you think? when you open an account at ib there are all kinds warnings in the paperwork about how they are not liable for software glitches and market data problems. i wish him luck though. maybe they will take responsibility.
Same here. I wouldn't expect IB to change course and own up to a mistake. Write it down as a lesson learned or go to arb if there's enough coin involved.
Do you know where the clause is that says they can remove your limited-risk position because of their own error? I'd be interested to see it.
No - if OP is correct and IB fucked up, then they should recognize the error and refund him in full inc. commissions within a few days at most. If they don't, then their entire brokerage business is toast. What serious trader would use a broker that legs out of a debit spread for supposed margin reasons, and then tries to deny the error? Every single customer account that uses options is at risk for instant bankruptcy if this is what IB do. The question is whether OP is correct, or is a shill for a competing firm, or just mistaken about what caused the liquidation. I have to say, I don't see why IB would put in a margin call on a debit spread, it makes no sense. So I am a little sceptical about this until further proof arises.
You need to contact them NOW, don't delay. You were screwed. "Auto liquidation" *should* only be for naked positions if you cannot meet a margin call- you were hedged. I say this without knowing their "policys", however, WTF why would they liquidate a spread that is becoming profitable???
Here's what they did to me...They first sold my long 119 SPY puts at a really bad price. SPY was trading at around 110-111 at the time. Then they covered my short 114 SPY puts also at a really bad price too. maybe being cheated > $6 in 16 puts and 16 short puts isn't a lot for many of you, but that's well over 10k and it's a big deal for me. No replies from IB on the complaint I filed yet...
I'm surprised they burned you when you were hedged especially so fast... the trading at that time was crazy - I was long SPY calls and I threw up some low ball bids just to get my positions showing they had more then .15 cent value. I was using eOptions platform and had no problem getting my bids to show up immediately. I couldn't get fidelity.com to load.
Did you have a ratio spread on? If so, the wide markets and temporary downtick would have easily set off the stop losses on the short puts. Then the rally back would have set off your larger puts. IB probably uses market orders to liquidate so it is possible that everything was liquidated at once when the markets were super wide. If you had a ratio spread on, I doubt you will get any money back. Edit: Sorry, I just saw your picture. Yeah you got raped. I feel for you. You should track down as much information on these orders, as well as SPY market prices during the exact times that you were liquidated. Then take the trade to arbitration. Call the ISE and PSE where the trades were executed if you need to. Show the CS peop's at IB this thread, and the anger it is brewing. Do whatever you need to do. I have no idea what their rationale will be, but I would love to hear it.
IB is not wrong. You were short 114 and long 119 puts. In rational markets these cancel out. But what if an irrational market causes your short 114 to be worth much more then the 119 puts? Theoretically the difference is 5 SPY points. But practically, the risk is 119 SPY points. The reason is that a 114 put can be worth $100 when the 119 put is worth $1. Well you say thats impossible. Well if impossible if nobody is willing to sell the 114 put at less than $100, like yesterday.