Does anyone have experience negotiating margin debt. On Monday I lost 175k due to massive margin call. This left me with 25k negative balance owed to my broker. If anyone has been thru this situation before advice would truly be appreciated. My acount was with interactive brokers. Thanks
try these guys if you got liquidated maybe they can review your situation to offer advice. http://www.prnewswire.com/news-rele...ted-by-interactive-brokers-llc-300133559.html
Have you noticed how low the market opened on monday ? with some ETFs apparently down over 50% until the bid/ask stabilized ? Anybody liquidated at that time would get butchered, which is apprently what happened.
My condolences. I've been on the wrong side of an IB liquidation before. It's always a risk you take that you might not realize you've signed up for - or how devastating it can be. If you can get a conversation going about it high enough and are not confrontational about it then maybe you can work something out. There are some good, reasonable people there. Else *maybe* try a lawyer. But it would be all about finding the right one and having him also be non confrontational.
I hear so many scary storys about them even liquidation positions that make no sense. Thats why I avoid them. I dont want some computer liquidation my account for no reason. I would never open an IB account.
I'm anxious to see how this plays out. I've been with IB for many years and I see both sides of this issue. They have to protect their own interests and the concept of auto liquidation seems like a solid one, but in practice there are horror stories. As the lawyers mentioned, I've had positions liquidated (during the 2008 crash) at prices that were very very far away from any kind of fair value. If the computer simply drops it out there as a market order, there may not be a bid/ask and the execution may be atrocious. Then the net liquidating takes a huge hit and the death spiral begins. I have a far more conservative structure in play these days, so I didn't have any issues in the past week, but like a lot of IB customers - I'm always nervous about it - especially in a fast market. There are times through the day where the net liquidating number can be far awry based on current market quotes - or lack thereof. If the computer "thinks" that you've suddenly dropped under margin requirements, then auto liquidation may begin immediately. I know in the old days you may get three days for a margin call. Depending on your positions and the way this market moves, in three days you may be in the hole a significant amount of $. For those of you that say you would never use IB, how does your broker handle margin calls in a fast market?
It is really very simple. Each Broker Dealer has in place their Written Supervisory Procedures (WSP) that has to be approved by their regulator. They layout in their WSP what procedures they have in place that responds to each of the regulators rules and regulations that apply to them. Most of these retail clearing brokers have automated many of these processes and placed them in their WSP. They have to follow those procedures.
The case below was Interactive Brokers. The fund recovered damages and fees. IB's claim for the debt was denied. http://www.slcg.com/pdf/sampleresults/Glen Lyon v Interactive Brokers Award.pdf "Case Summary The causes of action relate to Respondent's allegedly flawed, inefficient and fraudulent margin auto-liquidation system. . ."
Maybe save up and pay back the debt that you owe? Don't trade on margin so this doesn't happen again? Especially don't trade on margin when volatility is spiking?