IB trashes account - what would TOS do?
- Thread starter lejmorro
- Start date
same thing happened to me today. The only position i have in my account is es reverse calender spread. I calculated exactly how much loss i will take from theta and vega and had a $5000 excess liquidity.
Then when i come home today from work, it freaking liquidated 2 of my contracts at 4:30PM!!!!! The contracts at the time had a 30pt bid/ask spread, and the fucking thing went and hit one of my legs at market price, and of course all went to hell as the combo is no longer balanced and it then hit my other leg at market too.
Now my excess liquidity is flipping back and forth between $100 and $1500 and i am getting spammed with margin violation emails. I am going to up at 7:30 tomorrow and trying to close out more of my positions to bring back more excess liquidity, hopefully it wont go and start liquidating my contracts in the middle of night.
I really dont know what's happening, whether it was my stupidity or IB's margin calculation changed, or a bug. Reverse calendar spread has well defined risk and today is even a great day as vix crashed and the position is short vega. I still have no idea how it went from +$5000 excess to liquidating my position at fire sale when the market is moving in my favor!!
Of course calling IB doesnt do crap, this is one of the downsides you have to accept with IB for able to use their wide range of products. This compared to optionsxpress, where i had a margin warning a long time ago from a spike and the vp of their margin monitor team was email/on the phone with me within 30 mins and we worked out a method together that made sense based on the combos i had.
I loss about $3k today from the liquidation, the worst part is i still dont know how my excess went from +5000 to negative.
Then when i come home today from work, it freaking liquidated 2 of my contracts at 4:30PM!!!!! The contracts at the time had a 30pt bid/ask spread, and the fucking thing went and hit one of my legs at market price, and of course all went to hell as the combo is no longer balanced and it then hit my other leg at market too.
Now my excess liquidity is flipping back and forth between $100 and $1500 and i am getting spammed with margin violation emails. I am going to up at 7:30 tomorrow and trying to close out more of my positions to bring back more excess liquidity, hopefully it wont go and start liquidating my contracts in the middle of night.
I really dont know what's happening, whether it was my stupidity or IB's margin calculation changed, or a bug. Reverse calendar spread has well defined risk and today is even a great day as vix crashed and the position is short vega. I still have no idea how it went from +$5000 excess to liquidating my position at fire sale when the market is moving in my favor!!
Of course calling IB doesnt do crap, this is one of the downsides you have to accept with IB for able to use their wide range of products. This compared to optionsxpress, where i had a margin warning a long time ago from a spike and the vp of their margin monitor team was email/on the phone with me within 30 mins and we worked out a method together that made sense based on the combos i had.
I loss about $3k today from the liquidation, the worst part is i still dont know how my excess went from +5000 to negative.
I completely disagree. The way for IB to go insolvent is to call each person having margin issues and trying to work the problem out with them. Meanwhile, who knows where their positions trade to. I could care less if customers at IB go insolvent, I care that my money is safe with IB (i.e., that IB does not go insolvent).
And IB does change their margin requirements based on the volatility of the market. I see many threads bitching about this and how it is unfair.
I want my margin requirement to be as low as reasonably possible.
I couldn't care less if other customers sell at what could in hindsight be the worst possible moment. more likely it was a window opportunity to close the position before the position worsens later in the day.
IB is not my partner. I don't expect them to call tens or hundreds or thousands of customers because of margin issues.
one thing i like about IB is they treat customers all the same regardless of size.
IB keeps expenses low ( commissions and proper routing of orders) for everybody by not wasting time and money negotiating with customers.
TOS gives you way more time. I found the same problem, where IB would close you out immediately say if they market is going to open down big, you only have 10 min to liquidate. I had one time where one of my stocks went down after hours, so IB sold my futures contracts after hours to cover a margin call that happened after hours on the stock. TOS will give you the usual industry norm which i think is three days. If you stay with IB you have to be really careful, more so then most other brokers to be safe.
I can't see why IB can't make their auto liquidation a little more intelligent at least in the case of ditm put spreads - maybe I'll make it a suggestion.
woke up and my excess liq is back at $2500, i closed out more at around -3pt each to bring it up to $10k. I will never let it fall below $10k going forward to avoid this nightmare with IB auto liquidation engine again.
The problem with IB isnt their auto liquidation mentality but the lack of intelligence behind it. I mean who the hell tries to auto liquidate options in after hours when there is NO market especially when the position is not directional. All they had to do was wait until today's market hours before liquidating.
The problem with IB isnt their auto liquidation mentality but the lack of intelligence behind it. I mean who the hell tries to auto liquidate options in after hours when there is NO market especially when the position is not directional. All they had to do was wait until today's market hours before liquidating.
you sit on the chair you make
