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IB Very bad Market Data
- Thread starter Barbaris
- Start date
Quote from oraclewizard77:
Ok,
I read it, and the problem was Megan C did not explain it to him correctly....
oraclewizard77, re-read. The complaint is not related to maxed-out margin or a short-stock position at the time of liquidation.
The automatic liquidation of a fully-paid security in the trader's account resulted from a one penny shortfall when a monthly interest fee of .20 was assessed. The IB automatic liquidation software sold stock in the trader's account to raise cash to cover the penny.
Meanwhile, here's more from 'Megan C' who is brought-in to a chat when the topic moves from "General" to "Trade Problems":
http://www.zerohedge.com/article/stop-trading-0
I still don't quite follow how he was charged interest for a positive balance. I've never encountered something like that with IB.
Quote from screw_jack:
I still don't quite follow how he was charged interest for a positive balance. I've never encountered something like that with IB.
Regarding the Zero Hedge locate posting: donât believe everything you read on anonymous blogs, particularly when they are posted (or referenced) by dissatisfied clients or competitors. This was fabricated by aggregating unrelated content and omitting content that was relevant.
In any event, it is possible for an account to be charged interest even if the aggregate cash balance nets to a credit. This most commonly occurs as a result of the following:
1. Maintaining a short balance in one currency vs. a long balance in another (as each currency is subject to its own benchmark rate);
2. Maintaining short stock positions having a market value in excess of the cash credit balance (as cash must be posted with the lender to secure the borrow);
3. Where the credit balance includes unsettled funds (interest credits and debits are only calculated on settled balances as that is when proceeds are actually received/delivered); and
4. When the account is borrowing funds against securities positions and holds long cash for margin purposes in the commodities segment (securities and commodities segments are subject to separate segregation pools and cash investment guidelines by regulation).
See the following link for additional details: http://ibkb.interactivebrokers.com/node/667
Quote from IB-AN:
Regarding the Zero Hedge locate posting: donât believe everything you read on anonymous blogs, particularly when they are posted (or referenced) by dissatisfied clients or competitors. This was fabricated by aggregating unrelated content and omitting content that was relevant.
In any event, it is possible for an account to be charged interest even if the aggregate cash balance nets to a credit. This most commonly occurs as a result of the following:
1. Maintaining a short balance in one currency vs. a long balance in another (as each currency is subject to its own benchmark rate);
2. Maintaining short stock positions having a market value in excess of the cash credit balance (as cash must be posted with the lender to secure the borrow);
3. Where the credit balance includes unsettled funds (interest credits and debits are only calculated on settled balances as that is when proceeds are actually received/delivered); and
4. When the account is borrowing funds against securities positions and holds long cash for margin purposes in the commodities segment (securities and commodities segments are subject to separate segregation pools and cash investment guidelines by regulation).
See the following link for additional details: http://ibkb.interactivebrokers.com/node/667
IB-An, Thank you for clarifying the conditions under which a customer might be charged a monthly interest fee even when there is a positive cash balance.
You mention that the post was fabricated.
Is it true that the automatic liquidation software sold the customer's fully-paid securities to cover a deficit of a penny after the monthly fee was charged?
If yes, then how much stock was sold to cover the penny?
Does the IB automatic liquidation system liquidate positions in minimum amounts?
Has IB updated it's automatic liquidation software in order to prevent automatic liquidations of customer positions in accounts that carry no margin balance and therefore pose little risk of 'blowing up' and endangering the firm's capital?
IB-An, while you are addressing a related issue, will you confirm whether the following statements by IB regarding automatic liquidation policies are accurate?
If they are not, then these statements may provide a false sense of security regarding the potential impact of IB's automatic liquidation system.
From:http://www.elitetrader.com/vb/showthread.php?s=&threadid=108226
If they are not, then these statements may provide a false sense of security regarding the potential impact of IB's automatic liquidation system.
From:http://www.elitetrader.com/vb/showthread.php?s=&threadid=108226
Quote from ids:
We do not liquidate immediately. There is 10 minutes grace period.
We do not liquidate when market is shallow in general.
We do not liquidate even if we like to liquidate some positions if there is no correspondent offer. This situation could be ugly if market moves fast.
Also regarding the Zero Hedge chat transcript with "Megan C," would you confirm whether this automatic liquidation resulted from an algo error and whether the positions were restored accordingly?
As IB programmer ids has previously stated on these forums, IB will rebuild accounts that have been harmed by automatic liquidation algo errors.
From:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=63810&perpage=6&pagenumber=26
As IB programmer ids has previously stated on these forums, IB will rebuild accounts that have been harmed by automatic liquidation algo errors.
From:
http://www.elitetrader.com/vb/showthread.php?s=&threadid=63810&perpage=6&pagenumber=26
Quote from ids:
We are doing hundreds if not thousands of auto-liquidations per day. If the algorithm is horrible, then angry customers tore us to small pieces long time ago. The algorithm is smart enough to not harm the account unnecessarily. The best proof is that Option Trader was not supported by a bunch of customers with similar problems.
Errors in the automatic liquidation algorithm are possible. We are fixing these problems ASAP. I know several cases when bugs caused bad liquidations and customers received a full compensation or we rebuilt their account, which was expensive sometimes. That happens VERY rarely. Generally, it is your responsibility to not allow any liquidation to start.