TLT maybe a few strikes OTM had like a 4-5 cent spread (ie 0.45 bid, 0.50 ask). i would click the buy bid button, then click the sell ask button after i got filled. so basically i was making $3-5 per trade, maybe like $1.50-3.50 after fees. if my buy bid didn't get filled in a few seconds, i would cancel and try again right away... and i would do the same thing with the sell ask button after i got filled. anyways i was doing this so fast that i had like 1500 fills and 1500 canceled orders in just a few hours, and i had made a couple thousand dollars. i thought i had found a loophole in the system. but no. i take a break and come back and my account is restricted. they told me that i had too many cancels and it could be flagged as spoofing (i think that's what they said, but can't remember for sure, it was over a year ago). anyways i watched a video the other day and it said something like brokers make money on the spread or something so i was wondering if i was taking money out of schwab's pocket by doing this and that's why they froze my account. what ended up happening is they told me they would unfreeze it if i promised to stop doing it so that's what i did and never did that strategy again. but there for a short time i thought i had this whole stock market thing figured out as i was making about $1000/hour just by mindlessly clicking buttons
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  1. u/ComplexRupert 1 7 hours ago
    they weren't mad at the profit, your order flow looked exactly like a bot trying to manipulate the bid/ask spread, algo flagged you for spoofing before a human ever saw it