IV is solved by price; hence "implied." They marked you to the 4.00 offer. That's why you don't short naked vol in commodity vol. "If there is no spread... there is no trade." "How can you sell the puts if you haven't bought the call!" Pink Floyd, "The Wall"
Poopy still has me on ignore for some reason, but I saw this and HAD to make an edit... "How can you sell the puts if you haven't bought the call!" Pink Floyd, Dark Side of the Moon. No, it's "How can you sell the puts if you haven't bought the call!" Pink Floyd, The Wall.
You have little recourse if they blowout a naked position. They are not obligated to use mid on the MTM calc. Yes, IB sucks balls.
So this is IB related at least partly.. MAybe time to change brokers Or my original plan to just leave options to you big guys and focus on trading with underlaying directionally.. Certainly less math involved
I didn't read the whole thread. If IBTWS blows you out on a risk-figure it will send the order at the market. So no, it doesn't have to fill at 12, but certainly can. I'll have to read your comments.
@PoopyDeek I have a feeling you stay away from energy related options right? Or did you take an oportunity on any of those huge IV spikes in recent weeks. In near term contracts I mean.
I have never been auto-liquidated by any broker other than IB. I was partially liquidated on a short box back in 2001 by IB. The fill was 0.80 cents off the value of the box and they eventually covered the loss on their erroneous liq, but apparently they haven't improved over the years. My point is that you don't have any recourse when the vol or price marks against you in a short single. I can think of a million reasons why someone would lift the offer on that put... to juice their marks, etc... short 20 put spreads, but don't short naked vol.