Screwed by IB? "Tough luck dude"

I do not believe IB takes advantage of a customer's margin deficiencies as an opportunity to make money at the customer's expense. I believe IB simply liquidates positions as necessary, albeit sometimes imperfectly, in a legitimate effort to limit the risk to which the defaulting customer has exposed IB and its other customers.
 
Quote from Lobster:

I have had a few margin calls with IB, and yes, it usually works out so that you lose money, and if only you had been allowed to stay in the position, you would have been able to later get out at a lesser loss. That's what margin calls are all about. It's not IB's fault. On the contrary, I'm sure one of the reasons IB can offer low commissions is the efficiency with which they execute forced liquidations / manage their risks. In a way, they maximize their profit this way.

That said, whenever I had a forced liquidation in my IB account, IB did almost exactly the minimum amount necessary to satisfy their margin requirement while trying to keep my portfolio undisturbed, in other words, while their first priority is controlling their own risk by enforcing their margin requirements, a close second is to minimize impact on the client's account.

The latest example: MLK day: I bought 2 ES, and it ended up dropping to the point of a margin call. IB sold just 1 of my contracts (close to the bottom, of course), and I ended up pretty much breaking even on the entire trade when ES shot up that day or the next (I don't remember exactly, I was not actively trading over the holiday.)

If the market had moved farther down, IB would have liquidated my 2nd contract, and I would have lost more than if they had sold both right away. The way it played out, I came out ahead because of the way they handled it.

Either way, it seems obvious to me that IB did the right thing by me. It's not their job to speculate on my behalf. It is their job to let me carry out my own speculation within their risk parameters, and that's exactly what they have always done for me.
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Lobster:

Good post. I missed this the first time around, I was so busy reading TraderNik's posts! LOL.

You confirm exactly what I would have expected.

Thanks for injecting some facts.

OldTrader
 
Quote from OldTrader:

Lobster:

Good post. I missed this the first time around, I was so busy reading TraderNik's posts! LOL.

You confirm exactly what I would have expected.

Thanks for injecting some facts.

OldTrader
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Yeah Lobster, thanks for the confirm, you just pointed out to everyone through your own personal experience what I consider to be the basics.

As for my own experience with IB, I wouldn't know as I don't trade through them, but then again, I don't need to, to be able to comment on this case. Thinking about the OP's situtation that he got himself into just gave me the shivers when I was out doing some banking this morning.

Oh, I don't know, maybe he and tradernik thinks a brokerage should assume an unlimited amount of risk and manage the positions of all of their clients so that they always gain the maximum benifit from all of their trades (irregardless of the lack of knowledge, or just plain sheer stupidity and greed they showed when getting into the position), all for the nice tidy sum of $3+ per round turn, LOL. :D

... just re-read my post, LOL again. :p
 
Quote from MandelbrotSet:

Oh, I don't know, maybe he and tradernik thinks a brokerage should assume an unlimited amount of risk and manage the positions of all of their clients so that they always gain the maximum benifit from all of their trades (irregardless of the lack of knowledge, or just plain sheer stupidity and greed they showed when getting into the position), all for the nice tidy sum of $3+ per round turn, LOL. :D

... just re-read my post, LOL again. :p
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Seeing as I have repeatedly pointed out that I am fully in support of IB's risk management practices and that I'd rather they close out the positions of overleveraged pikers who are trying to hit grand slams instead of exposing my capital to risk, I'll give you the benefit of the doubt and assume that you either missed those posts or were perhaps too hung over to remember reading them.

The fact that you persist in attributing to me statements and sentiments which I have disavowed indicates an incipient trollishness which you would be well advised to stifle.

And by the way, the use of 'irregardless' represents a poor choice at best, and a problem in functional literacy at worst.

http://www.google.com/search?hl=en&rls=com.microsoft:en-us&q=dictionary+irregardless

I look forward to more of these stimulating exchanges :)
 
Quote from traderNik:

Seeing as I have repeatedly pointed out that I am fully in support of IB's risk management practices and that I'd rather they close out the positions of overleveraged pikers who are trying to hit grand slams instead of exposing my capital to risk, I'll give you the benefit of the doubt and assume that you either missed those posts or were perhaps too hung over to remember reading them.

The fact that you persist in attributing to me statements and sentiments which I have disavowed indicates an incipient trollishness which you would be well advised to stifle.

And by the way, the use of 'irregardless' represents a poor choice at best, and a problem in functional literacy at worst.

http://www.google.com/search?hl=en&rls=com.microsoft:en-us&q=dictionary+irregardless

I look forward to more of these stimulating exchanges :)
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Oh, it wasn't his noobish trading which prompted me to include your name in the above statement, but rather this one:
Quote from traderNik:

IB is in the business of making money and they will do it any way that is legal. There's a difference between legal and ethical. Business is based upon the distinction and that's why lawyers make so much money. Do I really need to lecture you, of all people, on this?
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... you show me what business isn't?

Big Tobacco maybe, LOL. :D

No? OK, how about trading vendors like Puretick? :)

Still trying to come up with a list?
***
... and thanks for the english lesson, but you're wrong on that one too:

"Irregardless seems to be moving slowly in the direction of standardization.[citation needed] It has gone from nonexistence in the 1910 publication of Etymological Dictionary of the English Language,[7] to being a normality in modern dictionary publications, and it frequently occurs in edited professional prose. "

LOL, ET is just full of geniuses, Ph.D's and millionaires. :p
 
Quote from MandelbrotSet:
... you show me what business isn't?
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Wow, you seem to be having a tough time parsing meaning from written english. What gave you the impression that I was saying there's a big business that doesn't engage in unethical behaviour if they can legally get away with it?

Try re-reading every post twice, maybe that will help you.
Quote from MandelbrotSet:
... and thanks for the english lesson, but you're wrong on that one too
"Irregardless seems to be moving slowly in the direction of standardization.[citation needed] It has gone from nonexistence in the 1910 publication of Etymological Dictionary of the English Language,[7] to being a normality in modern dictionary publications, and it frequently occurs in edited professional prose. "
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Hmmm... quoting an internet source without providing a link? That's a bit strange, isn't it?

Here are a few quotes, with citations

Used by people who ignorantly mean to say regardless. According to webster, it is a word, but since the prefix "ir" and the suffix "less" both mean "not or with" they cancel each other out, so what you end up with is regard. When you use this to try to say you don't care about something, you end up saying that you do. Of course everyone knows what you mean to say and only a pompous,rude asshole will correct you.

http://www.urbandictionary.com/define.php?term=irregardless

I admit that I am a pompous rude asshole, but that doesn't change the fact that I'm right and you're semi-literate. : )

Irregardless is considered nonstandard because of the two negative elements ir- and -less.

http://dictionary.reference.com/browse/irregardless

The origin of irregardless is not known for certain, but the consensus among references is that it is a blend of irrespective and regardless, both of which are commonly accepted standard English words. By blending these words, an illogical word is created. "Since the prefix ir- means 'not' (as it does with irrespective), and the suffix -less means 'without,' irregardless is a double negative."[1]

http://en.wikipedia.org/wiki/Irregardless

and finally,

From Randall E Larson in Tucson: “I have more than once seen the corruption irregardless used in some standard writings and with a straight face. Has it become acceptable?”

Answer: The word is thoroughly and consistently condemned in all American references I can find. But it’s also surprisingly common. It’s formed from regardless by adding the negative prefix ir-; as regardless is already negative, the word is considered a logical absurdity.

http://www.worldwidewords.org/qa/qa-irr1.htm

It's pretty interesting that you can't actually figure out, on your own, that 'regardless' means 'without regard' and that the addition of the 'ir' creates a double negative which means, if anything, 'with regard'. 'Irreconcilable' means not reconcilable. Do you go around saying 'ir-irreconcilable'? You don't? Then why say 'regardless-less' when you mean regardless?

I know these concepts are tough to follow.

Shall I go on?
 
Quote from MandelbrotSet:

Just a little manic aren't we? :p

Yes, please continue, LOL. :D
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lol... I guess that translates to 'Ok, ok, I'm wrong and you're right'.

No problem, it takes a lot to stand up and admit you're wrong.

Maybe a little more than you've got?
 
Quote from traderNik:

One thing you can be sure of is this. If you screw up your positions and leave yourself open to the possibility that IB can legally take over your accounts and execute trades in them, <font size="4">they will do whatever they can to make money off your mistakes. ...
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Your problem began here.
 
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