I am in the process of signing up for an account on OptionsHouse and it wants to know the name of the company I work for, as well as the address.
Why do they need to know this information?
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1Stock brokers need some assurance that you are gainfully employed and thus can meet their margin calls when your options are not going the way you hoped.– Dilip SarwateCommented Jun 4, 2012 at 3:12
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Will they contact my place of employment once I've finished registering for the site?– RyanCommented Jun 4, 2012 at 3:27
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1Did you ask them?– MrChristerCommented Jun 4, 2012 at 6:31
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The SEC requires them to ask for this information. The SEC does not require you to answer. There are separate questions that you are required to answer about if you are an insider.– VrooCommented Feb 7, 2020 at 19:37
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1 Answer
They need to know if you qualify as an insider.
answered Jun 5, 2012 at 18:36
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1This could certainly be true, but there are many other reasons, and from what I could tell they are not specified on the website of OptionsHouse. Commented Jun 5, 2012 at 18:45
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If a broker knows that the client is an insider, is the broker required to refuse to execute some of the client's buy or sell orders on the grounds that these orders might possibly fit the definition of insider trading? Or does the broker want to know so that the house can also profit from any insider knowledge that might be deducible from the client's buy and sell orders? Commented Jun 6, 2012 at 1:05
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@DilipSarwate: My understanding is that it's a matter of reporting--they have to report insider trades. Commented Jun 6, 2012 at 3:57