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Brokerage changes rules and wipes out my account. Is there any recourse?
- Thread starter pipepuller
- Start date
I guess what's also pi$$ing me off is that in their infinite wisdom IB also opened 50 additional contracts for me, how nice. Only to close them 30min later for a cool couple $1k loss.
I look forward to talking with the trading desk on Monday!
I look forward to talking with the trading desk on Monday!
Quote from pipepuller:
I guess what's also pi$$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!
this sounds like a valid 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...
woah...wtf...how does that happen?!
anyway, after many years of trading I have never had a margin call. even when (early on) I didn't use strict money management rules. I just don't understand how peeps get caught in this situation.
forgive me if i'm off base here, but I have to say you should fund your account and trade such that this will never happen.
VIX trading is not for Desk Jockies who try and trade their 401k or their savings.
No offense, you should have started to pay very close attention to the VIX about, 3 weeks ago.
lack of experince trading the VIX in volitilaty can blow ones account out.
In fact, any "desk Jockie" who is vested in the market should be active in watching their 'accounts' currently.
This enviorment is not for the investor, the part time trader from his office or car phone.
We have entered into a very serious market with a lot of worry. Margins will change again shortley. The swings will get far more wider.
Just wait till we gap down 200 points with out any sign to warn, see if those who are not paying attention have any accounts left after margin calls.
fasten your selt belts ET, turbulance worse the the "Russian Currency crises" is coming to "F*(& B Up your nice smooth ride of the BULL.
No offense, you should have started to pay very close attention to the VIX about, 3 weeks ago.
lack of experince trading the VIX in volitilaty can blow ones account out.
In fact, any "desk Jockie" who is vested in the market should be active in watching their 'accounts' currently.
This enviorment is not for the investor, the part time trader from his office or car phone.
We have entered into a very serious market with a lot of worry. Margins will change again shortley. The swings will get far more wider.
Just wait till we gap down 200 points with out any sign to warn, see if those who are not paying attention have any accounts left after margin calls.
fasten your selt belts ET, turbulance worse the the "Russian Currency crises" is coming to "F*(& B Up your nice smooth ride of the BULL.
Remember, Bunker Hunt's silver corner in 1981?
By all accounts Bunker held a massive majority of the warehouse receipts and was on his way to squeezing the shorts; many of them the locals, at his mercy, during a massive bull market of historic proportions....it was game over, until...you guessed it, the exchanges lifted the margins to 35k per contract forcing him to puke up his positions when he could not refinance his rolls.
Continental Bank in Chicago left his corpse twisting in the wind.
The old saw holds true...to make a small fortune in futures start with a large one.
In a bull market, even if you leave yourself enough dry powder to meet the margin increases, many newer more naive newcomers will not. Washing them out is a silver bullet for the locals.
By all accounts Bunker held a massive majority of the warehouse receipts and was on his way to squeezing the shorts; many of them the locals, at his mercy, during a massive bull market of historic proportions....it was game over, until...you guessed it, the exchanges lifted the margins to 35k per contract forcing him to puke up his positions when he could not refinance his rolls.
Continental Bank in Chicago left his corpse twisting in the wind.
The old saw holds true...to make a small fortune in futures start with a large one.
In a bull market, even if you leave yourself enough dry powder to meet the margin increases, many newer more naive newcomers will not. Washing them out is a silver bullet for the locals.
Quote from pipepuller:
I agree.. I should have been more knowledgeable about what I was trading, I mean who can you really blame I suppose?
My issue was that I had no maintenance margin or initial margin requirements to hold these positions for the past several months. So I thought there would at least be some level of accountability on IB, but perhaps I expect too much.
Heck their margin department said I was fine just the day before. Losing your account is one thing, but owing more is a bit hard to swallow!
Even though I use and worship IB, You'd get more time to unwind @ a full service firm. Most individual brokers understand all too well the value of a good revenue generating client.
Ultimately that policy might be good or bad depending on market conditions. Livermore always said - never answer a margin call.
You might consider it for your style of trading perhaps. Of course the commission cost might make your strategy useless.
Quote from sporky:
woah...wtf...how does that happen?!
anyway, after many years of trading I have never had a margin call. even when (early on) I didn't use strict money management rules. I just don't understand how peeps get caught in this situation.
forgive me if i'm off base here, but I have to say you should fund your account and trade such that this will never happen.
Its pretty difficult to gauge the amount of margin that you actually need to trade the VIX as IB platform shows me requiring $0 margin. I even have an end of day margin/risk statement for AUG 9 (day before closing of my account) showing $0 margin required, $ at risk 5k and almost 100K in cash. Then AUG 10 @ 10 am... account liquidated and deficit owing!
I realize that everyone is saying the brokerage can "do whatever they want", but I still think that's not how business should be conducted. Perhaps if IB had actual margin requirements for the VIX then all this could have been avoided?
Could you imagine doing unlimited (considering there is no max # of contracts) calendar spreads for a credit! SELL Aug 10 for 16's and BUY May 10 for 12's. You can do this trade on the IB platform (at least as of 3 days ago) with no warnings or margin, and you walk away with a large credit. I think even experienced traders might be tempted by this.
If the brokerage isn't letting you know... you can guess how difficult it would be trying to figure it out yourself?!