True, a some sort of hybrid system is probably the likely route. Rewriting is always painful because bugs cost money and they're always there. Order types are a minor issue for me, I probably only use about 4-5 different types and most IB specific things can easily be replaced. RH proved the concept, now everyone jumps into the same boat. Yet there's an ever increasing number of algo traders who don't care about pretty charts nor trading apps for phones but about APIs, connectivity and reliability. I'm not keen on the zero commission garbage at all because that means limited order types and bad fills. Lower commissions would be great but I'm not naive enough to believe in it -- brokers will still need to pay regulatory fees on every trade. That means they will get the funds for it through margin fees and order flow sales. You pay for trades in the end, just indirectly.
. Do you think they forgot the Swiss Franc debacle? https://www.google.com/amp/s/fortune.com/2015/01/16/swiss-franc-400-million-losses/amp/
Current CME initial is like $9,200 on GC. It is free money for IB at this point, because they know what the counterparty risk is. So they are jacking you and getting your cash for 1/2 their own risk when they margin-call the client with the weaker hand Risk-free zero $$$ for Petterfy.
His return is closing your GC position when it did not have to be closed, and him sucking the cash out of your trading account. Risk free $ zero.
I thought they sold Timber Hill. Their prop trading department that use to take the other side of those liquidations?
Apparently they did forget because they are still offering 33:1 on CHF. Meanwhile, I can only get 3.5:1 on AAPL (normally 6.666:1) . The average stock is currently around 2.33:1, barely better than what you get with reg T (2:1)
As long as they have proper margin call & auto liquidation in place, they shouldn't face such a situation. Yes, gaps are more prone & frequent these days and they have to protect themselves and their customers. But we also have to remember that there are circuit breakers, which means that even at times of panic, there will be pauses and windows open for auto-liquidation of positions. In these times, I agree with you, it's better to have higher margins (Reasonable) than to blow up.
It's understandable to have higher margins but they were hiked even before during no volatility. When we barely have 2 to 1 leverage in midcap equities with many at 1.5 to 1, that is beyond careful.