PUT options liquidated at worst possible prices

[stefan_777]

Quote from dagnyt:

In theory you have no appeal and must accept the damage.

In practice, speak with your broker about the indecency of selling a spread that was worth a fw dollars and being forced to pay a cash debit to close. They will tell you they use market orders to liquidate. tell them that's crap. You wont win, but speak nicely and you may get an adjustment.

If you went over your margin limit, that is not your broker's fault, but they an try to treat their customers as if they were human.

Ask what they plan to do to make it up to you.

Mark

As far as I can tell, he didn't even use margin since it was a debit put spread. They can't liquidate you unless you break the maintenance margin, which is the same as the initial margin for debit spreads(check IB's website). And the initial margin simply asks for the cash to pay the debit, that's it! Nothing more. IB's margin requirements for debit spreads specify nothing about the market price (let alone bid/ask) of the legs, only the price difference between the strikes.

What they did is a mistake and unfair, and of course he can and should fight this.

 

[Pinozi]

Quote from zdreg:

this thread is bordering on hysteria. neither 1or 2 is likely. one report of a possibly erroneous liquidation is not proof of systematic problems.if it was systematic there would have been dozens of report. if OP is a troll he will be outed quickly. nothing here is remotely damaging to IB's reputation.

the highest probability is that it was a random error which will be taken care of.

I hope you are right. Its one of the reasons I do like to keep a buffer on all trades so liquidation isn't a high probability

 

[DarthSidious]

Quote from Pinozi:Im going with one of two theories
1) OP is a troll
2) IB's risk and liquidation engine is seriously flawed

I mentioned earlier in the thread that the OP should PM def. I also sent PM to def because I have obviously been very disturbed about this. def PMed his reply back to me that he did not receive specific account details from the OP, and is unable to do anything himself unless he receives such detail. I wanted to thank def for his feedback and from this point onwards will go with the assumption that option 1 above is correct unless OP states otherwise. Till OP speaks up, I consider case closed.

 

[mskl]

I have not read this entire thread but I did see the executions that were posted and it tells me there was definitely something else going on in this account. Take note that IB liquidated the long SPY puts at 14:51 and then bought the short puts back at 14:54 and 14:59. That tells me that he must have something else in the account that was causing the issues - like being short some puts - the vol goes up - the spreads widen and boom - he is under margined. Then you get the liquidation of his long SPY puts to raise cash. The account is okay for a few moments and then you get some higher vols and worse spreads and the short puts are bought back.

It is quite possible that whatever he had in his account (short puts somewhere??) would have even been worse to buy back at the time and would have caused bigger losses and just maybe IB did this person a favor in the way they handled the liquidation.

Speculating on this is really fruitless - unless you know all the details of his other positions and the market on those positions at the time of liquidation...

 

[newguy05]

Quote from mskl:

I have not read this entire thread but I did see the executions that were posted and it tells me there was definitely something else going on in this account. Take note that IB liquidated the long SPY puts at 14:51 and then bought the short puts back at 14:54 and 14:59. That tells me that he must have something else in the account that was causing the issues - like being short some puts - the vol goes up - the spreads widen and boom - he is under margined. Then you get the liquidation of his long SPY puts to raise cash. The account is okay for a few moments and then you get some higher vols and worse spreads and the short puts are bought back.

It is quite possible that whatever he had in his account (short puts somewhere??) would have even been worse to buy back at the time and would have caused bigger losses and just maybe IB did this person a favor in the way they handled the liquidation.

Speculating on this is really fruitless - unless you know all the details of his other positions and the market on those positions at the time of liquidation...

liquidation engine does not open positions.....

 

[traderlux]

op has stated he only had 2 open spread positions, spy debit and uso debit, and cash. no margin involved.

in actuality 4 positions are open, 2 of which are short.

the auto-bot must have seen this as 4 positions, 2 short and fired-off on this condition. bad programming?

i will give the op the edge here at this time, as several others have claimed similar auto-bot situations.

this thread has brought to light many interesting aspects.

if op is honest, we need to hear from the broker, i dont feel this is a closed item yet. jmhdao

Quote from mskl:

I have not read this entire thread but I did see the executions that were posted and it tells me there was definitely something else going on in this account. Take note that IB liquidated the long SPY puts at 14:51 and then bought the short puts back at 14:54 and 14:59. That tells me that he must have something else in the account that was causing the issues - like being short some puts - the vol goes up - the spreads widen and boom - he is under margined. Then you get the liquidation of his long SPY puts to raise cash. The account is okay for a few moments and then you get some higher vols and worse spreads and the short puts are bought back.

It is quite possible that whatever he had in his account (short puts somewhere??) would have even been worse to buy back at the time and would have caused bigger losses and just maybe IB did this person a favor in the way they handled the liquidation.

Speculating on this is really fruitless - unless you know all the details of his other positions and the market on those positions at the time of liquidation...

 

[zdreg]

Quote from DarthSidious:

I mentioned earlier in the thread that the OP should PM def. I also sent PM to def because I have obviously been very disturbed about this. def PMed his reply back to me that he did not receive specific account details from the OP, and is unable to do anything himself unless he receives such detail. I wanted to thank def for his feedback and from this point onwards will go with the assumption that option 1 above is correct unless OP states otherwise. Till OP speaks up, I consider case closed.

I don't think that you should repeat anything received in a PM no matter how innocent u think it is.
you can assume anything u want but the OP doesn't have to explain himself to prove anything..
why don't you explain based upon the OP posts why u think he is a troll.
the fact that u are disturbed by 1 reported incident what does it say about you?
if the incident happened exactly as described by the OP IB as an honorable firm which it is will take care of it.

 

[DarthSidious]

Quote from zdreg:I don't think that you should repeat anything received in a PM no matter how innocent u think it is.
you can assume anything u want but the OP doesn't have to explain himself to prove anything..
why don't you explain based upon the OP posts why u think he is a troll.

The collective ET readership is getting their panties in a bunch over this, myself included (and for very good reason). But the OP has provided nothing beyond a screenshot of executions. Everything else is speculation. Despite repeated requests, no further proof have been forthcoming. def is an IB representative on ET - that is above any suspicion I think. If OP doesn't want to provide proof to us (which I don't see why - so many regularly post their blotters & execution on this site on a regular basis with account number removed), then he should provide proof to def to investigate further. At this time, we got nothing from OP, okay? nothing!. We need OP to speak up.

Yes, it is up to my judgment to repeat pertinent information from PM. I did not give any other information beyond that a) I PMed def, b) He PMed back to me saying he got nothing specific from OP. This is pertinent information for us to figure out what really is going on. And, yes, I consider case closed unless OP speaks up. We have speculated all we could. Need hard facts now, with proof

 

[zdreg]

the purpose of a PM is that the contents of the message is private. . it is presumptious on your part to assume that u have the right to post publicly anything at all that is in a PM.
the fact that "The collective ET readership is getting their panties in a bunch" over this one reported incident says alot about you. it says that u are easily frightened by one obscure incident and are very quick to go into a panic mode.

if there is such a thing as the "collective ET
readership" they are a herd. in life,the herd is mostly wrong in their outlook.

the OP is entitled to benefit of the doubt unless u can point to anything in his posts which are contrary to the truth.

 

[DarthSidious]

Quote from zdreg:the purpose of a PM is that the contents of the message is private

One man's opinion against another (for quoting pertinent portions). Let's agree to disagree, okay?

Quote from zdreg:the fact that you and others are getting in a bunch over one reported incident says alot about you. it says that u are easily frightened by one obscure incident and are very quick to go into a panic mode.

It should. To quote Donald Rumsfeld (no fan of him): There are known unknowns and then there are unknown unknowns. As a trader, I deal with known unknowns every day (is this trade going to be profitable or not?). It's the unknown unknowns (how good or bad IB's liquidation engine is) I am most frightened about, and will do my best to get to know more about them.