Broker Review: MB Trading

I chose to go with MB Trading initially because of their low commissions. Their software looked promising and I couldn’t really find any review online that made me think they would be anything but satisfactory as a broker. I’ve now been using them for about 3 months and I am running away from them as fast as humanly possible. I’d gladly pay double the commission as long as it means I’ll never have to hear the name MB Trading ever again. Please listen to my experience before you consider going through them…

MBT website

What they offer:

Part of what initially drove me to them was the fact that they allowed trading options, forex, and futures all from the same broker and platform. There are only a few brokers that offer this and MB Trading had considerably lower commissions and software/data fees. They offered extremely low commissions on options ($.95/contract) and tight spreads in forex. The software looked promising, and the offered 100 free trades for new accounts. Every other website had them rated well, and they even received a high rating from Barron’s.

What they delivered:

The single worst piece of software I have ever seen in my life. Not even freeware crap programs run as bad as MBT Desktop Pro. The program crashes constantly, and modules within the program make so many mistakes that you can never really trust anything it does. You constantly have to check every time you load an order to make sure it actually loaded what you told it to, or you could end up in some very strange trades. You have to check the math it does on prices, or you will put in wild and erratic orders. You also have to check the math on your own positions or you might have a heart attack when you look at your P&L and see that it is way out of whack. If you plan on using MBT Desktop Pro, you had better get used to seeing this screen when it crashes every 5 minutes…

MB Trading crash dump

MB Trading crash dump

When I first started using the software I noticed that it crashed all the time. The screen above is what is displayed after the crash. I called tech support and I immediately get the response “There’s nothing we can do,” and of course “You are the only one who has ever called in with that problem.” (More on tech support later…) But I thought “Ehh.. Who cares, I can deal with a crash-y program for sub-dollar commissions per option contract.” But as I became more acquainted with the software, I realized that constant crashes were only the beginning.

MB Trading desktop pro frozen chart

Charts randomly won’t load, and the program will constantly need to be restarted to get it to work. Sometimes when you click or type a symbol you get a blank chart like the one here, nothing loads, nothing happens, nothing displays any error message.

 

The positions monitor will misquote how many contracts you have, therefore also miscalculating your P&L. So if the program tells you you’re up or down for the day, there is no way to really know if its true or just full of shit. You have to go back and look at the clearing house numbers to actually know the truth.

There are two ways to trade options, each of them is equally horrible. There is the Options Strategist which was the only way to trade options when I first started using their software.

MB Trading Options StrategistAnd then after a while I think they realized there were just too many problems with the Options Strategist, so they made the software use a web relay to connect directly to their web platform version of options trading.

Options web relay MBT

The Options Strategist does not correctly load the price of some spreads. Usually, when loading a stock or forex order, it will always pull up a price at or between the bid/ask price, but when loading an option spread, it will quote something way off because it can’t calculate it correctly like every other broker software does. You have to manually look at the prices of 3-4 contracts and their respective spreads, and then come up with where you want to place your order within the combined prices. Sure, its not that hard to do, it’s basic arithmetic. But why am I sitting here wasting my time when there is a “professional platform” right in front of me on a machine that can run calculations billions of times faster than me?

MBT butterfly wrong price

If you look at the picture above, you will see that the natural price should be $.18 (.51+.07-(.20*2)) but the software automatically loads a price of $.39 so it can be very misleading if you are not paying very close attention, or if you get used to it working correctly in other instances of buying stock or single options.

The software will also not let you close part of a spread. When I try to route a closing order for part of the spread it rejects the order…

MBT spread breaking rejected order

So if you have an Iron Condor and you want to close one side of it, you’re gonna have to call in and do it through the trade desk because the software will not let you. In fact, it will not let you set-up any “buy/sell to close” orders at all.

MBT no buy to close

The only way you can load a closing order is by right clicking the whole position in the position window. When you do that, you only have the option to close it all or nothing.

The Options Trading (Beta) web relay is even worse than the Options strategist in my opinion. When it first came out, it forced me to update the software and then automatically switched to the web relay. I was trying to quickly get out of some positions because I had to go somewhere else and the web relay crashed the program as soon as I clicked it (over and over and over again.) I finally had to call in and they magically couldn’t replicate the problem and I was also the first person to ever have a problem with the “awesome” new update. After a few phone calls I was finally told where I could use the old buggy options strategist again (like exchanging a poop in the hand for a fart in the face.) I was told by the guy on the phone that “Next time…I should really learn how to use this new tool because the Options Strategist might be completely gone in future updates.” Yeah…….How am I supposed to learn to use it when it crashes the program the instant I touch it?

Weeks later, the options strategist started going haywire and not working at all so I tried the web relay again. This time it was at least functional, although it worked at a snails pace because it was relaying through the web. But of course there were more problems. When you try to load a closing order for a spread, the web relay will load the complete wrong month. So say you have a March Iron Condor that is coming up on expiring and you want to buy it back. When you load the order it will load some other month down the road and you have to manually change it back to March. Sure it is your responsibility to look at the order before it goes through, but the software also shouldn’t load the wrong thing. After all, you told it to “load a closing order” to your position. One slip up of trusting the software to actually do something right and you just bought yourself an Iron Condor and a really dumb trade that you’re now stuck with. I slipped up and accidentally got filled on an order to buy an Iron Condor 3 months out when I was trying to close one that was expiring the next day.

Judging by history, there are probably many more problems with the web relay, I just ran away as fast as I could and didn’t stick around long enough to find out what they are. If you go with MB Trading you should be prepared for software that crashes and constantly makes mistakes and miscalculations, and of course be ready to make many calls to the trade desk to make up for the lack of competent software programming.

Tech support:

The first time tech support picked up the phone, I was pretty shocked. The guy sounded completely apathetic and stoned. He sounded as if he had his feet up and I had just interrupted his precious afternoon siesta. He offered no viable solutions, and wasted about 30-45 minutes of my time connecting to my computer and poking around and never finding any kind of problem. He verified that everything should work on my machine and his computer was using the same OS version. Every time I called in to the trade desk to deal with the software not letting me break spreads into individual legs, they urgently referred me to tech support to fix my problems, and every single time I got the same procedure of time wasted and no solutions offered.

Another time when I called into tech support about the Options Strategist misquoting spread prices I got the snappy response of “Well……Why can’t you just calculate that yourself…?” Hmmmmmm…..Considering that your own employee who was hired to code this so called “professional platform” had one too many fat fingers to calculate it correctly, what makes you think I should? Are you saying I have to correct your professional software like a 3rd grade teacher corrects Math homework? What am I paying you commissions for?

Trade Desk:

The trade desk is the only thing that was sort of good about MB Trading. Whenever the software forced me to call into the trade desk, they were always pretty accommodating and understanding. I got the feeling that they spent most of their day dealing with people calling in about all the software bugs and crashes. They even gave me some more free trades and took a trade off of my account because of a software error.

In the end, MB Trading was one of the worst experiences I have had in dealing with any company in my life. I cannot believe that anyone would put their stamp of approval on such a terrible piece of software. I made the switch to ThinkOrSwim and I am 100% ok with paying higher commissions after dealing with MB Trading. Please think very hard about all of these problems before signing up with them, there are other brokers who offer similar commissions to them who are probably much better. Choose wisely.

How to get approved for options trading by your broker

I never realized how hard it would be to be approved for options trading. When I originally wanted to trade options a few years ago I put in an application to my broker and was denied to even buy calls and puts. I wrote off options trading as something that they would only let you do if you have a very large account and didn’t think about it again.

A year or two later I looked into it again and realized that there is no reason they should be so strict with options and spread trading. I understand why they would be a little wary about who they let write naked options, but spread trading is defined risk and leaves nothing to chance. I decided to try again with a few brokers, but I never thought it would be a multiple month process with so many frustrations. After finally being approved I learned a few things about the process:

  1. Be persistent and constantly ask whoever you can, on the phone, over email, etc.
  2. Keep wasting their time and nag them until they crack.
  3. If you can, try to prove you know your stuff.

I tried getting approval with the broker of my choice and was instantly denied. I called up customer service and tried to push some answers of of them. It basically came down to my net worth, my account wasn’t big enough to get enough of their attention, so they just skipped over me. The rep told me in a very roundabout way that I should “take a second look” at my net worth and liquid assets and get back to them. I looked at it again with my beer goggles on and changed the info up one level of net worth and resubmitted it to them. They got back to me and asked for proof of my net worth. I couldn’t provide it so I moved on to another broker.

I chose the second broker based on their low commissions. I decided to be a little sneakier with this application, because I knew if I straight out said I wanted to trade naked options, they would probably deny me instantly. I started the process of opening an account with them and stated what level I wanted to trade as just regular stock with margin. I was connected by email with a service rep and I started emailing her questions about everything having to do with the account. I was living in another country outside the US so I had to send some paperwork by email over the next week. I emailed her a lot and used a lot of her time opening my account until it was almost done. Then right before submitting the last pieces, I said I had made a mistake on the trading levels and wanted to trade naked options. The trading level was changed and I was cleared to trade them. I’m not sure if they would have approved or rejected me from the beginning, but I think that it had something to do with all the time I spent corresponding with the person in charge of opening new accounts. After wasting so much of their time, I think they are anxious to get rid of you, and since your account is nearly complete, its probably easier to just approve it. This might not work with a bigger broker who has a more bureaucratic procedure, but tis worth a try.

So I was cleared to trade, funded the account and started trading with the new broker. I thought everything was solved, until I realized why they were a discount broker. The software was the worst thing I have ever used in my life. It had so many bugs and constantly crashed that I decided I had to leave and go to a new broker. So I went back to the broker I originally wanted.

I applied again even though I wasn’t supposed to reapply for a few months. I emailed them and told them I was already trading with another broker and I wanted to move my business to them. DENIED. Called them and talked to a live person. DENIED. I started emailing someone at the company about it and they referred me to someone else in the department who may be able to help me. I opened a new IRA account because I thought it might be useful to apply again in an account that hadn’t been denied numerous times before. I also took an options quiz at dough.com and showed them I knew what I was talking about when it came to options. They finally approved me! This was after being denied at least 5 times, and I was finally ready to go….

Except they only approved me to buy calls and puts. DAMN, too bad I never plan on buying a plain long option in my life. I emailed them back again and played the “I want to move my business here, BUT…” card again. They said they would try again and email me back in a few days. When I finally got a response, they had FINALLY approved me to trade spreads. It’s not uncovered writing, but I’ll take it for now until I build up a little history with them and apply again for naked options.

I’m an inpatient person and I hated every second of dealing with the brokers on this issue. I hate having to constantly call someone and deal with the same crap over and over. The bottom line is they don’t care about you if you don’t have a huge account, and you’ll have to be annoying and constantly nagging them to get it done. Now that its done, I feel great, except that now I need to move onto the next step…

Getting them to lower their commissions to match the crappy discount broker that I am with now. I am prepared for the exact same fight I had with the options approval, and I’m not looking forward to it one bit.