Have you never seen the price of a company drop even though the company has great earnings and is solid? When a sector gets hammered even the strong are probably going to take a hit too. There are a lot of reasons why people might want to take their money out of IB stock even if that reason is only because they think that other people are going to do the same and they want to get out first. There are also plenty of people that don't know how IB is different from Bear Stearns and don't want to wait around while they look it up. If IB does spread its cash between multiple banks that's good news. It sounds like IB is handling their risk professionally (as you would expect).
You see, this is why we need very harsh and draconian penalties for any fraud on Wall St. Because the Refco guy was a thief, we now see fit to tar everyone with that same brush, creating the possibility of self fulfilling action. I think life in prison or possibly the death penalty would be a great start, and may actually benefit everyone (except the evil doer)
So if you see a stock falling by 30% you would say that fact in itself would have no informational value whatsoever ?
I would not draw any conclusion based on price action alone. I would consider the context of the price action too.
Neither am I, I'm just asking questions. I don't think the markt is just being silly. My guess is, those investors who were selling in those 30 minutes knew exactly what they were doing. I'd like to know why.
Damrak, IBKR is levered 4 to 1. What you are witnessing is what transpires when the "system" de-leverages. 4:1 is still far less than most Investment Banks. Shouldn't the real topic point toward SIPC? If one has confidence in SIPC's ability to pay off on a stress test of its members, then the point of safety is moot. I am personally indifferent about SIPC. Has anyone read the policy terms of the Lloyd's of London insurance regarding the first $500k($100kcash)? Is the LL policy a REINSURANCE of the first $500k or are accts under $500k S.O.L. if SIPC fails? Is SIPC's federal guarantee legislative if it runs illiquid, or implied like with Fannie and Freddie? Perhaps its time to review the Act which created it? The treasury could be busy printing a new reserve for the Fed's $700 billion iceberg, by the time SIPC comes knocking. my 2 pennies...
Since when did the "investors" selling on market open ever know what they were doing. Come on traders ...
Excellent point Kiwi, but it's been my experience that the stock price of a company doesn't drop like this for no reason. If it's not the "investors" who it's the market and the market always knows. A drop like this should not be ignored. It's typically a "hint" to the news that will come out in a few weeks, like C goes under and the majority of IB's capital is stored over at C so IB is now done as well. Don't ignore this!
MF Global dragged all the Exchanges and the Marketmakers down with them. http://online.wsj.com/article/SB120577468168542227.html?mod=wsjcrmain
isn't ibkr have that SIPC thing where it guarantees ur money protection also can anyone confirm rumors of ib denying withdrawls.