IB customers lose $88m trading WTI crude

[running_bare]

LOL @ dipshits

Symbol CL (WTI,NYMEX) is physically settled

Symbol WTI (IPE/ICE) is cash settled

So latter can trade until expiry last minute if no possibility of delivery

You are a f.ckn lair and a troll. IB prevented any orders on Monday for May contract. If you traded live you would know it. Go and hide under the rock where you crawled from.

In fact, I'm shocked that IB even lets you take the trade in the first place since the May Oil contract is so near to expiry and IB clients have no means to take physical delivery.

 

[creator]

I'm sorry to hear that. I saw your screenshot about a trade taken when oil price was still positive. If you can't get out of your position when price was negative, then IB platform screwed you. Although I'm a fan of IB, I believe this time this is IB's fault if the software wasn't smart enough to allow clients to get out of their positions when price went negative.

In fact, I'm shocked that IB even lets you take the trade in the first place since the May Oil contract is so near to expiry and IB clients have no means to take physical delivery.

Used to be a fan of IB too and believing in the best but they are still are not ready with their decision and meanwhile charged about 100 chf of interest on my negative account.

Just one more proof of their system malfunction:

https://www.interactivebrokers.co.uk/forum/#/post/28766

 

[snowman80]

Used to be a fan of IB too and believing in the best but they are still are not ready with their decision and meanwhile charged about 100 chf of interest on my negative account.

Just one more proof of their system malfunction:

https://www.interactivebrokers.co.uk/forum/#/post/28766

that’s some pickle you find yourself in - i feel for you

do you know if contract specs and ice exchange rules allow for negative prices. that’s probably your best shot at getting a favorable resolution.

i doubt IB will make you whole if these trades stand. they probably put in some sort of technology liability protection language in the account agreement.

best of luck

 

[helpme_please]

LOL @ dipshits

Symbol CL (WTI,NYMEX) is physically settled

Symbol WTI (IPE/ICE) is cash settled

So latter can trade until expiry last minute if no possibility of delivery

Thanks for explanation. No thanks for calling me dipshits. No need to be rude.

 

[RedDuke]

LOL @ dipshits

Symbol CL (WTI,NYMEX) is physically settled

Symbol WTI (IPE/ICE) is cash settled

So latter can trade until expiry last minute if no possibility of delivery

Rude. I already apologized to OP. We only trade CL so I was unaware about ICE contract innerworkings.

 

[qwerty11]

Anyone know if WTI on ICE went negative like CL did?

Yes, of course.

 

[longshort]

The more I look into what happened, the more I think someone set this up.

1. WBSK20 is cash settled based on the CLK20 settlement price of negative $37.

2. That price of CLK20 happened to be very, very near the session low of negative $40 a barrel.

3. After reaching that negative price, CLK20 quickly recovered to positive $9 a barrel before trading stopped.

4. WBSK20 apparently went into limit down on 4/20/20, my data provider's session low is negative $7. That means brokers were likely unable to liquidate their clients and forced to hold into expiration.

5. CL volume already shifted from May to June, so easier to influence CLK20 price on 4/20/20.

I believe some people knew these mechanics very well and were sitting on a big WBSK20 short position and drove down the price of CLK20 just at the right time relevant for determining WBSK20 cash settlement price. According to Peterffy, they made half a billion $ on this trade.

 

[beefcaketrade]

I wonder if any clients were short and what the offsetting winning positions are to the clients that lost to arrive at the ($88M) net.

My guess is most clients were probably long though. The psychology must have been, buy the dip because it's literally at $0, while not believing or knowing that the price can go negative.

If the S&P500 was at 10, you'd buy too right? Back up the truck in fact. Can't go any lower. Except crude was allowed to go negative. So it was actually an unbounded trade and 0 is not actually the floor. Ouch.

The more I look into what happened, the more I think someone set this up.

Always a possibility with illiquid markets. Especially with all the talk in days prior about negative prices and the instrument being modified to allow for negative pricing. Somebody must have wondered "hmm wonder what happens if it actually goes negative?".

This event reminds me of the short vol trade (e.g. XIV) a while ago that cause a lot of people go go bust. Somebody must have seen a weakness and pressed it and losers and winners were created as a result.

 

[southall]

I wonder if any clients were short and what the offsetting winning positions are to the clients that lost to arrive at the ($88M) net.

$88M is not the net losses (differences between winners and losers)
It is the total of negative balances in IB accounts as a result of trades in these markets.
The losing customers lost a lot more than that for sure.
Any winning accounts are irrelevant to IB.

 

[snowman80]

i guess question is: given the magnitude of these losses, and the speed and the way it all went down, is your capital safe if you got money in any of the rinky dink fcms?