IB automatic liquidations :
I think it may be still worse than what you think
Presently I am in litigation with IB.
But it is a very difficult fight.
Look at the matter...
such events appears frequently in this order, within a few minutes:
1) the quote of an option line - or of several lines
(belonging to the portfolio) is - or are - no longer displayed
Reminder : as you know, IB computes every 3 minutes the values of the "Account window"
2) Among the values of the "Account window",
the "net liquidation value" drops sevelery (-36%, -47% within a few minutes)...
and during the same time, the values of the most sensitive options of the portfolio varies around 2%, and the underlying 0.2%:
in other terms, the moment is quiet, including for those options
on this underlying.
3) An injustifiable automatic liquidation is provoked.
I initiated a complaint first with IB, then with the Financial Ombudsman Service, but the Ombudsman does not like numbers and details, he just keep a general attitude alleging IB is so called "protected" by "customer agreement".
So my advice is that all IB's users should first pay attention of course, and then look for such events as
a sudden drop (within a few minutes) in "net liquidation value"
of one of the part of the account (securities or commodities);
and to this sudden drop may succeed...
# either a sudden rise and back to normal value
# or... an injustifiable automatic liquidation triggered by wrong evaluations by IB.
It is impossible to know exactly what is happening in IB's computers,
but all is working as if
as soon as the quote of an option or several options (of the portfolio) is not available,
then IB computes the values of "Account windows" without the lines of the portfolio that are not displayed (!),
what provokes a big error in net_liquidation_value,
because certain option(s) line(s) of the portfolio are merely not taken in account any longer.
This can lead to several kinds of consequences :
- abnormal but temporary ability to trade (when the net liquidation value is highly overestimated)
- impossibility to trade (when the net liquidation value is seriously underestimated)
- automatic liquidation (when the net liquidation value is highly underestimated)
To show evidence of this, I made screen copies.
But the Ombudsman did not even look at them.
His answer is just a vague, vague letter, without refering to any precise fact, and even refusing to examine precise facts.
My advice for IB's users is :
1) be very careful
2) look at abnormal changes of "net liquidation value"
3) try to find means to put abnormal functioning in light
by screen copies or any way you can imagine
4) let us stay in touch to see further developpments.
We should meet regularly in a special place about this topic.
A trial is expensive is UK
and I don't think there are class action like in USA.
But if we get many witnesses and many evidences of abnormal ruling of net liquidation value (and more generally "account window") by IB, we should be able to succeed.
What do you think about it ?
Post-scriptum
I was looking for a precision:
an IB account that enables to trade options and futures
is divided in two parts : "securities " and " commodities ".
T could get the meaning of the term from the doc on TWS (980pages).
I think "options on indice" belong to " commodities " at IB's.
But more generally, who can say, about an IB account
#which products are eligible at the "securities " part ?
#which products are eligible at the "commodities " part ?
Thanks in advance
