You never correctly diagnosed anything. You went on and on about naked puts in a cash account, and had to be told multiple times that you can't do american style spreads in a cash account. Then finally back to square one with suspecting he had other positions. We were doing that since the start of the thread, genius. There still isn't a clear explanation, the OP's story and IB's explanation don't go together completely yet. Atticus still has a point about the Canadian base currency not necessarily influencing the liquidation. From my perspective, it's still too opaque to place the blame.
Anyone who reads through this thread can see you were wrong from the very beginning, and I was right from the very beginning, especially about positions other than the puts triggering liquidation of the puts. Anyone who reads it all can see that you used extremely abusive, profane, and dishonest tactics throughout much of the thread, that your conduct was utterly shameful, and that you are lying about it now, because you would rather save face than apologize. I think anybody can see that you aren't even worth debating, so forgive me if I might choose to let some of your lies and abuse go unanswered.
Ok I haven't read all the new posts yet, but I will just say that liquidating the spread by legging out at the market (long leg first! and liquidating *below* minimum theoretical value) is still insane, even if the guy had -$1 million in his account due to market losses.
So IB liquidated an ETF with a S&P 500 correlation of like 0.99 at >10% below the equivalent S&P price. Good job! Sounds like a really efficient risk-reducing measure there, lol.
It's "full of innuendo" because of IB's silence - plenty of ppl asked for an IB post here and waited patiently. Thursday was NOT a black swan event. A black swan event is unpredictable, not something which you *know* will happen every so often. Market crashes happen frequently, every few years. We had 9/11, Jan 2001 (upward crash), Sep 2008 short-sale ban, Oct 1987, Oct 1989, numerous crashes in foreign markets etc. A 10% down move intraday is in no way whatsoever a black swan event. A 50% S&P crash would not be a black swan event. A true market black swan would be something like the S&P going from 1200 to 600 intraday, then going up to 5000, then to 77. Not a mere 10% mini-crash. Second, the main issue is what is IB's auto-liquidation policy. Even the most prudent IB margin-account customer can't manage their risk and avoid margin call risk without knowing how the algos work. Things like what is the minimum warning you get before auto-liq starts; can one prioritize which positions get liquidated first (not just either/or; but "this one first, this one second, this one third" etc); if there are clearly crazy quotes on the open, how long until IB starts auto-liq based on them; do limited risk options spreads get ignored for margin call reasons, or do they get liquidated too, if the latter, are they legged out with a 5 min delay between legs, and long leg going first? Etc etc. Reading through the suggestions about trying to estimate fair value, and not liquidating things that are clearly way above or below fair value, would also be a good idea. E.g. liquidating VTI down 25%+ while the ES is down 10% is clearly negligent.
What's ironic is that IB portrays itself as the "long fat tails" broker. They claim, and maybe even think, that their auto-liquidation is protecting them from fat tails. Whereas so far it looks like the auto-liq not only shorts fat tails, but actually helps to create them by crashing thin markets with insane market orders. And lo and behold, the day this insane risk-increasing policy is revealed as inadequate, what happens? They say it was a "black swan" day in the markets. Just like LTCM and every other moron who blew up in a humdrum market crash. LOL!
Many traders use IB because historically they have been the "paranoid"/long gamma broker that won't blow up because of a market crash. It has nothing to do with commissions, which I can get lower elsewhere on every single market I trade with IB. Obviously this thread and the events of last thursday call into question IB's risk management capabilities, in a serious way.
I do think you got fucked by IB, but seriously WHAT IS THE BIG DEAL of posting your EXACT positions + cash at the time of liquidation. 1) IB already knows who you are 2) Noone here knows who somedudetrader is 3) By blanking out your account # and post your exact position it will not risk your privacy but can clear all of this up instantly. It is frustrating going through dozen pages playing the guessing game when a single post from you will clear everything up, instead of 1 screenshot here 1 screenshot there all with partial info, just post exactly what you have in the account at the time of liquidation. What is the top secret fucking deal about posting your position and blanking out your account #, or just type them out.
Thanks for the explanation. 1. "Maintain substantial excess financial capacity." The problem is, everything that is not cash could conceivably be trading at 0.01 bid for a while intraday. Holding >100k cash exposes us to IB bankruptcy risk, and we end up like the Lehman hedge fund clients, years of litigation to get back 5 cents on the dollar etc. If we hold our assets in anything else, even t-bills, they could be trading at 0.01 in a market crash and then we are at the mercy of IB's auto-liquidation process. So, carrying excess financial capacity does not solve the risk problem. 2. It's not just flaws in the design. It's the lack of transparency. Customers need to know how the auto-liquidation works, otherwise they have no clue what their risk is. 3. There are some simple ways to see "crazy" quotes which could be almost fully automated. Even if it was just a case of a 10 minute extra delay, that would be a lot better. Ultimately, the main problem is that any auto-liquidation engine has the risk of liquidating off crazy quotes during a temporary market dislocation. Without human judgement, you risk auto-liquidating at these insane prices. At that point, either IB or the customer is at the mercy of exchange trade bust committees. Both IB and customer face much higher risk due to poor auto-liquidation. If the auto liquidation has poor design, it needs improving - nice to know you are working on it, but more transparency would be good. If auto liquidation is inherently dangerous, then it needs a manual component. If you don't have enough staff for that, hire more. If it goes against your business model, then your choice is to either change your business model or to risk losing customer business.