ET Reddit Mentions | ChartExchange

I asked Claude AI agent this: *"Schwab filled 10 SPX options contract $10 cheaper than intrinsic value. Please look at the attached images and let me know your take on this issue.*" Below is the response. OP, you have case.
Looking at your images: you had a **stop-market** sell order on the SPXW 7690 put (stop = $85.00), and it filled in three pieces at 11:05 AM — $75.30, $74.90, and $74.90 — for an average fill around **$74.94**.
Here's the intrinsic value problem:
* At **11:05 AM**, SPX was at **$7,594.84** (image 3). Intrinsic value of the 7690 put = 7690 − 7594.84 = **$95.16**.
* At **11:06 AM**, SPX was at **$7,605.16** (image 2). Intrinsic value = 7690 − 7605.16 = **$84.84**.
Either way you slice it, your contracts filled roughly **$10–20 below intrinsic value** at the moment they executed. That's the issue you're flagging, and it's a legitimate one — for a cash-settled, European-style index option like SPX/SPXW, the price should almost never trade meaningfully below intrinsic value, because there's no early-exercise arbitrage but market makers still generally won't sell below intrinsic (they'd be handing away a "free" $10–20 per contract, ×10 contracts ×100 = $10,000–20,000).
**What likely happened:**
1. **Stop-market orders have no price protection.** Your order was a *stop*, not a *stop-limit*. Once SPX hit the level that triggered your $85 stop, the order became a plain market order and filled at whatever the prevailing bid was — not at $85, and not tied to intrinsic value at all.
2. **The chart shows exactly the kind of whipsaw that causes this.** Between \~10:40 and 11:15, SPX was swinging violently (down to the 7590s, back up, down again). During fast, volatile moves like that, option quotes/bids can go stale, gap, or get temporarily thin, so a market order can print well away from fair value for a few seconds.
3. **Multiple small fills at the same lousy price (8 contracts at $74.90) suggests you hit a thin/stale bid**, not necessarily a "flash crash" print — likely a market maker's resting bid that hadn't updated fast enough during the swing, and your market order swept it.
**What this does** ***not*** **necessarily mean:** it doesn't automatically mean Schwab did something wrong — the exchange, not the broker, determines whose bid gets hit, and Schwab is obligated to route for best execution among *displayed* quotes, not to guarantee intrinsic-value pricing. But a fill that far below intrinsic, especially across multiple fills, is exactly the kind of thing brokers and exchanges will review as a **potential erroneous trade / "clearly erroneous execution."**
**What I'd do:**
* Call Schwab's trading desk (not just chat) and specifically ask for a **trade execution review / clearly erroneous trade claim**, citing the SPX level at 11:05 AM ET vs. your fill price.
* Ask Schwab to check whether **CBOE (SPX's listing exchange)** flagged that print as erroneous — exchanges have rules (e.g., CBOE Rule on erroneous trades) for options executed a set dollar/percentage amount away from theoretical value in fast markets.
* Get the **time & sales / NBBO snapshot** for SPXW 7690P at 11:05 AM from Schwab — if the NBBO bid was actually higher than $74.90 at that instant, you have a strong case your order was filled outside the NBBO, which is a real violation.
I'm not a lawyer or financial advisor, so treat this as informational, not a guarantee of outcome — but the numbers you've shown are a legitimate basis to push Schwab for a review or adjustment.

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