Notice of Possible Buy-Inþ- IB

Discussion in 'Retail Brokers' started by junkone, Jan 16, 2009.

  1. junkone

    junkone

    This is the second time that IB has forced me to close my short position. why do the even allow me to short it when they dont ahve the damn stock to lend. both the times, i had been in the money and had to close it up for no fault of mine.
    what are my options here.

    Based upon information available through 14:30 today, we remain unable to locate and borrow / re-borrow the shares necessary to meet delivery obligations on certain short stock positions in your account. As recent SEC regulations now strictly enforce delivery obligations, these short stock positions will be subject to forced buy-in by IB should our continued efforts to borrow or re-borrow the necessary shares today be unsuccessful.



    A list of stocks in your account UXXX147 that may be at risk to a forced buy-in, based on current settlement information is provided below. You may wish to consider repurchasing your position(s) in these stocks in order to control your portfolio/risk at any time prior to the end of the current regular trading session (16:00 EST). Transactions occurring after 16:00 cannot be considered against the delivery obligation.
     
  2. Go to Goldman/RediPlus
     
  3. I don't get it. How are they giving you till 4pm EST to close if trades after the close don't count?

    The last time I dealt with this, they made you cover before 2:45 pm, or risk a hard close out anytime after that .
     
  4. vikana

    vikana Moderator

    I've had that happen. IB needs to locate stock from their inventory, and if the locate closes the position, you may be forced to cover.

    IB is very aggressive about not allowing non-located shorting, probably due to all the new regulation this past fall.
     
  5. junkone

    junkone

    why do they allow opening of short if it is not there. just a waste of my time.
     
  6. vikana

    vikana Moderator

    I must be missing something, but here is how it works:

    You short ABC on Monday and IB locates the stock for you. The holder of ABC closes out the position on Tuesday. You get a notice to cover on Tuesday.

    How could IB know on Monday that the holder of ABC would sell on Tuesday?

    If IB does not have the inventory, you cannot hold the short. That's the law.
     
  7. Maybe it's time for a group refresh lesson on the mechanics of how shorting actually works.
     
  8. junkone

    junkone

    how about this. i queries QQQQ in IB
    http://www.interactivebrokers.com/e...cntry=usa&tag=United+States&ib_entity=llc&ln=
    it has a check availability link and it states
    Symbol: QQQQ
    Availability: >10'000'000
    Exchanges: ARCA, ATD, BATS, BEX, BTRADE, CBSX, CHX, CSFBALGO, CSFBCROSS, DARK1, DBALGO, DRCTEDGE, DRCTIOI, EDGEA, IDEAL, ISE, ISLAND, JEFFALGO, LAVA, NASDAQ, NASDAQQ, NITEECN, NSX, PHLX, TMBR, TRACKECN, MIBSX, IBSX

    finally i only had 50 shares of qqqq short. could they not find 50 qqqq shares among 10'000'000

    It turns out that i probably got suckered today.
     
  9. Not to confuse the issue, but I thought you had at least until the 3rd , clearing day to deal with it. You're saying they could come at you the next day. I think not. but maybe someone knows for sure.
     
  10. vikana

    vikana Moderator

    My personal experience is that IB runs all of this in real-time. The most notice I've had is to the close of the day i got the notice. But i have no way to tell if the inventory went away 2 days ago.

    I'm sure that you don't get to initiate the short if they cannot locate. That I experience almost daily.
     
    #10     Jan 18, 2009