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IB customers lose $88m trading WTI crude
- Thread starter ZBZB
- Start date
How can I join the group.Greetings to you all
I'm also one of these ; exactly same situation as "Creator" i've regrettably been "able" to buy the WTI May contract at 0,40$ for one (1) Contract at the IPE (Cash settlement) around 14:08 (EST) on April 20th. I would gladly jump onboard with your telegram and you guys and follow up the situation. I already filled a 6 pages complaint to IB explaining in which i think they are in fault - My arguments might help other people and rejoin most of those express in the previous pages of this thread - Let's work together on this.
1) What do you conclude from T. Peterffy's statement on that? (1:35 to end)
Sincerely Samuel Paré
I have the exactly same experience and sent complaint to IB.
You couldn't use market orders since the bid and ask shown at the time was something like -30/-100, this was seen on TD Ameritrade platforms, other platform users please confirm. At the time it seemed like a pricing glitch or system issue.
With IB was it possible enter a market sell order when the price was negative in WTI?
Probably requested by their large institutional and bank customers, probably because they wanted to "hedge" extra risk by forgoing the sanctity and normalcy of the markets at the expense of small retail investors. And the ones who rode prices to negative $37 and then back up to $10 made $90+ in a matter of less than 24 hours.
The question to ask is why did CME enable negative prices in April?
If they hadn't enabled it, it would never of happened, not even once.
I am in the same situation.
Afaik IBKR is still looking into it.
The guy from IBKR on the phone made me quite some hope that this will be settled out of court in a way acceptable to me.
Nevertheless I am already in contact with others affected by this and also considering legal steps.
IBKRs system was not able to handle negative prices. No prices showing anymore and no orders going through. Even market sell orders didnt go through.
Furthermore they did mess up with margin req. which was way too low and probably really used a lower limit of 0.
I in fact would have been able to go long 200 QM on a 250k account... Which is crazy... And would have resultet in a loss of 3.7M(if maxed out on entry just above 0) .
I did save all the logs and can prove it all. TWS log clearly shows how price updates were dropped (considered false) and i have also my market sell orders in the log (btw. at a time when oil was only slightly negative) .
I've been trading for almost 20 years now and have never experienced something similar.
Obviously IBKR did mess up big time with a large negligence on their part of our business relationship.
They were repeatedly informed by the exchanges on the negative prices but failed to adjust their risk mgtm, their software, their margin reqs...
And they also failed to inform the customers of their inability to handle negative prices, which woulf have prevented me from entering the specific trades i took on im this situation
Btw. I absolutely agree that you are respnsible for your actions/trades and if someone went long CHF/USD or CHF/EUR and lost there on the SNB news i consider that stupid and just a "normal" risk.
But if i buy oil just above 0, with the intention to flip it for a dollar or two more higher or hitting the bid when it breaks below the support and goes to 0.00... Only to find myself basically disabled to execute my trade due to brokers negligence and not being able to do anything about it as i watch oil breaking lower and lower... Well that is some real ****.
Afaik IBKR is still looking into it.
The guy from IBKR on the phone made me quite some hope that this will be settled out of court in a way acceptable to me.
Nevertheless I am already in contact with others affected by this and also considering legal steps.
IBKRs system was not able to handle negative prices. No prices showing anymore and no orders going through. Even market sell orders didnt go through.
Furthermore they did mess up with margin req. which was way too low and probably really used a lower limit of 0.
I in fact would have been able to go long 200 QM on a 250k account... Which is crazy... And would have resultet in a loss of 3.7M(if maxed out on entry just above 0) .
I did save all the logs and can prove it all. TWS log clearly shows how price updates were dropped (considered false) and i have also my market sell orders in the log (btw. at a time when oil was only slightly negative) .
I've been trading for almost 20 years now and have never experienced something similar.
Obviously IBKR did mess up big time with a large negligence on their part of our business relationship.
They were repeatedly informed by the exchanges on the negative prices but failed to adjust their risk mgtm, their software, their margin reqs...
And they also failed to inform the customers of their inability to handle negative prices, which woulf have prevented me from entering the specific trades i took on im this situation
Btw. I absolutely agree that you are respnsible for your actions/trades and if someone went long CHF/USD or CHF/EUR and lost there on the SNB news i consider that stupid and just a "normal" risk.
But if i buy oil just above 0, with the intention to flip it for a dollar or two more higher or hitting the bid when it breaks below the support and goes to 0.00... Only to find myself basically disabled to execute my trade due to brokers negligence and not being able to do anything about it as i watch oil breaking lower and lower... Well that is some real ****.
I am in the same situation.
Afaik IBKR is still looking into it.
The guy from IBKR on the phone made me quite some hope that this will be settled out of court in a way acceptable to me.
Hopefully IB will settle customers trades at $0 or $0.01. And eat the rest themselves. If their systems didn't let you trade when the price was negative.
Although customers couldn't enter a negative price, i'm still curious to know if it was or was not possible to send a sell market order.
Even that is a bit moot, because the IB feed did not show a negative price. It looked as if the markets were locked at $0 on TWS.
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Hopefully IB will settle customers trades at $0 or $0.01. And eat the rest themselves. If their systems didn't let you trade when the price was negative.
Although customers couldn't enter a negative price, i'm still curious to know if it was or was not possible to send a sell market order.
It was not, i did try it when realizing something is very shady....
Order got submitted but didnt go to market. It was shown in dark blue state in tws.
I'm confused as to why people are saying IB should increase margin requirements. Margin requirements at IB are ridiculously high. Why should the non-spewtards be restricted from trading because the spewtards who have no understanding of risk management whatsoever, hate themselves, and want to blow up an account? The interest should be to increase the margins significantly for people who practice little to no risk management, not punish responsible people.
If oil is trading at $12, how is 8K long and 12K short not adequate margins? Because oil could fall $50 and spewtards will never get out? I mean do you think you should be holding it long from $12 to $4 (8K margin requirement if you couldn't get that) and short from $12 to $24 before you take action? It's ridiculous that online poker is illegal, but there is such a high percentage of people trading futures with way too little capital and pretty much no risk management whatsoever.
The issue with the negative prices and IB not being properly set up for that is a completely different issue. Margins should not have been increased. IB should have set up their software adequately and needs to find a way to stop completely ridiculous and irresponsible trading from people who 1) don't have money or 2) have no appreciation for losing it.
If oil is trading at $12, how is 8K long and 12K short not adequate margins? Because oil could fall $50 and spewtards will never get out? I mean do you think you should be holding it long from $12 to $4 (8K margin requirement if you couldn't get that) and short from $12 to $24 before you take action? It's ridiculous that online poker is illegal, but there is such a high percentage of people trading futures with way too little capital and pretty much no risk management whatsoever.
The issue with the negative prices and IB not being properly set up for that is a completely different issue. Margins should not have been increased. IB should have set up their software adequately and needs to find a way to stop completely ridiculous and irresponsible trading from people who 1) don't have money or 2) have no appreciation for losing it.
It could not have gone to market since the bid/ask was very wide and there were virtually no buyers. The main thing is that futures use portfolio margin, and according to CME they sent their members updated files that took into consideration negative pricing, which would have affected the SPAN model used to determine buying power requirements and maximum loss in one's portfolio, and apparent some brokers like TD Ameritrade and IB did not get the memo and didnt update. This is different from initial margin. So it seems like either or both CME and the brokers did not fulfill their duties, as CME initially stated that negative pricing may happen in the future if price settled between $8-11, but it all happened in one day. Anyways I think they should have halted trading or postponed expiration by 1 day to account for the drastic changes.It was not, i did try it when realizing something is very shady....
Order got submitted but didnt go to market. It was shown in dark blue state in tws.