WTF? Down 15k on huge option mispricing. Can someone check please

[PoopyDeek]

@PoopyDeek I have a feeling you stay away from energy related options right? Or did you take an oportunity on any of those huge IV spikes in recent weeks. In near term contracts I mean.

Yeah, I haven't traded CL in any size since 2005. Our CL options broker was filling a 400 lot fly in CL that was like 40x80 indicated. He was known by me and working it on a not held basis. Something went wrong, guy left the pit and someone lifted the 0.80 offer on 400. I had no leg to stand on but the clearer adjusted it to 0.60.

Not a big deal, but this stuff can be deleterious to your account. All screen-traded now. So spread and always use limit orders.

 

[Tomaz26]

I have never been auto-liquidated by any broker other than IB. I was partially liquidated on a short box back in 2001 by IB. The fill was 0.80 cents off the value of the box and they eventually covered the loss on their erroneous liq, but apparently they haven't improved over the years.

My point is that you don't have any recourse when the vol or price marks against you in a short single. I can think of a million reasons why someone would lift the offer on that put... to juice their marks, etc... short 20 put spreads, but don't short naked vol.

Yep, I am certainly staying away from any nakes from now on.. Too much problems down the way. And as you said going with spreads skew works for me too.. Like I said this time it turned out ok with a profit, but I still sit at a nice loss from direct CL trade (from Saudi / Russia shit and then Covid lockdown on top..) and I guess now I am trying to revenge trade crude to get that money back I had soooo many options to close the directional trade for break even or even small gain when I had 3 cl longs and rode them up from 22 to 28, only to being greedy and watch them go back to 20... Lost 20k of unrealized profits in few days.. Grrrr.. But when I saw what happenes with negative pricing I figured that also could have been me so at least I am still here fighting

 

[zdreg]

It is time for you to be brutally honest with yourself. In the US it is National Honesty Day. Even though you are in Europe make it your day also. You were a light weight fighting in the heavy weight division. Consider yourself lucky. Reassess how you trade. Lots of luck.

 

[donnap]

....this stuff can be deleterious to your account. All screen-traded now. So spread and always use limit orders.

So true.

I was successful selling high IV with the May contract.

Not so in June. Sold some puts (1x2 ratio write) for what IB said was around 190IV.

IV went to 300+ pronto.

Despite getting direction right, the trade has mostly been at a loss.

 

[Sig]

The ultimate goal is to ensure that your position is valued at the most realistic price possible.

I don't believe there's any evidence that this is IBs goal in any way, shape, or form. Their goal is to ensure your account never goes negative so they don't ever lose a precious dollar, and that is all. They couldn't care less if their method incorrectly determines a price in a way that screws the customer, just so long as they're never impacted. I've had them close out cash settled SPX vertical spreads because "The Algorithm" incorrectly decided it could lose more than the max amount a spread could lose and they basically told me to fuck off when I asked why.

The real irony is that they just lost $80M precisely because they don't have a customer feedback loop and depend on "The Algorithm" as if it is a deity that can do no wrong. Serves 'em right!

 

[PoopyDeek]

I don't believe there's any evidence that this is IBs goal in any way, shape, or form. Their goal is to ensure your account never goes negative so they don't ever lose a precious dollar, and that is all. They couldn't care less if their method incorrectly determines a price in a way that screws the customer, just so long as they're never impacted. I've had them close out cash settled SPX vertical spreads because "The Algorithm" incorrectly decided it could lose more than the max amount a spread could lose and they basically told me to fuck off when I asked why.

The real irony is that they just lost $80M precisely because they don't have a customer feedback loop and depend on "The Algorithm" as if it is a deity that can do no wrong. Serves 'em right!

They're not stupid. They're asking for more than the debit req to reduce individual account leverage across the board.

 

[taowave]

Hey Poop,is your "don't short naked vol" specific to CL,or is that a policy of yours..Pretty sure I have read posts where you were short synthetic straddles in TSLA..Just curious

My point is that you don't have any recourse when the vol or price marks against you in a short single. I can think of a million reasons why someone would lift the offer on that put... to juice their marks, etc... short 20 put spreads, but don't short naked vol.

 

[PoopyDeek]

Hey Poop,is your "don't short naked vol" specific to CL,or is that a policy of yours..Pretty sure I have read posts where you were short synthetic straddles in TSLA..Just curious

I do it in eq-vol all the time on long term holds.

 

[PoopyDeek]

IV is solved by price; hence "implied."

They marked you to the 4.00 offer. That's why you don't short naked vol in commodity vol. "If there is no spread... there is no trade."

"How can you sell the puts if you haven't bought the call!" Pink Floyd, "The Wall"

 

[OptionsOptionsOptions]

@PoopyDeek could you take me off block/ignore?

Thanks