PUT options liquidated at worst possible prices

[blackjack007]

Quote from Options12:

Was this account at IB?

I have read conflicting comments on whether Portfolio Margin accounts are auto liquidated or given more time by IB. Can anyone shed more light on this topic?

IB PM accounts can be autoliquidated after a 10 minute warning just like reg-t accounts. he's talking about the margin recalculation that happens overnight with PM accounts. but your net liq can still fall intraday if the market moves against you or if there's a bogus last

 

[jayre]

Quote from blackjack007:

IB PM accounts can be autoliquidated after a 10 minute warning just like reg-t accounts.

10 minute warning? Where did you got this info from? based on my info. its 60 seconds or less.

 

[Options12]

Quote from blackjack007:

IB PM accounts can be autoliquidated after a 10 minute warning just like reg-t accounts. he's talking about the margin recalculation that happens overnight with PM accounts. but your net liq can still fall intraday if the market moves against you or if there's a bogus last

Yet in the case of a bogus quote or market move causing a drop in the net liq, a liquidation in a PM account will not "automatically" result in a reduction in margin requirement as it would in Reg T since the PM margin requirement is calculated overnight and remains static through the day. (http://www.interactivebrokers.com/en/p.php?f=margin&p=pmar-default)

This may be why regulators frown on liquidations by customers as a means of meeting PM margin deficiencies.

I doubt the framers of the portfolio margin concept ever contemplated a 1-minute-notice-auto-liquidation due to sudden, brief market moves or bogus quotes that bring your trade's marked value below, however briefly, a margin requirement calculated on last night's TIMS report.

Look at:

http://www.finra.org/Industry/Regulation/Guidance/p038849