Citta, please contact me via email or private message. Indeed we should try getting together a group.It is possible to initiate an investigation at cftc.gov or nfa.futures.org. More case descriptions are needed to have a chance prove a scam scheme. At a first step we should build up a mailing list and then decide on how to continue.
Wrongful Liquidation Scam
- Thread starter pdcaz
- Start date
Man i feel you pain. I had a horrible experience with Interactive Brokers. I was trading an option strategy called a credit spread. If your familiar with these you know your maximum loss is limited to the distance between your strike prices and thats what you put down into margin. The margin stays fixed it doesnt fluctuate. So i had excess liquidity and a fixed margin and these idiots force liquidated a portion of my spreads costing me over $100k in losses via their auto liquidate algo. I didnt know what the hell was going on at the time i was being force liquidated and couldnt get a straight answer from them. They wouldnt turn off the algo and i was liquidated three days in a row. I opened an account with thinkorswim and transfered all my positions and cash over there as fast as i could before i was completely cleaned out.
Later i found my gross position value to excess liquidity exceeded their 50:1 threshold. How is that even relevant to a fixed loss trade? Where is this disclosed in my their margin agreement i signed? It's no where. I'm currently going through FINRA arbitration to try and recover my money. They hired a crafty lawyer who's arguing that IB can change their margin policy at any time to screw me over and that Finra reccomends brokers adopt stricter margin policies than the industry standard, so they use it as a way to rip off people under the guise they are protecting the firm from reckles traders. No ones capital was at risk but my own and i had the amount to cover the worst case scenario sitting in margin. I've never had such a problem like this in all my years of trading credit speads.
A buddy of mine who was going to open a hedge fund with IB to trade credit spreads the same way and would have gotten wiped too if i didnt warn him as they don't disclose this. When he brought up what happened to me they said they would review the accounts they are planning to force liquidate more carefully in the future and would not apply the algo to credit spreads. I saved the email this was in, it was from the same guy who was my representative at IB, John Seeberg.
If you have any advice for me in fighting these crooks please let me know, my hearing is in December.
Later i found my gross position value to excess liquidity exceeded their 50:1 threshold. How is that even relevant to a fixed loss trade? Where is this disclosed in my their margin agreement i signed? It's no where. I'm currently going through FINRA arbitration to try and recover my money. They hired a crafty lawyer who's arguing that IB can change their margin policy at any time to screw me over and that Finra reccomends brokers adopt stricter margin policies than the industry standard, so they use it as a way to rip off people under the guise they are protecting the firm from reckles traders. No ones capital was at risk but my own and i had the amount to cover the worst case scenario sitting in margin. I've never had such a problem like this in all my years of trading credit speads.
A buddy of mine who was going to open a hedge fund with IB to trade credit spreads the same way and would have gotten wiped too if i didnt warn him as they don't disclose this. When he brought up what happened to me they said they would review the accounts they are planning to force liquidate more carefully in the future and would not apply the algo to credit spreads. I saved the email this was in, it was from the same guy who was my representative at IB, John Seeberg.
If you have any advice for me in fighting these crooks please let me know, my hearing is in December.
It was certainly clumsy from Citta to set up the blog in french, but other complains over liquidation show up when one googles the issue.
Citta is french (or at least french speaking), in the thread below
he also explains his issues with IB.
http://www.pro-at.com/forums-bourse...STICE-CONTRE-INTERACTIVE-BROKERS-2-32604.html
I don't understand why anyone would want to use margin with a broker who would liquidate you on option spreads. Either get personalized care from a broker or go to one of the smaller firms that actually care for your business. They might have a few good customer service people but overall its trash, and I doubt they care how much you lose in an auto-liquidation process. Auto-liquidation is fine but at least have a person that knows how to trade to be able to override the process if it makes no sense. The fact is that IB's liquidation process is garbage, and people have complained about it for years. If you want to use IB, don't do options or use excessive margin.
I would also like to know more about this 50:1 rule as I do some pretty large spreads of all types.
Need to dig into some docs I guess. I don't see anything that specifically reads "excess liquidity", but I see "gross total position value" in the account window. That appears to be notional exposure, but I wonder what figure it's divided into to arrive at the ratio?
Is there any kind of warning before the auto liquidation kicks in under this scenario?
Need to dig into some docs I guess. I don't see anything that specifically reads "excess liquidity", but I see "gross total position value" in the account window. That appears to be notional exposure, but I wonder what figure it's divided into to arrive at the ratio?
Is there any kind of warning before the auto liquidation kicks in under this scenario?
wow
how come I never hear anything about this auto liquidation?
how come I never hear anything about this auto liquidation?
I think IB is the only one that does this. The other Brokerages do not to this. Probably why you don't hear about it much. A reason why I never opened an account with them. I don't want to add a unquantifiable and unpredictable risk when trading. That would make me too uncomfortable.