Interactive brokers liquidate with 1 Minute notice while wire is on the way.

Interactive brokers liquidate with 1 Minute notice while wire is on the way.

I was aware about the problem with auto liquidation with IB, by never dreamed its that bad.

I have an account worth about 100k and I usually have 20-30% margin cushion in my account. Today in the morning I got a massage from IB that my cushion is under 5%. I closed some position immediately to bring my account to 10% cushion. In addition I have done a wire of 25k “and notified IB that the wire will be coming”. On 10:38 AM I got a massage that my margin is deficient, I went to TWS right away and I was already auto liquidated on 10:39 AM (off course the worst time). I have not got any new notice that my account fell again under 5% which I think IB should have done, and I only got “1 minute” notice instead of the 10 minutes policy IB claims to have (see below). All of this while my wire was on the way (it arrived 15 minutes later.)

My loss $300 on this, But I think every IB costumer needs to ask themselves, If there is another flash crash or a crazy day, do you have any protection against IB auto liquidation?
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ids
Interactive Brokers
Registered: Aug 2004
Posts: 550
05-07-10 10:01 AM
We never auto-liquidate instantaneously. You always have 10 minutes to deal with a problem.

 

Any other IB costumers had an expiriance like that?

 

The auto-liquidation is one of the many policies I like at IB. This helps protect me and my account from my actions, protects my account from the lack of actions of other IB clients, and protects IB as a viable broker. I feel IB is by far the safest broker I use because of the way IB runs and manages their business. While you may feel IB's actions have cost you a little bit of money this time, it could have turned out differently and saved you a bunch.

 

well done IB, you're doing your job

 

You were over leveraged.

 

Catosa just feel safe with IB untill....the next flash crash & you get autoliquidated with 1 min notice. Again the point is on May 7 a day after the flash crash IB POSTED POBLICALLY HERE ON ET that they always give a 10 min window before liquidating so you can feel comfartble you would be able to close your positions in case of a flash crash but THATS NOT THE CASE. It seems you have zero protection if somthing crazy happens even if its only for a couple of minutes.

 

Agree on all points. That's why ive been an IB customer for 6 yrs.

 

yes, don't use too much leverage

 

Auto liquidate is very helpful tool for people who are not at their screens all the time with position on. Trading is war, don't blame your tools, blame your war game plan.

 

If you want leverage use futures.

FoN