Have you ever been threatened by Interactive Brokers ? Yes, we did

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mike-claire

Dear Traders,

Today we experienced the worst thing it could happen to a trader : CLOSE OUT YOUR POSITION IMMEDIATELY OR I WILL DO IT NOW FOR YOU. We have been trading exclusively the Cac future (we live in France. I am, Italian and my wife is French) for over four months without causing the slightest problem to Interactive Brokers. Tonight, at about 18:00 we decided to open a speculative position edging a short of 30 contracts at 4338 without having all the money available in our account. Our position was in the right direction since the US indices were sliding as well as the Cac future which closed at 4305 at 22:00. We could have bought our short at that time or before the closing below our short point. But, guess what: IB phoned twice and THREATENED US. We were forced to close the position at 4343 with a noticeable loss because IB was waiting on the phone for us to do so. As a result, we decided to close our account immediately after that accident simply because we cannot trust a broker who goes against us. We have been edging our positions before this accident and IB never complained. Today, they decided to do it all of a sudden and without notice. My question is the following: although we know that we cannot hold a position with the correct maintenance amount in our account, is it fair that IB allows anyone to increase his/her future limits without having the starting maintenance margin? Is it fair, legal and respectful vis-à-vis their clients? I doubt so and I would like to submit a complaint to the SEC and COB (Commission des operations boursieres, here in France).

I would appreciate your views on this matter. One thing is certain : IB will never have us again as their clients.
 
Let me get this straight, you raised your contract limit above your maximum margin level. Then you initiated a position that was above the margin maintainence requirement and you are upset that IB forced you to exit the position?

Frankly, I'm surprised IB just didn't autoliquidate it themselves, at least they had the courtesy to call you first. I'm also surprised that IB didn't freeze your account and hit you with a margin call. I don't see what you are complaining about. You were trading with money that wasn't yours, thats called freeloading and is against security regulation. Be glad you can still trade.
 
"although we know that we cannot hold a position with the correct maintenance amount in our account, is it fair that IB allows anyone to increase his/her future limits without having the starting maintenance margin?"

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You knew that you didn't have the proper margin to hold the position. Thus, from a regulatory standpoint IB did the right thing. Otherwise, they could get fined,sanctioned, etc. for letting you violate the exchange rules (i.e., trading with the proper margin).

I was surprised to hear that their software actually let you initiate the trade. It should have rejected it before you entered it.
 
Well, first of all there are no such rules in France. You can trade whatever, the SEC rules are a nonsense overseas.

Secondly, the IB Software is not set correctly. You can trade any amount of contarcts during after-hours sessions without being liquidated.

In the third place, WHY on earth IB allow cusotmers to increase their future limis if they do not have all the money available in their account ? How do you explain that ?
 
Originally posted by mike-claire

In the third place, WHY on earth IB allow cusotmers to increase their future limis if they do not have all the money available in their account ? How do you explain that ?
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Regardless of how you did it, you flat out admit that you KNEW you were violating margin requirements. And you are somehow indignant that IB forced you to close the position. I don't understand what you are complaining about.
 
You knowingly and willfully broke the margin requirements. While it may not speak well of IB's risk management to have allowed the trade in the first place, I not only agree with the firm forcing the close out of the trade, I suspect that they had to do it because of SEC regulations. They can't just arbitrarily decide to allow margin requirements to be broken. They could get into trouble with the regulatory bodies for allowing it to go on.
 
Well, you arte right : I knowingly and willfully broke the margin requirements..... While it may not speak well of IB's risk management to have allowed the trade in the first place..

Definitely, you did not repy none of my answers, nor you did read entirely my posts. Everyone sees and reads what he wants..., is it ?
 
Wht is astonishing of you, American guys, is the unilateral and arrogant way of imposing your colonial ideas, culture, economy and military power overseas. I am looking forward to have a true European Union where we will deal with 300 million people able to compete fiercefully with you and our country. It will take still some time, but it will come one day.
 
This might be the most insane thread I have ever read...Basically, you conned the system into allowing you to leverage your account enormously, then entered a position and finally are pouting about it now that you did not get the windfall profit you were expecting...

Actually, this is scary that guys like you are doing this type of stuff with IB...Anybody who is maxing out the daytrading margins to begin with is really pushing the envelope...
 
perche? vogliamo la pace.

Don't know if I spelled that right:confused:

So, when you say that those rules do not apply to you, do you mean the margin requirements as well?
 
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