if you do an internet search you will find complaints about the ib auto-bot going back at least 3 years.
there have issues raised in past years with the auto liquidation. but that is not the point,. the point is that there has been exactly one complaint about liquidation resulting from vertical option spreads. this thread is now 160 posts + resulting from hysteria among a small minority of posters drawing conclusions from one example. where are the other people who had their option positions liquidated? why are they all silent? any conclusion u draw from this one particular case cannot hold water. nothing is 100% foolproof. you accept it as a rare event and move on unless u have unlimited resources to deal with negative events. you fly. you accept the possibility of a plane crash even though if more money is dedicated to plane safety the risk might be slightly reduced but not eliminated. at least in this case unlike a plane crash the trader can be compensated.
not sure what your dog in this is, but there is more than one incident brought up in this thread. are you only reading what you want to.
there was one more incident mentioned on this thread with regard to a moc order. this order has nothing to do with events of last week. "not sure what your dog in this is, but there is more than one incident brought up in this thread. are you only reading what you want to. " instead of saying they exist why don't you post them?
there is one example from the OP. show it from this thread where others have suffered from auto liquidation as a result of events of last week. I previously mentioned the moc incident which has nothing to do with last week.
I believe your assertion is not correct. If held in a cash account at IB, an American-style expiration or physically settled put spread has the same margin requirement as a naked put, under IB's margin rules. The short put generates the spread's margin requirement in a cash account, while the long put is ignored. The OP was trading SPY option spreads, which do have American style expiration, so IB rules would margin them as naked puts if held in an IB cash account. They also settle physically in securities, instead of cash, yet another reason why IB rules would margin them as naked puts, if held in a cash account. So I repeat my question: was the OP trading in a cash account?
That only applies to assignments. Obviously he has a margin account, or else he couldn't open the position because it's built into the initial requirement. But the short option is not naked, if it was assigned before expiration, it would be legally covered by the exercise of the long put. By definition, calling it naked would be dead wrong. Go to the website and read the margin requirements. The only difference is that american style options need to be in a margin account just incase they're exercised prematurely. This is definitely not the reason why he was liquidated, because exercise notice comes after trading is over for the day. This happened in the middle of the day. Read the requirements, it says nothing about maintaining a certain market price for the legs. The only initial requirement is to hold the debit in cash, whether margin account or not. So he didn't violate margin requirements, unless there is some arcane clause somewhere in their account literature, but I doubt it.
His shorts puts were definitely not naked. However, IB dumb bots treated them as if they were naked and ignored his long puts. It seems IB is silent in this. When is IB going to fix its bots?