You are right in a situation where you have a position that makes no sense. I.e., something that you do not normally trade. I've had this happen once before with IB and I did not close the position out. However, in this situation the original poster had a similar order in his basket order. The fact that the position mirrored his basket order is an indication that something might have gone terribly wrong with an earlier basket order. In which case exiting immediately makes sense to me. Maybe not to you. Another thing that is bothersome about this situation is that zzzap apparently had orders to close out the position but at lower prices. I.e., if the news came out and GBP tanked, zzzap apparently would have made money on the erroneous position. How do you explain that? Isn't that gaming the position? By the way, it looks like from IBj's log: that zzzap had about 23 minutes to contact IB about the position before the news came out. Did he make any attempt to contact IB about the position during this time? Again, I hope for zzzap's sake that he is made whole. It is an unfortunate situation.
I have sympathy mate, I can just imagine, looking at that position and thinking is it a ghost or real. If I close it am I really just opening a position. By the time I phone IB and confirm, will I be seeing huge losses. Seeing it from this perspective, IB owes you, your money back. At the end of the day we are on the bleeding edge of technology, we all know that. But, whats right is right. An order can't just appear, out of the ether and execute, 7 goddamn hours later with no warning!
thats true. why on earth didnt he use a market order,it was before the mother of all fomc meetings for god sakes
I thought about it. But please consider the following: - you haven't executed anything. Frankly how will you react when you see a position is suddenly open out of the blue? - What if the position you see is fake or ghost (perhaps some sneaky bugs)? If you close it immediately, you may actually fire up a new position. - A duplicated order can be stuck (invisible) and revived after 6-8(?) hours later. You can't assume a position can be stuck or fake either. As to whether the client realises the position or not, the answer is uncertain. Assuming all facts given by IBj is complete and accurate, I'm afraid there are some wrong assumptions regarding this issue. IBj assumed he recognized an unexpected position was opened since the client sent various orders via the TWS platform. However the presence of the client didn't mean he must recognise the position. Did the position really show up in TWS? It could be get stuck (invisible), similar to an order being stuck in the backend. For details see the second post on: http://www.elitetrader.com/vb/showthread.php?s=&threadid=108524
Well then why on earth was he bidding for covering?he lacked discipline to swallow a $10K loss, period
Yep! That is possible. A position pops up out of the blue. You didn't do anything. How come a position is up? Since the order can get stuck and revive after 6-8 hours, we can't assume the execution or the position will be displayed properly. Perhaps the position or the execution get stuck (invisible) so it takes more time for him to realise that position. I hope the OP will clarify it.
This is in zzzap's own words. He clearly states he was aware of the position. Now I can understand doing one of two things here: 1. You know the GBP position is erroneous so you don't touch it at all. You contact IB about the position ASAP. 2. You think that the GBP position is probably erroneous, but you do trade GBP and there is a news event coming up. To save yourself from catastrophe, you close the position immediately. Then you contact IB about the position ASAP. One thing you don't do is put limit orders to buy back the position so that if the news goes your way, you are out for a profit.
OK. Forget his case and discuss other situations. 1. You made sure every position is closed before you leave home happily. Later on You come back. Open TWS. What will you normally after you first open TWS? A) Have a cup of drink before preparing yourself in the exciting trading world B) Read charts instantly and try to spot for trading opportunities C) check everywhere to see if an unexpected position is fired up before you trade. 2. Trading after a while, you checked for those existing positions. You are amazed to find out an unexpected position showed up. You checked for the TWS main window but you couldn't see any executed order displayed. How come a position can be present out of the blue? What would you do? A) assuming this position must be real, you close it instantly. Better safe than sorry. B) Perhaps it is a display bug. Try to restart TWS. What about reinstallation? Sometimes the problem may be gone after reinstall. C) examine the problem yourself first. Close it if you are certain the position is real. D) phone the customer service to see what's wrong first. If they confirm the position is real, close that position instantly. 3. You submitted a market order. The order is submitted but suddenly disappeared. What would you do? A) It is cancelled apparently. I believe I have pressed the delete button. Nothing to worry about. Send another order. B) Send a counter order to close it instantly! No kidding! C) Check the TWS. If the execution window doesn't show anything, you will assume you are safe and ignore this problem D) Check everywhere in the TWS - account window, execution window, order - pending window, audit trail etc. If nothing indicates the order is submitted, you will assume you are safe. E) Besides (D), you phone the customer service to make very sure that disappearing order hasn't been executed. Ask them why it will occur. (CS is known to be slow, b expected some wait time and loss of trading opportunities) Easier said than done. It is easy to judge after hindsight. What if you are unsure what is going wrong at the moment? How would you react?
sprstpd, unfortunately your rules of trading are yours to follow. You cannot just say, in general, "you do" this "you don't do" this as OP does not have to follow sprstpd's (or my) unwritten after-the-fact rules of trading. OP clearly notified IB within the time guideline of a retail firm.
So if you have a position in your account that is erroneous and it is right before a news decision that would affect that position, trying to game the position for max profit is a good rule to follow? I'm sure this thread would *never* had been brought to light if zzzap's limit orders had been fillled on GBP for a profit.