Liquidation on low volume, high beta stocks

Matt, broker cannot "make a forward-looking prediction whether it will retrace". This is quite a dangerous idea. If account lost money, it could easily lose more.
 
ids said:
Matt, broker cannot "make a forward-looking prediction whether it will retrace". This is quite a dangerous idea. If account lost money, it could easily lose more.
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Read what I said again.
I said "it's very hard to look at the individual account, analyze the risk, and then make a forward-looking prediction whether it will retrace"

In other words, it's impossible.
 
JSOP said:
First of all, it's "wiped out your account" not "whipped out your account". Your account is not whipped cream that you just whip out !! Just an FYI....... :(
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Welp his account is whipped cream now.
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Pump and Dump happens. It is a standard tactic. Your job is to not be on the wrong side. Know that it happens with certain stocks and other instruments. If it helps, I have been on the wrong side several times and the right side more times, so net I think I am probably ahead. I actually has a strategy for it that was abandoned for various reasons.
 
Bad_Badness said:
Pump and Dump happens. It is a standard tactic. Your job is to not be on the wrong side. Know that it happens with certain stocks and other instruments. If it helps, I have been on the wrong side several times and the right side more times, so net I think I am probably ahead. I actually has a strategy for it that was abandoned for various reasons.
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Was not profitable enough? Or were there other reasons?
 
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After seeing mskl's post, I looked at a chart for KELYB. Seems the same sort of think happened August 11, price went from 18-78. so, unless you do absolutely no digging before you buy into a position, you would have had adequate warning that it COULD happen, because it HAD happened, less than 2 weeks ago.
Stops, man, stops. Don't leave home without them.
 
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old coot said:
View attachment 237839 After seeing mskl's post, I looked at a chart for KELYB. Seems the same sort of think happened August 11, price went from 18-78. so, unless you do absolutely no digging before you buy into a position, you would have had adequate warning that it COULD happen, because it HAD happened, less than 2 weeks ago.
Stops, man, stops. Don't leave home without them.
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I highly doubt that stops would have saved him... IBKR has "protective" algorithms that will reprice limit orders to "reasonable" levels. Even market order are capped. In such a stock this means you wont be able to get out aftee a volatility halt as they limit your buy order below current market price and only lift it higher aftee some time... You are at risk of missing the exit completely if it just runs from volatility halt to volatility halt.
 
vzhig said:
IB has whipped out my account today. Here's how it happened:

I had a short position in KELYB. The stock has a very low float and due to manipulation has sky-rocketed from $26.8 to $90. Different share class of the same company - KELYA - didn't move at all. Which, to any normal broker, would indicate that the severe mispricing at $90 was a very temporary situation and would correct itself very quickly.

But IB is not a normal broker! They've auto-liquidated my position at $85, whipping out 90% of my account. I had money at my bank, but they gave me NO WARNING and NO TIME to post additional margin. They say it's their policy to always auto-liquidate, no matter what. If price of your position spikes erroneously, they'll auto-liquidate it. NO MATTER WHAT!

The very same minute they liquidated my position at $85, the stock dropped to $75 and kept dropping and dropping since then. It's now at $34. Mispricing was very short-lived and any reasonable broker would not have liquidated the position.

So before you open an IB account or if you already have one, think twice. Realize that it's not a broker, it's an automated farm of servers trading against you!
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Sorry to know your loss. But this spike doesn't look like a price error? It lasted 1+ hour. Curious what happened exactly. This looks like the negative crude future back to March. Something must be wrong.
 
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