PUT options liquidated at worst possible prices

I think what happened is inexcusable and they had no justification to liquidate, but all of you are missing the point.
Their autoliquidate function is not programmed to asses the trader's maximum risk, it is designed to assess <i>their</i> maximum risk.
Like any other shop, they only want to protect themselves and taking into account the portfolio margin is not their goal. They calculate their maximum risk if/when things go sideways. If one position looks out of whack to their algos, they will get rid of it. It is obviously a mistake in the programming, but they will find a way to justify it.
And for those who are suggesting arbitration, the NFA is more crooked then the FCMs. You literally have to catch a provider stealing before they will give you any relief. It is the same thing as the SEC. They are there for appearances sake and to protect the large firms, not the consumer.
 
Quote from stefan_777:

Here you go fuckhead, here's what the industry has to say.

Learn to write too. Looks like you took English class through an instant messager.

I'm sure I can dig out more definitions from financial dictionaries, but this only took a two second search. Try it sometime.
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okay, so you found some articles written by people as dumb as you and that proves what? nothing.

open an account with level 1 options (covered calls/puts) and try to write a "cash-secured naked put" and see if the broker lets you. they won't. they'll tell you having cash does not cover the put; you have to short the underlying to cover it, dipshit. after you try this and learn something new, tell those two authors to correct their definitions. now scram.
 
Quote from blackjack007:

okay, so you found some articles written by people as dumb as you and that proves what? nothing.

open an account with level 1 options (covered calls/puts) and try to write a "cash-secured naked put" and see if the broker lets you. they won't. they'll tell you having cash does not cover the put; you have to short the underlying to cover it, dipshit. after you try this and learn something new, tell those two authors to correct their definitions. now scram.
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Well go ahead and see if your the broker will let you, by the sound of it, a level 1 options is all you can get. You may have to go higher up to do a cash covered put, but really that's trivial. The top level options would always be for uncovered naked puts on margin, which alot of people don't have the account size to get.

They're not articles, look at the copyright, they're financial dictionaries you moron. They know alot more than you or me about this subject.
 
traderlux


Registered: Aug 2009
Posts: 149


05-09-10 04:39 PM

not sure what your dog in this is, but there is more than one incident brought up in this thread. are you only reading what you want to.

12+ hours later I am still waiting for you to post the incidents. the reason you don't post is because there is exactly one reported incident.

if you can't back up your statement don't post.
 
Quote from blackjack007:

okay, so you found some articles written by people as dumb as you and that proves what? nothing.

open an account with level 1 options (covered calls/puts) and try to write a "cash-secured naked put" and see if the broker lets you. they won't. they'll tell you having cash does not cover the put; you have to short the underlying to cover it, dipshit. after you try this and learn something new, tell those two authors to correct their definitions. now scram.
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Once again. This time from the Options Industry Council, found on the Options Clearing Corporation website. If you'd know anything, you'd consider them as one of the best sources.
http://www.optionseducation.org/resources/literature/files/understanding_equity_options.pdf

I. Covered Put Writing
A put writer is considered to be covered if he has a corresponding short stock position. For purposes of cash account transactions, a put writer is also considered to be covered if he deposits cash or cash equivalents equal to the exercise value of the option with his broker. A covered put writer’s profit potential is limited to the premium received plus the difference between the strike price of the put and the original share price of the short position. The potential loss on this position, however, is substantial if the price of the stock increases significantly above the original share price of the short position. In this case, the short stock will accrue losses while the offsetting profit on the put sale is limited to the premium received.
II. Uncovered Put Writing
A put writer is considered to be uncovered if he does not have a corresponding short stock position or has not deposited cash equal to the exercise value of the put. Like uncovered call writing, uncovered put writing has limited rewards (the premium received) and potentially substantial risk (if prices fall and you are assigned).
Naked writer: See Uncovered call writing and
Uncovered put writing.
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What's that? I hear mumbling.....how about this time, you call them and ask them to change their definition.

From this, a naked put means a short put not covered by short stock or a cash deposit. A covered or cash secured put means a short put covered by cash or short stock. Sorry, but a cash secured/covered put can not naked by definition. It's either a cash secured/covered put or a naked put, it can't be both.

You're wrong buddy.
 
i am not going to do your reading for you. read the thread, search the internet, go to the regulators. this aint worth dealing with for me, just tried to balance your hyperextended twist, i am through with it and you are on you know what so dont bother me.

if you cant do the background work, dont post.


Quote from zdreg:

traderlux


Registered: Aug 2009
Posts: 149


05-09-10 04:39 PM

not sure what your dog in this is, but there is more than one incident brought up in this thread. are you only reading what you want to.

12+ hours later I am still waiting for you to post the incidents. the reason you don't post is because there is exactly one reported incident.

if you can't back up your statement don't post.
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complete nonsense. you can't produce the examples. that is the bottom line. until you do i am going to remind this board what you are made of every 12 hours. fluff and lack of character.

I have no issue. it is you who is claiming that there are issues with auto liquidate but cannot produce more than one current example other than the OP from this thread.
 
Hi Guys,

My situation is quite similar to somedudetrader's case but my portfolio contains stocks as well as vertical call and put RUTs. On that day I was monitoring the market throughout the night and i couldn't believe my eyes as well. IB liquidated my entire stock portfolio (mostly ETFs like VTI, VWO, VGK..etc) as the RUT options prices went crazy..at one pt i was like -20k or -200k..haha... I would like to note that my whole portfolio up to the day b4 was ard 30k and i had about 11k worth of vertical PUTs sold.

Most of the RUT options are untouched except 2 Sold May 760 Call RUT which IB bought in for me at a silly price (ard $2.80), leaving my 770 CALL RUT untouched (now they r worth nothing probably..haha)

Another thing.. my ETFs are sold at fire sale prices as well..$46 for VTI ? now i had to buy back at $59. I raised a ticket to IB but they had not replied me yet after 4 days... To add salt to the injury, my account was marked as day pattern trader and the status was duly removed only just now after a complain.

Jus to share with u guys.. I am going to stop trading options with IB and transfer my funds to TOS. TOS held up good throughout the nite.
 
Quote from zdreg:the OP is entitled to benefit of the doubt unless u can point to anything in his posts which are contrary to the truth.
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Quote from zdreg:I have no issue. it is you who is claiming that there are issues with auto liquidate but cannot produce more than one current example other than the OP from this thread.
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not sure what zdreg now wants. He is arguing with everyone else that there is no other example of this happening except the OP's post, who has since disappeared. When I posted pretty much the same conclusion yesterday, that we have done all analysis that we could based on verbal & incomplete information, and can't do more till OP steps up to the plate and provides proof of liquidation notices, screenshot of full portfolio at the time of liquidation etc. we should just move on... well, guess what, zdreg was arguing with me.

Unfortunately, we have 2 trolls on this thread now. OP & zdreg. If you agree with him, you are screwed. If you don't, well... you are screwed.
 
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