If your broker has a liquidation policy of anytime a account goes negative based on bid/ask prices, then you are SOL. It doesnt matter the position you have on hedged or not, because at that moment in time the market value of you positions put you account negative. Be very wary of a broker who does this. Market goes wide you get cleaned out.
That's news to me, that a poistion can be liquidated even when there is no margin involved. So if you buy a stock with cash & you write a covered call and the options market goes crazy, and the ask on the call becomes more expensive for a few minutes would you get a margin call? That's not what I was told by my broker before. Just consider if we have a May 6th flash crash again, are we all in danger of liquidation?
Not that they're being implicated here but in defense of IB I've seen nothing but fair marks on hundreds of futures options, many of which routinely have no bid no offer. As most brokers do, they mark options using a theoretical model based on the underlying price. I believe the only case where bid/offer are of consequence is where an option is bid above or offered below your broker's theoretical value. OP is still being ambiguous about the details.
Since you are short, in theory you loss is unlimited. So some brokers consider shorts on margin and treat them as such. It really depends on your brokers liquidation policy. Some do it on mid points, some just give you a margin call that you have to meet, it all depends. In answer to your last question, yes its possible, but it depends on your broker.
It would be nice to know the stock, option expiry, number of contracts and how much the options were. From what I gather the underlining is at $28.00 and you bought a 65C / 75C debt spread. So I figure this must have been some high flying tech or bio stock that you expected to make a big move to $75.00 from $28.00. My guess is the options were priced around $0.05 - $0.10 and you bought/sold a lot of contracts, maybe as much as 100 contracts.
Guost this is what you wrote last year, did you changed your mind since..? Quote. There is no risk beyond the premium paid in a debit spread. Just like there is no risk beyond the price paid for a share. If someone sells MSFT for -$100 per share, should IB liquidate all MSFT longs?
Can't go into much details now. I will try to get some compensation from broker (atleast for the comissions)and will keep you guys updated.