Found that dude trading CL with an IB account

in the 'real world' , prices don't drop 99% and then the next day goes 1000%. the bros in the exchange changed the 'rules' cause the old rules' restricted their ability to make easy money. via market manipulation. okay the exchange used to have rules regarding price limits during regular trading hours and after hours, there used to be no afterhours trading either as it was too illiquid and ripe for market manipulation. they had rules but somehow they decided to remove the rules What used to be prohibited and frowned upon or considered illegal market activities like market manipulation market behavior is now encouraged and is now considered fair and normal market activity.
 
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PS, margin is per contract , not based on the price.

IB screwed that up too ? They coded max margin based on a zero bound ?

I said weeks ago, folks there needed to get the axe.
 
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Funny, I was watching the days trade on ThinkOrSwim, which showed the neg prices perfectly .

I use IB too, but never looked at their prices, so didn't realize they were screwy. Did notice the charts were borked.
 
I used to lend $$$$ to ib when they paid 5-6 and even 7% on short term paper (15 years ago )

I pulled the funds during the fin crisis, thinking they might go bust during all the mayhem, but of course they did not.

Rather safe than sorry.
 
gaussian said:
Any flash crash demonstrates the lack of true value in the market.

If you're willing to admit there's no value in the market and with HFTs and day traders it's just a casino for degenerates in states that don't have them - I will agree with you. Value investing is more or less dead with the HFTs, constant fed pumps, and "bull at any cost" strategies. It's a casino. If it's a casino then we should enforce casino requirements on the players. I am gambler. I bring enough to cover my losses and then some. For poker I usually walk into a 3/5 table with $2,000 or so in bankroll. Why is it so hard for traders to do the same? Is it perhaps because they lack proper risk control? If so, raise the margins. My point stands. But this is a contradiction. You're a day trader. A sophisticate of the market - not the check cashing free drink trash that throws their money away betting on 00s! Oh...wait. Isn't the mixing of debit cards and bank accounts with brokerage services the same thing...shucks. Almost like they know the psyche of a day trader can't resist depositing that sweet check from work and just putting some into a few gambles. Damn. Go watch a few TDA and Robinhood ads and get back to me.

If you want to gamble in the market we should legalize bucket shops. Make a building where you can place a parimutuel bet on a stock and run it like horse racing. Leave the market to investors. Otherwise it's just a casino.

I seem to have struck a nerve with you. Most traders don't like admitting they're gamblers. They look down their nose at people playing craps - yet we're both the same. Remarkable how all games of chance are gambles. I just ask for some parallels to be drawn here. The man in OPs post is a gambler. The difference between a casino gambler and him is that a casino gambler losing 9M in the casino isn't going to destroy a company.
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You've gone off on a tangent here. The issue is not with the margin requirements, it would have been more than adequate if IB's system was working properly, it wouldn't have allowed Shah to trade 212 cars at $30 margin each when exchange margin was a few hundred times that.

This could all have been avoided if IB had kept up with what was going on and updated their antiquated systems properly, but instead of doing the right thing, they went all out to cripple their other clients with ridiculous margin hikes e.g 3X exchange margin on ES. I'm up huge YTD but I reckon I would up at least 50% more if it wasn't for IB's ridiculous margin policies.

It gives me pleasure to know that IB lost 100m due to their incompetence, yes its schadenfreude but they deserve it, truly.
 
trickshot said:
IB should count themselves lucky, this thing could have bankrupted them easily.
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Agree...
A 10MM account could have bought 330k contracts, resulting in a loss of >12 Billion.
With CL dropping without a bottom he would def have gotten filled at 0.01 on quite some size.

Taking IBKR off the map.
 
Tps said:
Agree...
A 10MM account could have bought 330k contracts, resulting in a loss of >12 Billion.
With CL dropping without a bottom he would def have gotten filled at 0.01 on quite some size.

Taking IBKR off the map.
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There is a position limit at the exchange level, for WTI Houston Crude Oil Futures the limit is 10k contracts, for a single month, and 20k for all months, so I don't think it is possible to buy that many.
 
Alexpung said:
There is a position limit at the exchange level, for WTI Houston Crude Oil Futures the limit is 10k contracts, for a single month, and 20k for all months, so I don't think it is possible to buy that many.
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Ok, didn't know that. But they could still easily have gone out of business over this. For e.g. if oil (CL) went negative earlier than 15 min before expiration and IB customers loaded up on WTI not realizing it can go <0 due to the low margin req.
 
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