Same happened in March and the market was wrong. IB has the best risk management in the entire financial sector. That doesn't mean they can never go bust, but there are dozens of other firms I'd expect to blow up before them.
Part of the IBKR selling could be related to the short sale rule change. Market makers will no longer be exempt. This means liquidity in those options will dry up thus it will have a negative impact on volumes going forward.
I considered that. Actually, almost everything financial is moving up and down in lockstep, it tells you nothing about the company. It's all program selling, margin calls, short raids, options hedging, you name it.
Though there may be an increased demand for puts if no stock to short. Maybe less competitors and wider spreads.
Hard to tell what will happen - but if Market makers can't short then: what's offered the puts?? I think a good trade would be to buy some Conversions on hard to borrow names in Oct +. (short call/long put/long stock). I will do this at prices slightly above FV with the expectation that this will balloon once the rule is in place. Small risk.... I already did plenty yesterday.....