Closing the barn door after $88 million has already bolted Lighting never strikes the same place twice. Next margin blowup will be in some other asset class. And will catch IB with its pants down again.
CME have told USO to get out of there 30% open interest position in June. That is why it is down 27% today. https://www.ft.com/content/a8a7dc16-1a9a-48f9-9bfa-89269f94218a
In my case: I received this notification by email on April 27th, with title "NRG Futures Close Out Policy".
Obvious weakness in IB's new policy. What if the shit hits the fan again earlier than 5 days before expiry.
Dude, you really think nobody out there knows how to price options using normal assumptions as opposed to log-normal?
Yeah you would think these big MMs like Optiver, Susquehanna, and Citadel would have their shit together and do the simple switch from lognormal to normal distrib underlying and start pricing these negative puts tighter. Still just a bunch of low-ball bids for the Jun20 neg strikes. Time to put some ridiculous offers to see if anyone bites.
Who knows if they are doing lognormal or normal distribution but thinking a market maker can or would want to change their code w/o little notice, ability to test or incentive isn't realistic.