Is it not possible to exercise the 45 call in the morning when I have been assigned and sell that now owned stock originating from the exercise to satisfy the obligation at IB? I realize that I have ten minutes to do so or they get bought for me, and I read this in user's guide: The exercised option appears in the Outstanding Exercises portion of the window until it is cleared by the OCC. I am guessing the system does not recognize this and will take action if I have not?
Danger of IB? True or False?
- Thread starter Option Trader
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Is it not possible to exercise the 45 call in the morning when I have been assigned and sell that now owned stock originating from the exercise to satisfy the obligation at IB? I realize that I have ten minutes to do so or they get bought for me, and I read this in user's guide: The exercised option appears in the Outstanding Exercises portion of the window until it is cleared by the OCC. I am guessing the system does not recognize this and will take action if I have not?
Def,
Do you have answers for us?
Do you have answers for us?
I never heard about these real time assignments until OTraderâs emails showed that indeed these can occur.
Especially if these occur pre-expiration I find this totally unacceptable. Sure there can be system failures either at the OCC or at the broker but why should the trader pay the price?
Apparently anytime of day you could be stepping out of the office during which the broker enters: âSorry Iâm late!â and minutes later find your positions liquidated. That this happens in less than 1% of the cases is of course cold comfort if you are in that 1%.
A simple rule could prevent this from happening: OCC and broker bear responsibility to settle the 9:30 AM EST account status re. assignments as final for the day. Failure on their side either to reconcile (OCC) or to report (broker) on time should be solved by themselves. The trader can not be assigned until after market close.
If such Regulation is not in place it should be asap.
OTrader, I donât know all the details about your case but as it looks so far you have my full support in your pursuit to get this straightened out.
Frankly I am a bit disappointed in the lack of response from other forum members. It seems easier to mobilize for a discussion about gamma than about an account liquidation.
This could happen to anyone who ever held a short option. If you remotely understand the problem and have any opinion at all please let it be known.
Especially if these occur pre-expiration I find this totally unacceptable. Sure there can be system failures either at the OCC or at the broker but why should the trader pay the price?
Apparently anytime of day you could be stepping out of the office during which the broker enters: âSorry Iâm late!â and minutes later find your positions liquidated. That this happens in less than 1% of the cases is of course cold comfort if you are in that 1%.
A simple rule could prevent this from happening: OCC and broker bear responsibility to settle the 9:30 AM EST account status re. assignments as final for the day. Failure on their side either to reconcile (OCC) or to report (broker) on time should be solved by themselves. The trader can not be assigned until after market close.
If such Regulation is not in place it should be asap.
OTrader, I donât know all the details about your case but as it looks so far you have my full support in your pursuit to get this straightened out.
Frankly I am a bit disappointed in the lack of response from other forum members. It seems easier to mobilize for a discussion about gamma than about an account liquidation.
This could happen to anyone who ever held a short option. If you remotely understand the problem and have any opinion at all please let it be known.
Update: Have meanwhile found out of a contact and phone number at IB where under certain conditions they may agree to not have your account to go into auto-liquidate after 10 minutes. It seems to me this contact is not available to the typical customer.
I don't know why IB does not want to help us with answers, as it would stand to benefit many customers to get more specifications.
Should people not be offered a phone number by IB if they know they will not be able to handle an assignment at the very beginning of the day but have spread positions?
What about information of how to program TWA for people who do 4 legged spreads?
Perhaps someone can share their thought that if a person starts handling the assignment in the first 10 minutes, will that buy you more time?
Should people not be offered a phone number by IB if they know they will not be able to handle an assignment at the very beginning of the day but have spread positions?
What about information of how to program TWA for people who do 4 legged spreads?
Perhaps someone can share their thought that if a person starts handling the assignment in the first 10 minutes, will that buy you more time?
def
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It's not that we're not willing to help. I've stated that this hardly happens. Most accounts are well funded and it isn't an issue. I don't know of any cases where a late exercise caused a liquidation and I think that clients aren't providing examples or complaining speaks volumes. That doesn't mean it could never occur. But if it does, each case would be looked at individually and remedied accordingly.
Thank you for returning to the scene. I agree that it is a good sign that customers have not complained about late exercises, and I hope it never happens (albeit I think IB would benefit everyone by not leaving lingering uncertainties).
However, customers have yes complained miserably on the Optionetics links at the beginning of this thread about the regular auto-liquidate system within the first 10 minutes. As good as IB is at automating for everyone's benefit, IB cannot automate EVERYTHING. The fact maybe 15% of the customers' do spreads and require a bit more attention cannot be ignored--unless a broker does not need the customer.
If you don't mind me suggesting that IB should review all their accounts and remove from auto-liquidate any account which holds positions in spreads that would leave them with a shortage if one leg is exercised. OR B) to program TWA to do a "smart-liquidate" to match the smart-route. OR C) to give customers who do spreads a bit more time (a few hours, not 10 minutes) What is the rush after all, so long as the assignment is handled that day!
To: Nonprophet and fellow Elite Traders,
cc: Def
I was told the following information:
A) The IB auto-liquidate looks for the leg which causes the biggest margin problem first, and does not just randomly dump your positions.
If this is so, one's ability to be there at the opening puts at stake much less--it has to do with reformulating your position rather than losing another leg(s).
B) If there is late reporting by the OCC or a system failure by IB and therefore customers on a wide scale basis (not individuals) are not aware of the assignments at the opening, it's my understanding now that IB would make some type of grace period.
I still think it would be for IB to: a) give customers more than 10 minutes, and b) take responsibility after 10 minutes for late reporting to individual accounts, or at least to let the customers know at the opening of the day if the day's reporting has came through.
Def, please verify the above.
Doesn't TWS let you specify "liquidate last" for important positions?
Tell me how they would design a computer algorithm to read your mind about what is important or not.
We can't blame IB for aspects of how the market works.
Or for running our accounts close to the margin edge.
Maybe people could add posts regarding how other brokers handle things, but I wonder if its all that different.
Tell me how they would design a computer algorithm to read your mind about what is important or not.
We can't blame IB for aspects of how the market works.
Or for running our accounts close to the margin edge.
Maybe people could add posts regarding how other brokers handle things, but I wonder if its all that different.
In case of late reporting an intraday grace period hardly makes sense if you're not at your desk.
To let customers know at the opening of the day that the day's reporting has NOT come through would nail you at your desk for the full day, but would be an improvement nonetheless.
Good work OTrader, look forward to def's reply.
BTW for folks misinterpreting the thread: it is not about auto-liquidation but about unexpected MIDDAY assignments and immediate auto-liquidation due to delays at OCC or broker.
Right, neither did I know that this could happen but apparently it can. Ask OTrader.