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My point is this was a take down. There were inconsistencies with FCM's, data, platforms and there was no level playing field. Interactve brokers went -110 million, nothing to see here?
Can you help answer these questions from other members on NexusFi?
Was it Saudi Arabia? Greta Thunberg? The Illuminati? We may never know. My money’s on it being gross incompetence, and IKBR really has no one to blame but themselves. Peterffy trying to shift blame to CME was pathetic. When your company lets someone buy >200,000 barrels of oil with a $77k account, you only really have yourselves to blame.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
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Posts: 5,049 since Dec 2013
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Wants somebody to blame!
Mine to. I don't think it was as nefarious as some suggest. I think things got out of control, people thought it can't get any worse than it already is, and then panicked when it did. Add in the algos and things ran further than anybody believed.
Clearly. You would think they have a team that does nothing other the liaise with the exchanges.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
Yes that's them. You can also sign up for all margin change announcements. Additionally you can also sign up for Global Command Center messages. GCC sent a message at 12:06 (Central) on Monday April 20th stating "May 2020 Energy Limits. The following May 2020 Energy Products (CLK0, HOK0, QHK0, QMK0, QUK0, RBK0, HCLK0, RTK0, WSK0, RLXK0, TCSK0, MPXK0, 23K0, CSXK0, 26K0) have no low limit and may trade negative." This is information I copied onto this very website 7 minutes later!
From CME Globex Command Center
The following May 2020 Energy products (CLK0, HOK0, QHK0, QMK0, QUK0, RBK0, HCLK0, RTK0, WSK0, RLXK0, TCSK0, MPXK0, 23K0, CSXK0, 26K0) have no low limit and may trade negative.
So we agree, the FCM's are accountable to some extent. I'm not looking to set blame on any one party, but rather get a better understanding of how the exchange, technology/data providers, FCM's and their customers all participated in the outcome. Interactive Brokers is not the only one impacted by this, other platform providers and FCM's have come out and stated that they were unable to handle negative pricing as well.
Trading: Primarily Energy but also a little Equities, Fixed Income, Metals and Crypto.
Frequency: Many times daily
Duration: Never
Posts: 5,049 since Dec 2013
Thanks Given: 4,388
Thanks Received: 10,207
Well they are accountable to themselves and their shareholders and they are accountable to the exchange in that they have a margin and credit obligation. But they only have an accountability to the customer in the sense that if they force all their customers to leave they will go out of business. Their legal obligations to the customer are probably very one sided and dictated by the law rather than what you (and I) would hope. Unfortunately most companies are like this not just FCMs
The chain is simple. The exchange modified some exchange rules. I don't "think" this effected data providers in anyway. The issue came with software vendors and ill prepared traders. I agree any software vendor that was unable to show or transact at negative prices should have liability. If I was a trader and I had, say $10k in my account, and my broker allowed a position to go $20k against me, and then liquidated me at the close, I would be very frustrated. I would expect the FCM to liquidate me immediately I was technically insolvent. But I probably have no legal grounds to sue them. This is why its so interesting that IB is currently in the spot light for this. IB are know for having extremely aggressive liquidation policies. This implies to me that not only was their software flawed in that it could not display or transact at negative prices FOR CUSTOMERS, but also their internal risk control software was also unable to liquidate positions at negative prices.
"If I was a trader and I had, say $10k in my account, and my broker allowed a position to go $20k against me, and then liquidated me at the close, I would be very frustrated. I would expect the FCM to liquidate me immediately I was technically insolvent. But I probably have no legal grounds to sue them"
Agree..
1. Traders need to be responsible for their trades. 70k account shouldn't be able to trade that many CL contracts during high volatility period.
2. Brokers/FCM/Exchange need to be fair to their clients. Traders should be liquidated immediately when they are technically insolvent (account balance reach zero)
Broker: Broker: Trade Future 4 Less. Data Feed/Order routing: CQG
Trading: DAX; ES; Bund Futures
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A person trading 212 futures contract on a 77.000 USD account deserve to end up loosing - Just one tick against him ment a loss of 2120 USD or 2,75 % in loss just in one tick - Not trading very hasard gambling
