IB contingency planning

Discussion in 'Retail Brokers' started by ssrrkk, May 25, 2013.

  1. ssrrkk

    ssrrkk

    Is there some kind of facility at IB that will always guarantee closing out positions at the end of day? I am thinking about cases when my ATS malfunctions (e.g., network failure, power failure, crash, etc.) and I am left with open positions. My current thinking is that I must manually check, and if I am unable to get to my computer, I will have to call them up before market close and ask them to close my positions over the phone...
     
  2. ssrrkk

    ssrrkk

    And also would need to cancel all open orders as well if my code somehow stops...
     
  3. 1245

    1245

    No Broker Dealer will ever use the word "guarantee." They tend to offer "best efforts." You will always be at risk for system failures from both the broker's routing, exchange pipes, etc. Anything can fail along the way that will effect your plans.

    1245
     
  4. ssrrkk

    ssrrkk

    well doesn't a broker guarantee a fill if they receive a market order during regular trading hours? All I want is a market order at 3:55 PM eastern to close all open positions and a cancel all orders at that time as well... wondering if there is such a service. I am guessing not.

    my plan is to have my ATS send me an email each day at 3:50 PM after it cancels all orders and closes all open positions. If I don't get that email, it's time for me to call IB...
     
  5. It sounds like you have enough money on the line that this is a real concern to you. If that's true then your statement about being "unable to get to my computer" doesn't make sense. IB has a mobile TWS that runs on every smart phone platform. I'd use that as my backup broker access before trying anything more exotic.
     
  6. 1245

    1245

    No they don't. What if the lines to the exchanges go down from an "event," what would happen then? If you read the fine print before you down load any trading platform, they will never use the word guarantee. In fact, they will all claim they can't be held liable for system failures.

    1245
     
  7. That's not only this. What if I get hit by a bus? I would like some automatic facility to close all positions at market at the end of the day (or given date) even if I'm in coma in hospital.
     
  8. ssrrkk

    ssrrkk

    lol, the difference here is that during my paper trading tests over the last year, I have seen more than 5 disconnect events. there were also 2 power outages in my neighborhood over the year as well. so no, this is not about being paranoid. It's something that could prevent thousands of dollars of losses in a single day.
     
  9. ssrrkk

    ssrrkk

    I see what you are saying, but the network failure rate between the broker and the exchange is far far smaller than the failure rate of my network or power, may be by several orders of magnitude. So I am not too concerned with the broker failure rate (probably a once in 20 year concern). However my network / power failure rate is of real concern -- glitches happen several times a year.
     
  10. 1245

    1245

    From IB paperwork:

    27. LIMITATION OF LIABILITY AND LIQUIDATED DAMAGES PROVISION: CUSTOMER
    ACCEPTS THE IB SYSTEM "AS IS", AND WITHOUT WARRANTIES, EXPRESS OR IMPLIED,
    INCLUDING, BUT NOT LIMITED TO, THE IMPLIED WARRANTIES OF MERCHANTABILITY
    OR FITNESS FOR A PARTICULAR USE, PURPOSE OR APPLICATION; TIMELINESS;
    FREEDOM FROM INTERRUPTION; OR ANY IMPLIED WARRANTIES ARISING FROM TRADE
    USAGE, COURSE OF DEALING OR COURSE OF PERFORMANCE. UNDER NO
    CIRCUMSTANCES SHALL IB BE LIABLE FOR ANY PUNITIVE, INDIRECT, INCIDENTAL,
    SPECIAL OR CONSEQUENTIAL LOSS OR DAMAGES, INCLUDING LOSS OF BUSINESS,
    PROFITS OR GOODWILL. IB SHALL NOT BE LIABLE TO CUSTOMER BY REASON OF
    DELAYS OR INTERRUPTIONS OF SERVICE OR TRANSMISSIONS, OR FAILURES OF
    PERFORMANCE OF THE IB SYSTEM, REGARDLESS OF CAUSE, INCLUDING, BUT NOT
    LIMITED TO, THOSE CAUSED BY HARDWARE OR SOFTWARE MALFUNCTION;
    GOVERNMENTAL, EXCHANGE OR OTHER REGULATORY ACTION; ACTS OF GOD; WAR,
    TERRORISM, OR IB'S INTENTIONAL ACTS. CUSTOMER RECOGNIZES THAT THERE MAY BE
    DELAYS OR INTERRUPTIONS IN THE USE OF THE IB SYSTEM, INCLUDING, FOR
    EXAMPLE, THOSE CAUSED INTENTIONALLY BY IB FOR PURPOSES OF SERVICING THE IB
    SYSTEM. IN NO EVENT SHALL IB'S LIABILITY, REGARDLESS OF THE FORM OF ACTION
    AND DAMAGES SUFFERED BY CUSTOMER, EXCEED THE HIGHEST TOTAL MONTHLY
    COMMISSIONS PAID BY CUSTOMER TO IB OVER THE 6 MONTHS PRIOR TO ANY
    INCIDENT.
    www.interactivebrokers.com Page 8 / 10
    28. Customer Must Maintain Alternative Trading Arrangements: Computer-based systems
    such as those used by IB are inherently vulnerable to disruption, delay or failure. CUSTOMER
    MUST MAINTAIN ALTERNATIVE TRADING ARRANGEMENTS IN ADDITION TO
    CUSTOMER'S IB ACCOUNT FOR EXECUTION OF CUSTOMER'S ORDERS IN THE EVENT
    THAT THE IB SYSTEM IS UNAVAILABLE. By signing this Agreement, Customer
    represents that Customer maintains alternative trading arrangements.

    This is all very typical language from broker to broker. All I'm telling you is you're at your risk when you trade and they will not compensate you for system errors.

    1245
     
    #10     May 25, 2013