IB Margin Changes

[sprstpd]

Quote from Options12:

Jayre, you have a good question. What about Timber Hill picking up the opposite side of trades during force liquidations? Does Timber Hill ever do this?

Does it matter who takes the other side of your trade during a forced liquidation? You are still going to lose the same amount of money due to your own reckless use of leverage.

 

[jayre]

Quote from sprstpd:

Does it matter who takes the other side of your trade during a forced liquidation? You are still going to lose the same amount of money due to your own reckless use of leverage.

It makes a hack of a difference, that means there is a CONFLICT OF INTEREST when it comes to setting policy, on margin and auto liquidation.

That would also explain why IB is auto liquidating instantly something “no other broker that I am aware of, does” (I called infinity and they say that they do not auto liquidate and you have time till end of the day to cover your margin deficiency)

 

[sprstpd]

Quote from jayre:

It makes a hack of a difference, that means there is a CONFLICT OF INTEREST when it comes to setting policy, on margin and auto liquidation.

So you would feel happier if Goldman got your liquidated shares than IB when you were recklessly overleveraged?

 

[def]

Quote from Options12:

OK, how about IDS? Can you confirm that he or she works for IB? If so, what division?

Yes and programming.

On the other question.
I am not sure what is difficult to understand with the word wrong but I will restate another way.

You stock X. You send a market order. The order is sent to the exchange. Whoever is on top of the book gets the fill.

 

[jayre]

Quote from def:

Yes and programming.

On the other question.
I am not sure what is difficult to understand with the word wrong but I will restate another way.

You stock X. You send a market order. The order is sent to the exchange. Whoever is on top of the book gets the fill.

Def,
You keep avoiding answering the question. The question is (for the 5th time)
If Timbar Hill has been profiting from these IB auto liquidations, yes or no?
I know the answer and that explains a lot of things, but you have a problem admitting it.

 

[Daal]

Quote from jayre:

Def,
You keep avoiding answering the question. The question is (for the 5th time)
If Timbar Hill has been profiting from these IB auto liquidations, yes or no?
I know the answer and that explains a lot of things, but you have a problem admitting it.

The answer is yes if they they are bid/offering the best price

 

[jayre]

Quote from sprstpd:

So you would feel happier if Goldman got your liquidated shares than IB when you were recklessly overleveraged?

Yes, I would be much happier if Goldman got the shares, because that would take away the incentive for IB autoliquidate their clients account without at least a short notice, that would also put my interest and the brokers interest at the same page just like it is at any other broker.

Right now Timber Hill makes the most money when IB client loose (4th quarter 2008, 3d quarter 2011)

 

[def]

Quote from Daal:

The answer is yes if they they are bid/offering the best price

Not necessarily because buying into a falling and fast market is no guarantee for example. Nevertheless, being on the other side of a liquidation trade is few and far between. There simply aren't that many liquidations and take into account the market share of TH in any particular product and this really becomes a moot point. The problem for anyone shouldn't be who is on the other side of a liquidation but why you are being liquidated.

 

[sprstpd]

Quote from jayre:

Yes, I would be much happier if Goldman got the shares, because that would take away the incentive for IB autoliquidate their clients account without at least a short notice, that would also put my interest and the brokers interest at the same page just like it is at any other broker.

Right now Timber Hill makes the most money when IB client loose (4th quarter 2008, 3d quarter 2011)

Well if you don't like the policy, don't trade at IB. If I am being liquidated, I could care less who gets my shares.

 

[Daal]

Quote from def:

Not necessarily because buying into a falling and fast market is no guarantee for example.

Come on man, they are a market maker, its part of the risk. Bottom line is that autoliquidation leads to market orders which usually benefits market markers