You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
IB changes margin rules abruptly without informing
- Thread starter gmst
- Start date
OP, get over it, this is a non starter. Rule #1 is it's your responsibility to stay in margin compliance within the context of your broker's rules, in this case 50% of initial for ES. This is a vanilla outright, not a complex spread calculation.
You say you were fully aware your order would violate the house rules, so what's the thought process as the order is about to execute?
"Uhm, cool, IB isn't cancelling my ES order so let me texas hedge my NQ long without margin and go for a free ride! If I win dinner's on IB, if I lose, I'll start a bitch thread on ET and get all the IB haters fired up! Ba-ba-ba-ba-boo-ya!"
You say you were fully aware your order would violate the house rules, so what's the thought process as the order is about to execute?
"Uhm, cool, IB isn't cancelling my ES order so let me texas hedge my NQ long without margin and go for a free ride! If I win dinner's on IB, if I lose, I'll start a bitch thread on ET and get all the IB haters fired up! Ba-ba-ba-ba-boo-ya!"
Quote from atrocious:
OP, get over it, this is a non starter. Rule #1 is it's your responsibility to stay in margin compliance within the context of your broker's rules, in this case 50% of initial for ES. This is a vanilla outright, not a complex spread calculation.
You say you were fully aware your order would violate the house rules, so what's the thought process as the order is about to execute?
"Uhm, cool, IB isn't cancelling my ES order so let me texas hedge my NQ long without margin and go for a free ride! If I win dinner's on IB, if I lose, I'll start a bitch thread on ET and get all the IB haters fired up! Ba-ba-ba-ba-boo-ya!"
I am already over it. The thought process was order will not execute and IB will cancel it. As simple as that. Everything else - thats your imagination.
But I am seriously questioning your trading experience here. Do you realize that on a generally bullish day, I can have long limit orders in ES, NQ, CL, GC simultaneously with margin only to fill 1 or 2 of them, depending upon whichever market moves to its limit price first. Once those 1 or 2 orders get filled, other orders should automatically not execute because of margin deficiency. There is no question of a trader having to go to all those unfilled orders and cancel them. Do you realize that lets say you get filled on GC and after 5 minutes get stopped for a 10 point loss on GC and as a result of this stop, margin again becomes available to you. If after 10 seconds, ES market is at your original limit price, your still pending order will help you to execute ES. However, according to your logic, if the trader is forced to cancel all other positions, he will have to input all other orders again after he is out of one or two of the original position. He will also lose his priority in the queue. You know futures operate on FIFO.
It is such a standard practice of the way margin trading works with a broker. Sorry but you really didn't think it through before you made your post.
Quote from gmst:
I am already over it. The thought process was order will not execute and IB will cancel it. As simple as that. Everything else - thats your imagination.
Like i said before if the order was 'green' and the price was getting close to the trigger price it should have been obvious that IB were not going to cancel it.
Different if it had a blue status and was sitting on IB's system, then it is reasonable to expect them to check it and cancel it, but still you cant depend on it and you cant assume they always will.
Sometimes they do change the margin rules without notice (as do other brokers) and there is nothing you can do about it because the account agreement gives them that right.
It is more visible in the case of IB because of their automated liquidations. They are constantly changing their software and inconsistencies do show up from time to time.
It is more visible in the case of IB because of their automated liquidations. They are constantly changing their software and inconsistencies do show up from time to time.
Quote from gmst:
But I am seriously questioning your trading experience here. Do you realize that on a generally bullish day, I can have long limit orders in ES, NQ, CL, GC simultaneously with margin only to fill 1 or 2 of them, depending upon whichever market moves to its limit price first.
Assume I have none. Then perhaps you can educate me on the consequences of making one-sided markets on 4 correlated instruments with adequate margin to carry only one (why stop there, let's add 6E, Brent, TF, and AAPL for good measure) on your "generally bullish day" when disastrous news hits or a 10-sigma market structure/fat finger event occurs and all your orders are swept simultaneously.
Quote from Daal:
Didn't IB say many times that you had 10 minutes before they liquidate your account?
Apparently, that is not true anymore. These are the timestamps from yesterday.
bought ES using limit order when free equity < initial margin@ 15:19:37
Auto-Liquidated by IB NQ @ 15:20:37
Also, on many other occasions, I have noticed they liquidate within 2-4 minutes. I have never bothered to actually note the time, but it is definitely way less than 10 minutes.
Quote from southall:
Like i said before if the order was 'green' and the price was getting close to the trigger price it should have been obvious that IB were not going to cancel it.
Different if it had a blue status and was sitting on IB's system, then it is reasonable to expect them to check it and cancel it, but still you cant depend on it and you cant assume they always will.
Not sure how current this is, anyways.
http://www.interactivebrokers.com/e...imeactivitymonitoring/order_status_colors.htm
Earlier, green standing orders used to turn purple when some other order executed and the execution resulted into using all the available free equity. However, yesterday the order didn't turn purple. As Comintel also said, I think basically with every little tweak in their order code, IB messes up and with every release something changes. We as customers have to be extra alert to everything. This has wider ramifications especially about how much confidence a customer can have if he wants to leave his account unattended for few hours. What if one component of OCO someday doesn't work and you check back your account after few hours to see both orders filled.
The lesson for me from this episode is that I will always want a pair of eyes to keep looking at my current position and current orders with any broker I trade - because any system these brokers can design my break down at the worst possible moment for me. So, better to be beware and a bit paranoid than be sorry later.