Interactive Brokers and automatic liquidation
- Thread starter newwurldmn
- Start date
Well at least one IB rep who read this series of posts and and read the communication record of this incident has responded with the comment that Interactive Brokers "has to do better."
The reason for the delay in contacting IB was I did not have access to all the information I required in order to determine if a problem truly existed. There is no statute of limitations on reporting a trade error that would require a customer response in seconds rather than hours. The report was made that day during the same session during which the trade occurred.
Second, this was not a stop loss. This was a stop market to initiate a position. There was no sudden evaporation of liquidity. During for at least twenty minutes after my stop price was offered, IB's own time and sales data show hundreds of transactions for tens of millions of dollars traded at or with three pips of my stop price. My order was being "held and monitored" in IB's parlance. It was simply not monitored well enough to be sent into the market when the price was offered.
And again, when this same situation occurred in the past, IB made it right with hours of my trouble ticket being filed. In that case, I had a stop entry that was not filled for nearly 30 minutes, and when it was filled, it was filled 80 pips away from where it should have gone to the market. In that case, time and sales clearly showed that there was ampleopportunity to fill the stopmarket order at a price within 1-3 pips of the entry order price. In that case, IB made compensation within hours. This case has dragged on for over a month.
What you three think really doesn't matter. Though it was not my intention, my posts here got IB's attention, and as a result help is apparently on the way. I should thank you three, because it was your posts in response to my issue that prompted me to post more here than I had intended, and that perhaps helped get this matter in front of fresh eyes at IB.
I'll leave a final update here in this thread as to whether IB decides to provide the requested trade adjustment or not.
The reason for the delay in contacting IB was I did not have access to all the information I required in order to determine if a problem truly existed. There is no statute of limitations on reporting a trade error that would require a customer response in seconds rather than hours. The report was made that day during the same session during which the trade occurred.
Second, this was not a stop loss. This was a stop market to initiate a position. There was no sudden evaporation of liquidity. During for at least twenty minutes after my stop price was offered, IB's own time and sales data show hundreds of transactions for tens of millions of dollars traded at or with three pips of my stop price. My order was being "held and monitored" in IB's parlance. It was simply not monitored well enough to be sent into the market when the price was offered.
And again, when this same situation occurred in the past, IB made it right with hours of my trouble ticket being filed. In that case, I had a stop entry that was not filled for nearly 30 minutes, and when it was filled, it was filled 80 pips away from where it should have gone to the market. In that case, time and sales clearly showed that there was ampleopportunity to fill the stopmarket order at a price within 1-3 pips of the entry order price. In that case, IB made compensation within hours. This case has dragged on for over a month.
What you three think really doesn't matter. Though it was not my intention, my posts here got IB's attention, and as a result help is apparently on the way. I should thank you three, because it was your posts in response to my issue that prompted me to post more here than I had intended, and that perhaps helped get this matter in front of fresh eyes at IB.
I'll leave a final update here in this thread as to whether IB decides to provide the requested trade adjustment or not.
"When I inquire, I am simply told that "senior management is aware of the issue."
Yes... This is corporate speak for:
If you don't do anything to bring this up to us again and again and in many other irritating ways... to bad for you... we have a business to run... period... end of story...
edge...
Glad to know what I think doesn't matter. Next time you post, why don't you put that qualifier in your post...something like this: "BTW, anyone who responds to my post please be aware that what you say or think does not matter". That would have saved me alot of time. I'd say good luck to you, but quite frankly I could give a crap! LOL!
OldTrader
newwurld, I think in a portfolio margin account you have more time to cover a shortfall than in a reg T account--
this is from Interactive Bbrokers' statement on portfolio margin below. Check out numbers 7 & 8.
SPECIAL RULES FOR PORTFOLIO MARGIN ACCOUNTS
5. A portfolio margin account may be either a separate account or a sub-account of a customerâs standard margin account. In the case of a sub-account,
equity in the standard account will be available to satisfy any margin requirement in the portfolio margin sub-account without transfer to the sub-account.
6. A portfolio margin account or sub-account will be subject to a minimum margin requirement of $.375 for each listed option, unlisted derivative and
security futures product, multiplied by the contractâs or instrumentâs multiplier, carried long or short in the account. Other eligible products are not subject
to a minimum margin requirement.
7. A margin deficiency in the portfolio margin account or sub-account, regardless of whether due to new commitments or the effect of adverse market
movements on existing positions, must be met within three business days. Failure to meet a portfolio margin deficiency prior to the end of the third
business day will result in a prohibition on entering any new orders, with the exception of new orders that reduce the margin requirement. Failure to meet
a portfolio margin deficiency by the end of the third business day will result in immediate liquidation of positions on the fourth business day, to the extent
necessary to eliminate the margin deficiency.
8. Any shortfall in aggregate equity across accounts, when required, must be met within three business days. Failure to meet a minimum equity
deficiency prior to the end of the third business day will result in a prohibition on entering any new orders, with the exception of new orders that reduce
the margin requirement, beginning on the fourth business day and continuing until such time as the minimum equity requirement is satisfied or all
unlisted derivatives are liquidated or transferred out of the portfolio margin account to the appropriate securities account.
this is from Interactive Bbrokers' statement on portfolio margin below. Check out numbers 7 & 8.
SPECIAL RULES FOR PORTFOLIO MARGIN ACCOUNTS
5. A portfolio margin account may be either a separate account or a sub-account of a customerâs standard margin account. In the case of a sub-account,
equity in the standard account will be available to satisfy any margin requirement in the portfolio margin sub-account without transfer to the sub-account.
6. A portfolio margin account or sub-account will be subject to a minimum margin requirement of $.375 for each listed option, unlisted derivative and
security futures product, multiplied by the contractâs or instrumentâs multiplier, carried long or short in the account. Other eligible products are not subject
to a minimum margin requirement.
7. A margin deficiency in the portfolio margin account or sub-account, regardless of whether due to new commitments or the effect of adverse market
movements on existing positions, must be met within three business days. Failure to meet a portfolio margin deficiency prior to the end of the third
business day will result in a prohibition on entering any new orders, with the exception of new orders that reduce the margin requirement. Failure to meet
a portfolio margin deficiency by the end of the third business day will result in immediate liquidation of positions on the fourth business day, to the extent
necessary to eliminate the margin deficiency.
8. Any shortfall in aggregate equity across accounts, when required, must be met within three business days. Failure to meet a minimum equity
deficiency prior to the end of the third business day will result in a prohibition on entering any new orders, with the exception of new orders that reduce
the margin requirement, beginning on the fourth business day and continuing until such time as the minimum equity requirement is satisfied or all
unlisted derivatives are liquidated or transferred out of the portfolio margin account to the appropriate securities account.
Amateur hour on ET... "I'm really really mad, but not mad enough to change brokers."
Maybe so but portfolio margin is an entirely different product than Reg T. Requirements are calculated once each night using a highly complex algorithm (see TIMS on the OCC site)
Simply liquidating to meet a margin call doesn't work in a portfolio margin account the way it might "work" in a portfolio of Reg T assets or cash. The regulators who grant portfolio margin privileges in the U.S. have already established that liquidations to meet a margin call should not be part of the portfolio margin dynamic.
Interactive Brokers notes that because of the once-a-day TIMS calculation, portfolio margin calculations are static throughout the day.
Their system may have intraday look-forward capabilities to help guide the trader in selecting constructive portfolio margin trades, but it can't decisively say whether a portfolio margin margin-deficiency has occurred until TIMS does it's thing after the close.
I hope this helps your understanding of portfolio margin.
Simply liquidating to meet a margin call doesn't work in a portfolio margin account the way it might "work" in a portfolio of Reg T assets or cash. The regulators who grant portfolio margin privileges in the U.S. have already established that liquidations to meet a margin call should not be part of the portfolio margin dynamic.
Interactive Brokers notes that because of the once-a-day TIMS calculation, portfolio margin calculations are static throughout the day.
Their system may have intraday look-forward capabilities to help guide the trader in selecting constructive portfolio margin trades, but it can't decisively say whether a portfolio margin margin-deficiency has occurred until TIMS does it's thing after the close.
I hope this helps your understanding of portfolio margin.