This somehow reminds me of the statements of the Iraqi Information Minister in 2003. http://www.welovetheiraqiinformationminister.com
Now where exactly, on their website, does IB post their rules and algorithms for deciding on when and how to liquidate a portion of one's portfolio? I have considered opening an account with IB, but first I would like to know exactly which kind of trades I should do with them. Apparently it is not the place to let your ITM options get assigned, with the thought of covering the next business day. I do this all the time because I often trade illiquid issues where I can't get good fills on closouts and rollovers on expiration Friday. But I guess it is a good place for delta neutral trading.
Not handling your question, but BTW, you had better be triply careful with using margin allowances with IB on illiquid options, as anything that would promote a liquidation would mean your stuff is dumped at market.
This shouldn't be a problem as long as you bring your account into compliance within the first 10 minutes of the trading day. If you're looking for a longer time period, you'll have to have the capital to cover the assignment.
Your message (page 26) was appreciated. What are potential examples of bad liquidations which IB takes responsibility for?
Mr. def, I don't understand the IB liquidation philosophy. My current brokerage, Ameritrade, allots you a certain amount of stock and option buying power. They will go to zero, and you can't make any new purchases, if you get a maintenance or Reg-T call. Then you are given up to several business days to liquidate positions and or add funds to satisfy the call. They reserve the right to forcibly liquidate, if "market conditions dictate", in the case of maintenance calls, but it has never happened to me. This seems to be a better way to keep customers happy and protect the brokerage, than starting liquidation, automatically, 10 minutes after the call is issued.
this pt. was covered a number of times in the32 pages in this thread . the best way to protect the brokerage and OTHER customers is to liquidate immediately. a $50,000 call can ballon into a $200000+ call( in a high leverage situation) in a very short period of time. the goal in these situations and especially in highly leverage situation where 50:1 leverage is being unwound is not to guess where the market goes or to assume the customer will come up with the funds.
zdreg, As a side note, see page 26, Optioncoach's comments; i.e. the 50:1 leverage in a box spread did not represent risk to IB. Anyway, we both know Rrisch isn't talking box spreads and 50:1.
Really, Mr. zreg? I haven't read back to page 1, but it seems to me that if you are correct, IB should be more profitable than the brokerages that give the customer a reasonable chance to do his or her's own liquidation. You have evidence for that?