It's less that and more of their underlying business model. Their model is to be lowest price. To get that you have to be lowest cost. To achieve that they hire a couple of smart people and have them build a software package that automates most of what humans do in other brokers. Then they hire a bunch of customer service staff at well below market rates, knowing that they'll get flunkies but not caring because they really don't have any responsibilities except to cut and paste stock answers. This works fine for 95% of situations, so if you're doing straight stock trades with them or anything that doesn't involve margin, and nothing ever goes wrong, then you're fine. So 95% of their customers are fine. The edge cases they just program to ensure that IB never incurs any risk, and as long as they don't incur risk they don't care if they're treated properly or not. I'm guessing they have a couple highly paid attorneys to deal with the fallout from that. It's not a moral judgement on them, their business model is simply set up the way it is. It enables them to offer low/no commission and low margin interest rates, and makes Peterffy a ton of money, so it's doing what it was intended to do I guess. It's just a singularly bad place to be if you're trading vertical spread, selling put options, or a half dozen other edge case situations where they're really bad and their model calls for them to not give a shit. If you're not in one of those cases, they're probably fine. If you are, it's a horrible place to be and almost any other broker is much better.
You could also use the scale trader to lower the prices every 2 seconds to save the hassle of doing it manually.
Sorry for resurrecting this thread, but I'm curious about the bolded part (which you mention a few times in this thread). This sequence is the reverse of what I have seen elsewhere. For example, in this post 312 says "The only use for this is if you have negative cash before selling the box." Similarly, in this Reddit thread, the poster repeatedly describes the use case of selling box spreads as "refinancing your margin debt." I'd really appreciate anybody clearing up my confusion here.
This is not the case for IBHK with their risk based margin. You can sell the box whenever you like for whatever purpose (including withdrawing) as long as margin requirement is met.
Excuse me for resurrecting this thread. It is important to set your box to be liquidated last in your setting in addition to setting up your account to be portfolio margin, (though this is not guaranteed by IB). There was a large swing glitch in the market that could cause one of the box' legs to be liquidated like what happened on Thursday May 6, 2010, https://www.foxnews.com/politics/obama-regulatory-authorities-investigating-wild-stock-market-swing someone's IB account was wrecked as his Debit Put spreads were liquidated perhaps due that particular market glitch. https://www.elitetrader.com/et/threads/put-options-liquidated-at-worst-possible-prices.198144/ To Sig, did it happen to you that your spreads were liquidated at IB because of an event like on May 6, 2010?
No, it was just that the spread went way OTM or ITM, I don't remember which, so the bid or ask on one side was really thin. As I'm sure you've seen, when this happens you get throwaway bids or asks that I assume are often left over GTC orders that no longer have any connection to reality that temporarily become the best bid/ask when the MMs go away or refresh their book. The Algorithm uses these as if they are the market, which would be fine except it ignores the fact that you have a vertical spread so your loss is limited to the spread. So The Algorithm will decide your 5 point SPX vertical spread is down 9 points and autoliquidate you, despite the fact that you could never, under any circumstance, lose more that 5 points on that cash settled European option spread. There's no no need for a volatile market to have this happen, it's actually somewhat routine. For a while I would put my own GTC orders in to ensure that never happened, but ended up moving to a professional broker that doesn't require me to play those silly games and provides real customer service.
Thanks for sharing your past experience. It is indeed quite dangerous to trade options with IBKR. An Algo is indeed just a computer program and it only executes according to the programmers view. There are some events that may have never been in the minds of the programmers when they create it. https://www.optionsbro.com/interactive-brokers-dangerous-options-futures-trading/
i hate schwab since it cheated on my corp bond trades. I never go back to a cheating broker. their free trades are not really free.
It turned out that particular trader had margin problem, such a long winding thread https://www.elitetrader.com/et/thre...dated-at-worst-possible-prices.198144/page-30