why this order was rejected?

Discussion in 'Interactive Brokers' started by klattermusen, Feb 10, 2023.

  1. why this order was rejected? I thought you could just buy calls outright. Max loss was cost of your calls.

    It was a hail mary trade about 10 mins before close. Buying calls.
     
  2. mervyn

    mervyn


    your are buying 2500 call, x100, that is 250k shares.

    a man with a big wallet.
     
  3. destriero

    destriero

    No obligation to exercise. Stop helping.

    You have an option size limit of 5. You need to bypass it on the order ticket or go into settings.
     
  4. mervyn

    mervyn

    Go read their fine print.

    They won't let you buy an option right before close unless you have the buying power to exercise it. If it expires ITM (aka you hit the mega jackpot) it will be auto-exercised and they aren't willing to take that risk on your behalf because your account doesn't have money to buy the underlying shares (before the broker can find short put sellers).

    The mechanic of option excise is that you will have to buy the strike price (from different delivering parties) and sell at whatever price at close (different short put owners), not necessarily at the same time and same exchange.

    If you have the cash to excise it on a Friday, they will be scramble to match the trades (buy and sell) before Monday 10am.
     
    TheDawn and spy like this.
  5. destriero

    destriero


    Apologies, ofc you're correct.
     
    M.W. likes this.
  6. spy

    spy

    better off playing mega-millions imho
     
  7. mervyn

    mervyn

    Not worried. Learned from real large trades.
     
    destriero likes this.
  8. destriero

    destriero

    ofc, I got fixated on the order limit in settings. IB will never allow a 0DTE buy or short to be auto-assigned/exercised above your net liq.
     
    klattermusen likes this.
  9. hilmy83

    hilmy83

    you think lottery have better odds than these kinds of option plays?
     
    spy likes this.
  10. hilmy83

    hilmy83

    what's "right before close" mean? 10-15min? what's the min time needed before that option gets accepted?
     
    #10     Feb 10, 2023
    JonLivingston likes this.