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Brokerage changes rules and wipes out my account. Is there any recourse?
- Thread starter pipepuller
- Start date
Quote from rallymode:
How much leverage were you using(long calendars per $10k equity) and were you placing long calendars in the vix ops for credit to have $0 req? My guess is you had a ton of aug/sep calendars and IB got nervous when the front month futures switch inverted over 4 handles.
Around 300 contracts 70% short AUG, 30% short SEPT and Long Feb/MAY/08 and $98K liq. Done over the past 6 months, so I just didn't go in there in the past 3 days trying to get credits.
Like I said before it's quite hard to judge your ACTUAL risk when you have these trades in your acct and $0 margin req. Forget 300 contracts.. I could have probably done 3000 with the same liq and $0 req.... could you imagine the carnage that would have caused by now!! I bet there are some people out there that took some pretty large losses!
Quote from pipepuller:
Aug 10 - the VIX spikes and at 10 am they started liquidating my account with no warning. To sum it all up by lunch time they had cleared my account out and put it in a deficit and by 3pm I got a phone call requesting funds in 5 days. To top it off at 3:30pm they sent me any email stating that I should review the margin requirements in my account and start closing positions, which of course came 5 hours too late.
Can they do this to your account? Just change how they value your spreads, then just close it out? Do I have any options?
Thanks, [/B]
You keep saying "they did this." As another response said, the only person who did the wrong thing, was you.
"Brokerage changes rules and wipes out my account. Is there any recourse?"
You wiped out your account, not the broker. Learn how to trade and manage your money and risk properly.
Quote from rcanfiel:
You keep saying "they did this." As another response said, the only person who did the wrong thing, was you.
"Brokerage changes rules and wipes out my account. Is there any recourse?"
You wiped out your account, not the broker. Learn how to trade and manage your money and risk properly.
Not entirely true. Although the OP bears responsibility for the consequences, it seems that the broker was not keeping its clients up to date regarding the new VIX margin requirements and acted harshly in liquidating the positions.
AZD
Quote from arizonadreamer:
Not entirely true. Although the OP bears responsibility for the consequences, it seems that the broker was not keeping its clients up to date regarding the new VIX margin requirements and acted harshly in liquidating the positions.
AZD
"Aug 10 - the VIX spikes and at 10 am the broker"
things spike. Traders are not supposed to be trading accounts so margin calls are so near.
This to me tells me he was overleveraged. That is usually the main reason leveraged traders are in the 95%. They cannot manage their money, and have others to blame for it.
Quote from pipepuller:
I guess what's also pi$$ing me off is that in their infinite wisdom IB also opened 50 additional contracts for me, how nice. Only to close them 30min later for a cool couple $1k loss.
I look forward to talking with the trading desk on Monday!
While in general, the liquidation was warranted and justified, this looks like an error and worth talking to compliance about. And if indeed it was an error, to push this issue.
Though those are pretty big position sizes!
Quote from rcanfiel:
You keep saying "they did this." As another response said, the only person who did the wrong thing, was you.
"Brokerage changes rules and wipes out my account. Is there any recourse?"
You wiped out your account, not the broker. Learn how to trade and manage your money and risk properly.
The OP is 100% at fault for making a series of disastrous trades.
If the OP does not start applying max CRITICAL ANALYSIS to his trading NOW...
Then the OP will forever be just another donkey...
Forever ** giving money away ** to professionals until it runs out.
This is no time for excuses. Period.
50% OP's fault, 50% broker's fault. ib should not make changes to margin requirements without adequate notification. this is a pattern with ib, as i've seen others complain about this behavior in other threads, and not just the recent thread from a couple of days ago.
tread carefully
tread carefully
So what happened with regard to this issue?Quote from pipepuller:
I guess what's also pi$$ing me off is that in their infinite wisdom IB also opened 50 additional contracts for me, how nice. Only to close them 30min later for a cool couple $1k loss.
I look forward to talking with the trading desk on Monday!