IB close-out advisory

def said:
The figures for availability are updated but do note hard to borrows do get taken up and w/o knowing your size, I'll have to venture a guess that the size you actually sold wasn't that large in relative terms and thus it would be understandable the limited availability was used up or the counter-party bought in the following day.

As for the buy-in, I'll have to double check but I suspect the buy-in would have occurred MOO or shortly thereafter and within a price that would not have moved the market substantially as our price filters shouldn't allow such large moves (which is a regulatory issue all by itself). I'll have to get back to you on the timing for US orders if not closed out during the prior day T session. The good thing, which goes back to my first post is that we have an active SLB team behind the scenes looking to source stock and prevent buy-ins which fortunately occurred in this case.
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And one more question if I may: is it possible to create multiple sub-accounts with IB to contain losses in the case of a mishap of this kind? Say 10 sub-accounts where one massive errors wipes out 1 sub-account leaving the other 9 intact?
 
Tonyf, I believe your fears of a portfolio wipe-out are unfounded as we have filters that should prevent large movements in stocks and the executions are done after the open. But if you are really shorting stocks that are HTB with very low volatility, you may want to rethink your strategy or perhaps look into hedging strategies if the potential for a blow out is probable.

I followed up with our US office to confirm the US process. The buys are not pre-open or MOO.

We notify clients there may be a closeout (reg 204. https://ibkr.info/article/3239) after 3:30 PM EDT and then again after the market close. The actual buy order is submitted at the open but depending on size it could be submitted as a VWAP or perhaps another algo.

Note: the team does resolve the vast majority of issues and if you have hard to borrow shorts with reasonable size, contact the SLB customer service desk who will do their best to provide some color.
 
def said:
Tonyf, I believe your fears of a portfolio wipe-out are unfounded as we have filters that should prevent large movements in stocks and the executions are done after the open. But if you are really shorting stocks that are HTB with very low volatility, you may want to rethink your strategy or perhaps look into hedging strategies if the potential for a blow out is probable.

I followed up with our US office to confirm the US process. The buys are not pre-open or MOO.

We notify clients there may be a closeout (reg 204. https://ibkr.info/article/3239) after 3:30 PM EDT and then again after the market close. The actual buy order is submitted at the open but depending on size it could be submitted as a VWAP or perhaps another algo.

Note: the team does resolve the vast majority of issues and if you have hard to borrow shorts with reasonable size, contact the SLB customer service desk who will do their best to provide some color.
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OK, will take it up with the "SLB" desk - how do I reach them? There is no SLB option when calling the IB helpline.
 
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