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by Mike Caswell
TD Waterhouse Canada Inc. has defeated the lawsuit it faced in the Supreme Court of British Columbia from Frank O. Turkson, a client who claimed that the firm was to blame for an unfortunate option trade. A judge has ruled that Mr. Turkson's loss was the product of his own investment decision. That decision may have resulted in a substantial financial fallout for Mr. Turkson, but there is no reason that TD should have to pay for it, the judge has found.
The ruling, released on April 26, 2016, is a complete loss for Mr. Turkson, 69, who had sought damages over a disastrous trade he entered on June 12, 2014. On that day, he wrote (or sold) a put option for a Nasdaq listing called GT Advanced Technologies Inc. The option would have been profitable had the stock gone up. Unfortunately for Mr. Turkson, the company declared bankruptcy four months later, and the stock was soon worthless.
The dispute arose when TD informed Mr. Turkson that he still had an obligation under the option agreement. The firm reminded him that he had agreed to buy 3,000 shares at $20 each. (All figures are in U.S. dollars.) TD told Mr. Turkson that he would have to buy the shares at a cost of $60,000. In order to facilitate that purchase, TD liquidated other holdings in Mr. Turkson's account, which was worth $133,474 at that point.
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he executed a put option for a Nasdaq listing called GT Advanced Technologies Inc. The option would have been profitable had the stock gone up. Unfortunately for Mr. Turkson, the company declared bankruptcy four months later, and the stock was soon worthless.
The only way this make sense is if he wrote/ sold an uncovered put.
Was it a 6 month option???
Confusing how the story was written as to facts!