Logically, yes. In fact, zero risk doesn’t exist I think. If the client borrows money to short sell the underlying stock which is extremely lack of market liquidity and IB suddenly increases margin requirement, the client must be forced to liquidate his positions. And his large aggressive market orders may even worsen the market situation. When all positions are liquidated, his NLV can go negative. IB still needs to pay with IB money. I am just worried of this kind of probability. If the underlying is SPY or S&P500 option, this situation must not happen. But for GME, I am worrying.
I guess the Jay Gould syndicate part went over your head. This is stuff straight out of Fifty Years in Wall Street by Henry Clews. It is cut dry market manipulation by a syndicate. That is it. Anyone defending this is just nice for me to block because I don't care what you think about anything else.
They should go bankrupt..but they are the only game in town for what they offer. I used to like SinkorSwim until they were bought by Ameritrade.
IB Risk management: forgot to support negative oil price. To be honest, after negative oil price event, I realize IB risk management does not fulfil my expectation. but yes, I am still using IB because it is the only broker which offers advisor account and allows users to trade different markets.
That's like saying "China is a threat to my way of life but I have to trade with China". One day it will bite you in the ass.
Let's see what the weekend brings. The more I think about it, the more I get a sense that Robinhood could have been put into a questionable equity position at the Wednesday open due to the massive GME gap up and insufficient margin requirements on short GME calls leading to negative customer equity. Robinhood CEO was quoted everywhere as saying no liquidity issues but the more important question is if there is a solvency problem, which the capital raise and cross the street panic buy button removal suggest might have been the case. I gripe about IB from time to time but everyone should keep in mind that TP is good people. He tries to do the right thing and I can't say that about anyone else in the industry (Jack Bogle RIP). Love that TP tilts at windmills about selling order flow, prices margin fairly, took money out of his own pocket to cover losses to insider trading so IBKR IPO buyers were made whole, took the hit on negative oil prices when systems didn't manage risk properly, etc...
I don't trade through IB but I have respect for them and specifically their founder. He came to this country with nothing and has built a market leading firm. I was impressed with their integrity in making customers whole during the whole negative crude oil fiasco when they had their platform programmed incorrectly and did not relay accurate prices. IB made people whole for their error. Nobody likes changing the rules mid game but it's in the disclosure documents and is a part of life. Everyone likes seeing hedge funds lose to the retail "retards" but coordinating a social media attack and a run on known shorts is in my book the same as a shady broker pumping and dumping penny stocks. I'm curious as to the what rules and regulations all this brings coming forward. I work on a college campus and yesterday the talk of everyone in class was going long some bullshit crypto called dogie coin. They were all showing me their apps and letting me know I'm missing out on the next big thing. These kids all want to hop on the ride. At least they are talking about the markets. Bubbles burst. I have a whole basement full to tulip bulbs I'm trying to sell but the futures market for them seems to have lost its liquidity.