Cobra Trading Review

About three months ago I dropped my ETC account with Center Point and changed to Cobra Trading.  I wanted to write a review on my experience with Cobra and why I ultimately decided to leave Cobra.

First, before I changed to Cobra I had two accounts with Center Point.  Vision and ETC.  Back in April ETC did some shady things to their customers during the CBLI craze.  Randomly, without any warning, they decided to limit how many shares you could carry over night too, if I recall correctly, 5000. If you had more than that by 10 minutes before the close they would automatically close out your position that was over that threshold.  Unfortunately, they nor Center Point gave any warning about this change.  All of a sudden traders were getting closed out of positions and had no clue why.  I was short CBLI at the time and had over 5000 shares.  I was watching the close and saw most of my position get closed out. I was shocked!  I added back the shares only to have them closed out again a few minutes later.  This resulted in some substantial losses for me.  I was understandably furious and I wasn’t the only one.  Other traders took to twitter (such as @elkwood66) to express their anger and dismay.  We were all shocked.  The next day Center Point sent out an email explaining that ETC has liquidity issues so they decided to make the change on how many shares they let you carry over night.

I was done with ETC after the wrong way they treated their customers and I wasn’t happy with Center Point either.  I probably would have been done with Center Point all together if Vision wasnt so valuble to me due to their borrow availability.  I was on the hunt for a new broker to replace my ETC account and that is when I found Cobra Trading.

Cobra Trading came to me as a recommendation from Dante Vincent (@DGTrading101). He shared that Cobra was his main broker and that they were less expensive then Center Point.  He had nothing but great things to say about them.  I reached out to Dante’s contact and was impressed.  They were willing to beat Center Point on commissions and platform fees.  I signed up that day for a new account.

My overall experience with Cobra was positive.  They have superb customer service!  They are quick to help and respond.  I recall having an execution issue when I first started and their quickness to act saved me from loosing a good amount of money on a trade that started to move against me.  I was able to get out with a gain thanks to their help.  I also had an account set up issue and they were super quick to fix it for me.  Unfortunately, at the time they just offered the Sterling platform.  It was not an easy transition to that platform.  I think they now offer DAS for equities trading.  Though on their website it looks like they only offer DAS for options trading when looking at the routing fees page. I did also find that they were less expensive than Center Point on some things.  For example, they have a smart route that is free to use and the executions were excellent.  It’s also cheaper to hold your position over night.  Their level II data is better than Centerpoint as well, though you can get that better depth with CP if you are willing to pay extra for it.  The account through Cobra is with Wedbush.

Ultimately though, I found that I just was not using my account with them very often.  There were two main reasons why.  Their borrow availability and the method in which to obtain those borrows.  I also hated the Sterling platform, but even if I could have changed to DAS the two issues I just stated are too big of a deal for my trading strategy.  Borrow availability was just ok.  I would say it fell just a little short of ETC on hard to borrow stocks.  Their ETB list was almost identical to ETC so very good there.  They were nowhere close to Vision on availability.  If Vision did not have the borrow, they would never have it either so there was no advantage there.  I also found that the borrows were usually slightly more expensive than Vision.  I can’t recall a single instance when they were less expensive.

This brings me to my second reason.  In order to find those borrows you would have to message them directly either by Skype, AOL or via their chat tool on their website.  They do not have a locate monitor tool in the platform that you can use to find borrows.  Here is where the problems really came to light.  I could never get Skype to work to contact them.  I have used Skype a lot (my son uses it every day) and have never had issues, but to contact them… impossible through Skype for me for some reason.  AOL was also fraught with problems.  The AOL app constantly stopped working for me.  I would get an error message saying that AOL was having problems and to try and log on later.  The problem though, once I got that message it never worked “later!”  I re-downloaded the AOL messenger app 3 times!  It would work for a few weeks and then stop working again.  These problems I had with AOL and Skype are of course not Cobra’s problem, but they created a massive head ache for me.  The chat tool on their website always worked but was slower than AOL.  Despite the issues with messaging them, just having to message takes longer.  Even though they are super quick to respond it still is not as quick as the locate monitor.  You’re adding a middle man who has to check for you.  Often on these short plays time is of the essence.  I need to act fast.  With my locate monitor I could have borrows within seconds, at Cobra it could take minutes.  Also if you short much you know that some times borrows become available during the day that once were not available.  You have to keep checking.  I would find myself hesitant to message them again and again for locates for fear of bothering them.  They never made me feel that way, but often times I would only check twice instead of the 10+ times with my locate tool at Vision.  On two instances I asked for a locate, they responded that they were checking for me, and I never heard back from them.  I am sure this was an honest error probably caused by the fact that they were dealing with a ton of people asking for borrows at that time.

These two issues resulted in me hardly using the account so I decided to close it.  It’s not worth paying the data and platform fees if I’m not using the account.  (For example 300K+ shares at Vision this month and only 20K at Cobra)  Now, if you don’t short low float stocks 95% of the time like I do, or you swing your positions a lot, then they could be the perfect broker for you!  Less expensive than CP, awesome customer service, and a great company.  They did tell me when I closed my account that they are working on obtaining more vendors for borrows.  I also know they are working to add the locate monitor.  If they are able to do those things I would 100% consider going back to them!

So as of now, I am down to just the one account with Vision through Center Point.  Vision is expensive, but without it, I would be in a world of hurt.  I am very grateful to be able to have my Vision account with Center Point.  Their hard to borrow availability is outstanding.  I would really like to add a second account, but for now, I have not found that broker that meshes well with what I do.  Maybe I will have to get over my issues with what ETC did and go back to them.  If you guys have any recommendations though please send them my way!!

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