Unethical Conduct by IB

[jimrockford]

Quote from fhl:

He simply said that he didn't remember, he didn't say that it was not red and he didn't respond accordingly/promptly. It is to early to tell if he screwed up.

Here is how I think he screwed up. First, he had a responsibility to make sure he was confirmed out immediately, on every single order cancellation request, but he didn't know how to do so (how to look for the red order status code). Second, from the time he issued the cancellation request, until almost 40 minutes later, he did nothing to alert IB to the problem, or to ask IB to determine whether or not his order had been executed and resulted in a position requiring further management on his part. He lost 43 pips because of his 40 minute delay. He delayed until he noticed that his new position had unexpectedly showed up on the TWS. He should have been all over this problem 40 minutes before that time, so that any loss would have been far smaller, and so that he would have been at least able to make a case that the inevitable small loss should be eaten by IB and/or by the counterparty.

I'm willing to consider placing some blame on IB for possibly bad documentation which might have led to this guy's uninformed use of TWS and his resulting mistake.

 

[jimrockford]

Quote from winter:

Don't bother, JR is the local IB apologist, they can do no wrong and every complaint about them is unfounded (or posted by a competitor posing a customer).

No, IB does do things wrong sometimes, and many complaints are well-founded complaints, and I myself have made some of them, sometimes privately, and sometimes in this public forum. But I make my criticisms in the spirit of constructive criticism, because I think overall, IB is imperfect but it is the best deal. I think that bad documentation is very severe and persistent problem at IB, and that it MAY have contributed to this situation.

 

[tomcole]

If it takes 37 minutes to report a fill and IB blames it on DB, I'd simply tell them you DK the trade, close your account and sue them for the money. Sounds like IB and DB should make it up to you.

Your lawyer will subpoena everyone's records for a deposition. Once IB and DB see you're serious, I would guess they settle quickly.

IMHO, at worst, its mutual error and you can split the amount, but you should never have to wait that long for a notification.

If all the players point at their docs and say, "Tough luck", tell them they know the risks of trading and a 38 minute delay appears to be negligent. See you in court.

Quote from TRADERguy:

This morning at 10:01, I put in a limit order to short the EUR/USD @ 1.2474 on IdealPro. Then I decided that was a bad idea and I canceled the order. Everything showed that the order was canceled successfully an I did not get filled. By everything, I mean the order on the main window showed that it was canceled and then it went away, Book Trader showed that I had no position, and the account window showed that I had no position. Then at 10:38 I saw my account drop in value suddenly, with no corresponding price movement against the trade I had on at the time.

I looked at my executions and it showed that I went short at 1.2474 at 10:38:23. The price during that minute was 1.2521 to 1.2525. I already had a short position on and didn't have any pending orders to add to it at 10:38:23. The second short position required too much margin, so IB closed it a minute later at 1.2517.

So I called IB and they said that the order from 10:01 had been filled and the reason that it didn't show up anywhere in TWS until 10:38 was that Duetcha Bank was having "booking issues." He said that I was stuck with the 43 pip loss and there was nothing IB could do about it.

WHAT ABSOLUTE B.S.!!! I will never trade on IdealPro again.

 

[Bitstream]

that's somewhat besides da point if da order don't show on da tws window'n'doesn't appear on da trail or on trades confirmation: it is possible to miss da change in colour if it happens fast, i don't know if he checked on 'trades' window but am not willin' to speculate until we know da whole story.

 

[jimrockford]

Quote from Htrader:

I don't have time to manually check if each one gets the red code, which disappears after a few seconds anyways. As long as the order is removed from the TWS screen and there is no fill, the trader should be able to assume that the order is cancelled.

Htrader,
let me first note that I have great respect for your postings and opinions and your presentation of facts, and I always look forward to reading a post with your name on it.

It is not true that cancelled orders always disappear from the TWS. This is a user-selectable option. I don't allow my cancelled orders to disappear automatically. I don't want a cancelled order to disappear until I see the red code confirming I am out. This is why I set my TWS to keep cancelled orders displayed until I first observe them and then hit a hotkey to clear them manually from the TWS.

I seem to recall reading, in IB documentation, that the disappearance of an order from the TWS does not imply that a cancellation request was successful, and that the customer is still responsible for making sure he receives a confirmed out on an order, even after it disappears from the TWS. If you have contrary information, that the customer may rely on the automatic disappearance of an order, from the TWS, as confirmation that a cancellation request was successful, then I would very much appreciate your educating me by providing me with a pointer to the source of your info, so that I can verify it. I would also then owe an apology to the originator of this thread.

 

[bitrend]

I agree that software release should be attached with good documentation. The point is what the good document can help if the person doesn't want to read it.

By the way, did it say canceled or canceling? I had a similar problem with TD the status was still canceling but after calling my broker he confirmed that the order got fully filled. You need a canceled status, not canceling status, to be sure the order has been officially canceled.

Quote from jimrockford:

I think that bad documentation is very severe and persistent problem at IB, and that it MAY have contributed to this situation.

 

[jimrockford]

Quote from fhl:

If he were using the system properly he "would have remembered"? What does memory have to do with using the system properly? Do you remember what you did on the system last month? If you don't, then by your own criteria, you too, do not use the system properly.

It is irresponsible to issue a request to cancel an order, and then to just forget about it, before receiving confirmation that the cancellation request was successful. It is irresponsible to trade without knowing how the trading platform would represent such a confirmation to the customer. I would also that IB's generally poor documentation is also an example of irresponsibility, and that it may have contributed to the customer's failure to catch it immediately, instead of 40 minutes later when the trade notification reached his TWS.

 

[jimrockford]

Quote from Htrader:

Do you even use TWS? Orders are only supposed to disappear if they are either filled or cancelled.

Orders that disappear and then later become filled are called ERRORS.

Please see my earlier post, Htrader. I would really appreciate it you can provide me with some info source to verify your interpretation of TWS behaviour.

 

[jimrockford]

Quote from Htrader:

I can't believe a non-user would continue to post inaccurate facts.

If cancellations are delayed due to market conditions, then the orders will turn "pink" and stay in TWS.

I seem to recall reading warnings that sometimes, failed cancellations do not turn pink and stay in TWS, so that the customer must ensure that he gets a confirmed out message (red-colored order status). I am eager to see any verification from IB you can provide on this question, as I previously posted.

 

[jimrockford]

Quote from tomcole:

If it takes 37 minutes to report a fill and IB blames it on DB, I'd simply tell them you DK the trade, close your account and sue them for the money. Sounds like IB and DB should make it up to you.

Your lawyer will subpoena everyone's records for a deposition. Once IB and DB see you're serious, I would guess they settle quickly.

IMHO, at worst, its mutual error and you can split the amount, but you should never have to wait that long for a notification.

If all the players point at their docs and say, "Tough luck", tell them they know the risks of trading and a 38 minute delay appears to be negligent. See you in court.

Maybe you are legally correct, tomcole, but certainly this is not the way things are presented in the customer agreement we signed with IB. Perhaps you are correct that the agreement doesn't really matter in this situation. I wonder.

I think IB should clarify how it does things, and how it believes its customers should do things, with respect to cancelling orders and then handling situations such as this one.