interactive-brokers real-time liquidation madness

Quote from Specterx:

I'm sorry for your loss, but stories like this reassure me that IB is on top of things, that my money is safe there, and that I'm not exposed to the risks of other customers trading with excessive leverage and/or in illiquid markets subject to black swans.
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I used to believe this, but no longer for one very simple reason. I'm relatively convinced that the first "flash crash" was an opening act and that when it does occur again, it will probably be more intense and more chaotic.

So what exactly happens when even the most liquid names are bid .001, even if its only temporary, you damn well know that the auto-liquidation will not know that and scores of customers will be wiped out. The fact that a customer can have excess margin in the moments leading up to such an event, by no means ensures that after they are liquidated, they will even be solvent, more likely debit balances.

I think quite a few others share this opinion who were formerly quite happy with the notion of auto liquidations prior to HFT and perpetual flash crashes (just not widespread like in May).
 
Quote from denner:

I used to believe this, but no longer for one very simple reason. I'm relatively convinced that the first "flash crash" was an opening act and that when it does occur again, it will probably be more intense and more chaotic.

So what exactly happens when even the most liquid names are bid .001, even if its only temporary, you damn well know that the auto-liquidation will not know that and scores of customers will be wiped out. The fact that a customer can have excess margin in the moments leading up to such an event, by no means ensures that after they are liquidated, they will even be solvent, more likely debit balances.

I think quite a few others share this opinion who were formerly quite happy with the notion of auto liquidations prior to HFT and perpetual flash crashes (just not widespread like in May).
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Wrong conclusions: there are cases of human intervention when needed - for example large net liq changes from one snap shot to the next. For this reason you didn't see 30 pages of threads on liquidations after the flash crash.
 
That there weren't "thirty pages" doesn't prove or justify anything.
Give a SPECIFIC answer explaining how IB justifies liquidating a position <b>based on one rogue quote</b>, during the single daily hour of non trading?
Sounds bucket shop.

Quote from def:

Wrong conclusions: there are cases of human intervention when needed - for example large net liq changes from one snap shot to the next. For this reason you didn't see 30 pages of threads on liquidations after the flash crash.
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Quote from munnyhunny:

That there weren't "thirty pages" doesn't prove or justify anything.
Give a SPECIFIC answer explaining how IB justifies liquidating a position <b>based on one rogue quote</b>, during the single daily hour of non trading?
Sounds bucket shop.
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So what is your suggestion on how to handle this situation? Mark to fantasy when there is no or wide market - because that worked so well for our esteemed investmentbanks?

Besides, what makes a quote 'rogue'? Also, judging from the first post, this appears to have happend during rmb trading hours.
 
Quote from munnyhunny:

That there weren't "thirty pages" doesn't prove or justify anything.
Give a SPECIFIC answer explaining how IB justifies liquidating a position <b>based on one rogue quote</b>, during the single daily hour of non trading?
Sounds bucket shop.
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hmmm, now I start to think about it...:eek:
 
Quote from Pippi436:

So what is your suggestion on how to handle this situation? Mark to fantasy when there is no or wide market - because that worked so well for our esteemed investmentbanks?

Besides, what makes a quote 'rogue'? Also, judging from the first post, this appears to have happend during rmb trading hours.
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They can mark against the forward contract which is the underlying.
 
Quote from comintel:

They can mark against the forward contract which is the underlying.
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If they take your advice and decide the underlying is the "real" price, then presumably you'd be OK with their liquidating your futures position based on a wide quote in the underlying -- even if the futures hadn't moved? Think for a minute before you answer.
 
Quote from Rodney King:

If they take your advice and decide the underlying is the "real" price, then presumably you'd be OK with their liquidating your futures position based on a wide quote in the underlying -- even if the futures hadn't moved? Think for a minute before you answer.
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That would not happen. Try learning something about currencies.

Anyway I'm only talking about making a sanity check before liquidating in the situation where there is a lack of real quotes on futures and there are narrow spreads on the underlying.
 
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