Hmm. When I look at IV graph, it does show a jump from 70% to 358%.. Only in this month. I mean, whaaat?.. If this is possible, then I see how one can rig the whole thing.. .Just spike IV to 20.000%, close all clients positions due to margin call, then go back to IV = 50..%.. Is this for real...
Is it just the wide bid/ask spread? Just put in an out of market order on the other side that you know won't get filled but is much more reasonable than the current best and the naive IB algorithm will instantly see you as "profitable", it's probably just blindly looking at what your position would get if it dumped it with a market order.
I guess they will just state what I can see myself. IV increased from 50% to 370%. But how this is possible is still beyond me, specially when underlaying futures contect only went up a few %, no options transactions were done today in this options chain.. I mean if anything this is now the huge oportunity for you guys. If anyone can sell 20 put on CL for 5.000 USD as it is now prices, why not.. And hedge it with feb or apr options which trade for 2.000 USD on the same strike.. Beyond bizare.. I doubt anyone can make a trade at this price because I think this is some mispricing and since no trades were done today on this option chain they can price just anything they wish I guess.. But this then leads to hugee manipulations.. Like I said, someone then can just say IV is now two milliions, oh look no one has enough margin, liquidate all positions then lower IV back to 50... I mean who determines IV anyway? Is it not done automaticly by model? Or are market makers responsible for this?
Like I said, "The Algorithm" that run IB bases IV on the bid/ask spread if there are no trades, and sometimes even if there are trades. And yes, they autoliquidate all the time based on that, it's a "feature" that's unique to IB and one of the primary reasons why lots of us have left them for competent brokers with competent staff.
I think I am going to be the next one leaving IB.. I mean this is not the first time I almost had I heart attack. A few months back I woke up to an e-mail, your account is down 40.000$.. I had some short vol trades on, but nothing of that size or magnitude so I tought maybe I made a fat finger mistake and sold 1000 instead of 10 options or what.. I logged into IB with shaking hands to see what the fuck did I do this time, only to see my account in green.. Turns out I was not the only one because on that day a lot of customers got such emails, was a thread here on ET also on that day if I am not mistaken.. So I guess they try to take me to early grave or what.. Btw I tried to do what you said, put a closing order for my short puts at some low price and it still shows a biiig red minus in my account. A bit less than before, now only -11.000 USD but still. And I sold some locked winners (options) to free margin in case this goes down from -15k to -40k or something. Guess they wont cover this lost profits opportunity for me..