IB customers lose $88m trading WTI crude

qwerty11 said:
I also don't understand. It was widely discussed that the negative day was the last trading day, but the next day it still seemed to be trading (below and above 0 from what I remembered). Maybe an oil expert can chime in...
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The IB losses were on the ICE WTI contract. It stopped trading on Monday and settled to Monday NYMEX closing price.
The NYMEX May contract final trade day was Tuesday.
https://www.theice.com/products/213/WTI-Crude-Futures
 
Overnight said:
Let's just not have this intellectual exercise on negative prices any longer? Oy! Negative prices of energy are just bad juju for the world. Be glad for now that it happened for one day only.
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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.
 
Did anyone try market order if it would go through? Kinda risky as the spreads may be horrendous at the time. But if you must get out you must get out I guess.
 
MtrGuy said:
Hi,

Just as Creator, I found myself locked with 2 contracts when the price went negative.
I had bought those contracts above $5 and was actlively monitoring the market.

When my TradingView platform indicated a negative price, I made MANY attemps to enter some exit orders, whithout success since IB woudn't allow me to enter null or negative prices. I was hands tied, looking the prices dip further while IB platform was still showing me 0.01 prices. The worst is that there is no record of these attempts, since it was not feasible.

I think that they settled all positions at -$37.63, but I am not sure if they liquidated some positions at different prices whithin the last 15 minutes.

I sent them a complaint, making clear that I hold them accountable for unallowing me to liquidate my position when we crossed 0. Again, I was not overleveraged and actively monitoring the position.

I am looking at various angles to make my case:

- Inability of the platform to manage and recognize negative prices.

- The cutoff policy might also be an interesting lead though I am not sure what it means exactly.
In addition, the inability of IB (15% of open interest at expiry) and some other platforms to adapt margin requirements to negative prices acted as fuel on the fire since it enabled customers to overleverage some positions at the very last moment (when the price approached 0).

- Also I would be interested to know how other platforms reacted:
1) Have they enabled their customers to stop their positions?
2) Have their margin requirement tool work properly?
My guess is that a lot of them performed better.
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Dear MtrGuy

I read carefully your post and this exactly what happened to me as well. I also had few contracts of WTI that created a large loss. I actually was looking for advices and help and also I wish to start a collective legal action against IB and CME. I was wondering if you know any blogs, Facebook page where we can join our efforts and energy to collect findings and potentially organise a join legal action against IB and CME if suitable on the above subject.

My point and agree with you is that
- IB did not show negative price on my system on the trading day, I inserted my purchase at 0.5 usd not knowing the price was already on negative, which did not show in IB trading system. Then IB account showed that my execution made at -0.75 USD and when I tried to sell out to exit immediately, I did not see any actual price as it showed still at above 0.01 USD.
- My other platform did not allowed me to purchase the same invest on the same day, same time but why IB did. I only assume that others have enabled not to execute on purchasing at negative price and this way protect the firm and the customers.
 
To sum up, 3 contracts are involved, 2 are cash settled.
On April 20, IB customers could trade either QM May 20 or WTI May 20.

Main specifications follow:

CL May20 physical delivery, last trading date APR 21 '20 14:30 EST, Nymex, multiplier 1000
QM May20 cash, last trading date APR 20 '20 14:30 EST, Nymex, multiplier 500
WTI May20 cash, last trading date APR 20 '20 19:30 BST, ICE, multiplier 1000

Monday, 20 Apr 2020 Settle:
CL May 20: -37.63
QM May 20: -37.63
WTI May 20: -37.63

Monday, 21 Apr 2020 Settle:
CL May 20: 10.01
 
d08 said:
Forex causes losses, then oil futures. What do they do? raise margins for equities.
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It is all about protecting the Peterfly's Billions.

IB customers in aggregate must have massive equity positions.

Perhaps Peterfly should take out $7 billion as a dividend. Then he can think more rationally.
 
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creator said:
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
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Hi Creator, I believe you and I am on the same page with you.
I did not see any negative pricing on IB on 20 April.
I have lost all my fund as well.They executed on negative price but my account still showing the positive 0.01 USD till the morning of 21 April.
I only could think that IB did not have the negative pricing on the platform, which I could not see nor to put an order for negative price to exit.
Hope we can cope to send the message to IB and to further investigate the situation.
 
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