IB surprise email: UCO short had been forced to bought-in!

I can only imagine there was a big UCO holder suddenly sold massive amount of uco in his IB account right before market closed to make this happen.
 
hajimow said:
My account says it is not available for short "NOW" but things are dynamic and and it can change any time. I used to sell naked in the money calls for shares that were not available and then when the option was assigned, I was atutomatically short and they would let me keep the position :)
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Thanks for sharing. By the way is there T+2 or similar rule after short sell is bought back?
 
GloriaBrown said:
Thanks for sharing. By the way is there T+2 or similar rule after short sell is bought back?
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Yes.. same settlement as always... but also same as always: it's the price at when the order to buy-back gets filled...

And again, this doesn't necessarily have anything to do with IB and whether there was a big IB client selling their UCO shares. This could've easily been across the board with other brokers/clients affected as well.
 
hajimow said:
If you have to cover it (wait they do it for you and I believe they might not cover it and that was just a possibility warning email. I have experienced things like that) go ahead and create the same position by options.
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I agree. If I wanted to short UCO I'd sell ITM calls on USO. USO is more liquid so tighter spread than UCO. If you want real 2x leverage, just sell 2x as many contracts.
 
ajacobson said:
https://www.sec.gov/news/press-release/2012-2012-66htm

Notice they also charged the customer.

I looked at the SEC sight and the case against the customer was dismissed.
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I just finished reading the case that you cited. That customer (Feldman) is a POS and knew exactly what he was doing . He practically bullied the broker and got away with it because he's a whale. He even went as far as bragging on a message board.

After reading the customers own words I can't believe the case against him was dismissed . WTF was the SEC thinking when they decided to let him off the hook,incredible !

https://www.sec.gov/litigation/admin/2012/33-9313.pdf
 
Truth_ said:
Please educate me.

SCO is the inverse etf of UCO. A short of oil at 2x leverage. It trades at decent volume.

Why not just buy SCO, rather than a short of UCO, avoid the borrowed shares risk, and have no interest at all?

What am I missing in this little jigsaw puzzle?
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Decay from futures rolling and daily rebalancing in levered commodity ETFs benefits shorts. It may or may not be worth the borrow fee and risk of getting bought in.
 
Shadetree42 said:
Decay from futures rolling and daily rebalancing in levered commodity ETFs benefits shorts. It may or may not be worth the borrow fee and risk of getting bought in.
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Another disadvantage is the potential lose of shorting leveraged etf is thoerically unlimited but cannot gain more than 100% per trade.
 
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