IB will take back improper liquidations. If a bad price or other transient gets through our filters, we will pay the bill. If there is a tick that is slightly off and that small difference results in a liquidation, then we don't. It is basically a "reasonableness" test. IB cannot be expected to realize that a 100 stock that prints at 99 is bad data. If it prints at 80, we should (and usually do) trap it.
The account window shows margin, both current and look-ahead. It also shows the GPV figures, day-trades, etc. It may not be the perfect information source but the information is displayed in a way that makes capital and risk mgmt quite straightforward. We have margin alerts on the queue as well as some other alert services but these won't prevent liquidation, just provide a 'louder' notice to the trader of information that is already displayed.
I am a high volume trader,approx 2million shares monthly,and i have used IB for the last 3 years after being with 4 other brokers over a 2 year period....IB are an exemplary company.(and rock bottom commisions to boot) I used to own a wholesale business and perhaps on 20 occasions recieved bad cheques,i dont think there was one time that the customer ever held there hands up and said "i did not have enough funds in my account",it was always the banks fault because "i was $20 short and they bounce a cheque for 2 grand". Options trader, take responsibility,you should have monitored your account more carefully,IB are brokers not a member of your family.
While initial liquidations may indeed increase the box value and trigger additional liquidations, liquidations would cause the gpv/netliq ration to drop below the 50:1 threshold well before the entire position is liquidated. It looks like the automatic liquidation program checks the gpv only once and, if the gpv is out of range, liquidates the entire position.
I don't understand why IB can't attempt at least one phone call. That doesn't seem like to much to ask before such drastic action. Does this happen so frequently that a phone call is too burdensome? Don (I still love IB) P.S. On a different, but possibly related issue: I don't recall IB posting an alert when they have system problems, just when anther entity has problems (CBOE, etc). Last week I had four conversations with IB reps (including a call back to me) when they finally said "the programmers already knew about the problem". It took a few hours to get resolved and yet no alert was ever posted. I am sure that posting an alert would stop a lot of unnecessary phone calls and free up people to call customers before auto liquidating their accounts.
Would it be possible to provide a ten minute warning before auto liquidation begins? I, for example, use some limit on open orders and I don't know before the open how many are going to get filled. As a result, I have to be extra conservative to avoid auto liquidation. If I knew I had ten minutes to comply, I would probably use market to limit orders to get into compliance immediately after the open and, perhaps, not take as big a hit as I would with IB using market orders to liquidate. I think a ten minute window might also mitigate some other problems associated with auto-liquidation.
================= Option Trader/partner ; Thanks for sharing that. IB had some helpful comments also. [Caption 2]That also confirmed again while the bank, i mean broker, doesn't want to hurt the client with liquidation, speed -regulations are important to them.Market order was mentioned by IB, & reason for it /not being as orderly as preferred. Hopefully your good experiences with them have/will far exceed this incident; persistence pays. ============================================= [Caption 5] Most all of my dealings with IB heve been fine; however do think they should back up thier '' recorded conversations'', by broker rep & SHOULD be able to be relied upon. Usually talk to 2 broker reps, think you said you did also. Since I am not a securities lawyer; so count on IB to explain if necessary their read on their rules. Hope this helps.
This thread makes me appreciate Ameritrade. They give me 4 business days to fix any margin call You can not compare IB with Ameritrade. I had an account with Ameritrade. I can talk hours why Ameritrade is one of the worst brokers for active traders. When they give someone 4 days to solve his margin problem, actually they let him bleed to death. Actually one of the things that I love about IB is their strict rule on liquidation. It has happened to me and it has saved my ass. Second Note to anyone who has an IB account: If you want to set one or two positions as liquidate first, set the others as liquidate last. That will be like to set the those as liquidate first. Third Note to Option Trader: Now that you told everything, please tell us what would happen to those postions if IB did not liquidate them. Would you lose more money by holding them? I guess so.