Hey trader,
Friday morning, I had a trade open when the chat started reporting a possible broker outage. Members flagged problems at brokers and exchanges, and one said tasty support confirmed issues.
My own platform was running fine. I stopped the session anyway and told everyone to protect their trades.
Banks had a rough week of their own. On Wednesday, a French regional bank said hackers got into its own account and moved about $112 million to other banks.
The bank says its customers didn’t lose any money.
Brokerage accounts are a target too. FINRA, the regulator that oversees brokers, said in April that takeovers of customer brokerage accounts are rising.
Nobody can promise you a broker that never goes down. A few minutes of setup this weekend can keep a broker outage or a hack from deciding how your open trades end.
On Friday, I gave the room three fixes. One of them was already sitting in my order screen, protecting a trade I’d opened minutes into the session.
Let me walk you through all three, starting with the one I’d already set.
Fix 1: Set An Exit That Survives A Broker Outage
My first words to the room on Friday were simple. “Make sure anything you have open right now has a stop loss, a limit, and an exit.”
A stop loss gets you out if price moves against you. A limit order closes the trade at your price or better, usually at your target.
Once you place them, both orders sit with your broker or the exchange. I told the room orders already on the exchange can still fill if something happens.
An exit order already on the exchange can keep working through a broker outage.
I had one of those orders working on Friday. Minutes into the session, I bought an XSP put vertical.
XSP is the mini S&P 500 index option. A put vertical buys one put and sells a cheaper put at a lower strike.
I bought the 737 put and sold the 736 put. Across two contracts, I paid an average of 28 cents.
That’s $28 of risk per contract, the most the spread can lose. That cap works as my stop.
Right after that, I set a closing order at 82 cents. I told the room, “If I’m not watching, get me out.”
At 82 cents, I’d collect $54 on $28 of risk per contract. That order was in place over 15 minutes before the broker outage reports started.
I never reported a fill on that closing order before the session ended, so I won’t claim a result on it.
Fix 2: Turn On Two-Step Authentication Today
Two-step authentication asks for a second check after your password. It’s usually a code from your phone, an app or a security key.
I didn’t soften this one on Friday. “If you have not turned on two-step authentication, do it now.”
Along with the broker outage reports, the chat was full of talk about hacks. I told the room we know brokerage accounts were being targeted.
I don’t stop at a password on my own account. With tasty, I use an RSA key and every other layer they offer.
An RSA key is a device or app that creates a fresh login code each time. Turn on whatever security your broker lets you add.
FINRA said this week that scammers are using AI to fake IDs, images and voices. They’re using those fakes to get into brokerage accounts.
That’s one more reason I’d add every layer your broker offers.
Fix 3: Save Your Broker’s Trade Desk Number
This fix takes about a minute. Put every broker’s trade desk number in your phone.
The trade desk is the broker’s phone line for placing and closing trades by voice. It’s your backup when a broker outage cuts off your platform.
Your broker doesn’t have to fail for you to get locked out. I gave the room the simplest example on Friday.
Your internet goes down at home, or your power goes out. Your platform is gone, and your positions are still open.
With the number saved, you can call and tell them to flatten you. Flatten means close every open position.
That’s how I put it to the room: “Get me out of the trades, shut it down.”
If you trade at more than one broker, save every number. You won’t want to search a website when your screen is dark.
Run This Broker Outage Check Before Monday’s Open
You can knock out all three fixes this weekend with this broker outage checklist:
- Check every open position. Make sure each one has a stop and a working exit order.
- Turn on every security layer. Add two-step authentication and anything else your broker offers.
- Save each trade desk number. Put every broker’s number in your phone contacts today.
My platform held up fine on Friday. I also told the room I couldn’t guarantee it would stay that way.
Set up your exits and your backups while everything still works.
On Friday, I had my exit order in place before anyone reported trouble. I’d rather you build that habit now than learn it during a broker outage.
Inside the 10% Club, I call trades live and walk through each exit. You hear the entry, the stop and the target as I set them.
Friday’s 10% Club session didn’t give me a single signal. I turned it into a coaching session and answered member questions instead.
That’s the room I want you in when the market gets strange.
Set your exits, lock your accounts and save the number before a broker outage hits.
Blake Young
Senior Market Strategist, TheoTRADE
