IB customers lose $88m trading WTI crude

[ZBZB]

IB stock gapped down. Currently down 8.61%

 

[themickey]

IB stock gapped down. Currently down 8.61%

 

[329200]

IB allows futures trading in IRA accounts, if the futures go negative that means you could have negative balance in an IRA account. That does not bode well for compliance and regulatory oversight.

For example if one had $30000 in an IRA account with futures enabled, and bought 3 contracts of cash settled QMK20's at $1 and $10000 margin on each contract, and the settlement was -$37, then they would have had a loss of $19000 per contract multiplied by 3, bring the IRA account value to negative $27000. Would the customer have to recontribute into the IRA? That does not seem possible.

 

[helpme_please]

When oil prices went negative, was it possible to trade on IBKR platform? Did the software get confused and did not allow traders to trade using negative price?

 

[RedDuke]

so far got no advice and plenty of people who called me a liar with no reason.
Below is a scrsht with the trade (bought at 0.01) and another one showing current price of the contract - it’s zero which kind of proves that they never expected it to go below zero and haven’t adjusted neither charts nor orders.

View attachment 225740
View attachment 225741

I stand corrected and apologize. Best of luck!!! Would be great if you post here how it ends up being handled.

 

[creator]

When oil prices went negative, was it possible to trade on IBKR platform? Did the software get confused and did not allow traders to trade using negative price?

That’s what happened to me

 

[tradalert]

When oil prices went negative, was it possible to trade on IBKR platform? Did the software get confused and did not allow traders to trade using negative price?

The software stopped to work. They didn't execute sell orders, their risk managing systems didn't work, and they show a wrong price. Also, the margin requirement wasn't calculated correctly as their software thought price couldn't go below 0. So retail investors with tiny accounts were able to buy huge amounts of contracts.

 

[helpme_please]

That’s what happened to me

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.

 

[tradalert]

It makes you wonder if IB may have applied margin that didn't take into account that prices could be < 0.

ie - maybe you could sell a $10 put - and IB maxed out the margin requirement at $10/contract??

Yes. They did that.

 

[tradalert]

This

I’m one of the lucky ones, bought one contract at 0.01 and tried to exit at -0.4 when realized there was no opportunity no put negative price and market price also didn’t work. The price of the contract stayed at zero until today’s morning when they just closed it so it was nice to suddenly get -37k.
I can’t reach them by phone, they don’t answer my tickets and I’ve managed to reach then in chat only one time when the settlement price was being reviewed so that all they answered.

No the price is final and they liquidated all my positions.

Can anybody advise me what to do? Doesn’t look they are eager to reimburse me.
Also, am I supposed to cover my negative balance now? It’s more than I had there

Hi. There are more people in the same situation with IBKR. We are already over 20 in a Telegram group. Write me on Telegram: @tradalert