IBKR Safety of Funds
- Thread starter Dicer
- Start date
This is more of a proactive risk management process. You will be worried instead if they don't.
We truly live in an era of fake news, spin and distortion.
IB was right to take the steps they have taken.
The IB CEO is correct in his assessment of the risks posed to brokerages by this unprecedented retail pump, largely based on lies and distortions (with dump to soon follow).
There is no grand conspiracy - it is simple risk management.
IB was right to take the steps they have taken.
The IB CEO is correct in his assessment of the risks posed to brokerages by this unprecedented retail pump, largely based on lies and distortions (with dump to soon follow).
There is no grand conspiracy - it is simple risk management.
Did you even watch the video? TP explicitly states that IB is solid with 9bn of risk capital backing its obligations to customers and clearing houses plus automated risk control systems.
I don't agree that it's IB's responsibility to protect the integrity of markets and shut down all trading but his point about the systemic risk that brokers (and clearing firms) without big balance sheets pose to the clearing houses is spot on. Where do the 15bn of losses from short GME options sit? Can the customers all make good? Decent chance that some smaller firms that clear with the likes of Apex, Pershing, Wedbush suffer losses from unrecoverable margin debt and there's not much cushion along some of these chains.
I don't agree that it's IB's responsibility to protect the integrity of markets and shut down all trading but his point about the systemic risk that brokers (and clearing firms) without big balance sheets pose to the clearing houses is spot on. Where do the 15bn of losses from short GME options sit? Can the customers all make good? Decent chance that some smaller firms that clear with the likes of Apex, Pershing, Wedbush suffer losses from unrecoverable margin debt and there's not much cushion along some of these chains.
There is NO systematic risk if all brokers take cash-only trades and no shorting with shares. Then there would be no risk of not being able to meet obligations from the buy-side especially from the retail level. Then if there is still risk, then it would be on the MM's side and that's not our problem. They've made enough from us. They should be able to make good on their side.
Then why did Robinhood, WeBull and others have to find liquidity overnight to handle clearing requirements? Something doesn't add up unless they all were using margin and - BOOM
Exactly, cash only or raise margin requirements and don’t have shares to borrow short. To only allow closing long positions at the very moment the big boys are throwing a tantrum via CNBC is just way to fishy c,on man. Some of these stocks were up 1000% already, before the media frenzy...where was their risk management then?
This is like a having the field goal post of one side moved further away in the middle of the super bowl because the other team is crying like a bitch
Sorry, I didn't ask clearly.
My point is:
IB doesn't have the right to ban professional traders(ie. fund managers or registered financial advisors) from trading the stock. Despite IB tried to emphasize the trading activity was illegal for rationalizing the trading restriction, the duty of care is not suitable to be applied to those professional traders.
It means: it is okay for IB to ban non-professional traders to trade that stock, but professional traders should not be banned.
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