Interactive Brokers fails to dismiss ex-client’s complaint over negligent position liquidation

Not true. Margin deficiencies can occur in any period, volatile or not. A deficiency simply means that the total equity cannot fully cover the collateral requirements anymore. That can happen even in markets when price trends very slowly against the position in someone's account.

Your next accusation that IB has too much market exposure world wide is actually a good thong: it's called diversification.

I love the auto liquidation feature. It protects my accounts and the ones of other fellow clients. If someone cannot cover the margin requirements then it's THEIR fault and positions should immediately be liquidated.

IB does have trouble with certain margins on spreads or the like and offsetting margins that they don't honor. That is a problem. What is not a problem are overnight margin requirements. Anyone who is getting into deficit just flew too close to the sun (or moon) and got rightly shredded to pieces.

Rickshaw Man said:
The time is question is clearly a volatile period or the option positions would not have been liquidated. IB clearly has to much exposure to the markets world wide and lean to heavily on algo to protect them. I have never seen a broker raise margin requirements as fast as IB. I can say they have the highest overnight futures margin.
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GRULSTMRNN said:
No way that SPX puts premium would change >78 dollars within 19 seconds. Not on that day, perhaps during the flash crash. And no, quotes in index options during trading sessions are not 0.15/85 wide for sure.
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seems crazy but the SPX did have an 8%+ range that day
 
GRULSTMRNN said:
Well it did not. Is it possible to stay on topic and to not make it personal again like in every thread?
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I think you are confusing the actual (fair value) price with the posted bid/ask spread. Both sides back away all the time, not just during flash crashes. During big employment numbers, scheduled Fed announcements, you see both sides lift for seconds at a time. It's very easy to see how an ill timed market order thrown into that could result in an absolutely atrocious fill. People here have experienced it personally.
 
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