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Oil price negative?


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Oil price negative?

  #81 (permalink)
 
Alaskajeff's Avatar
 Alaskajeff 
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I received this email notification from Amp today:

Posted by AMP Futures on Apr 21, 2020
updated 1pm - April, 21, 2020

Due to certain anomalies affecting Crude Oil, Futures have been set to Liquidating Trades Only. Any positions in CLM20 and QMM20, both long and short, are subject to liquidation..

This is an unprecedented times....YOU must trade responsible.

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  #82 (permalink)
 kevinkdog   is a Vendor
 
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SMCJB View Post
So @kevinkdog is Tradestation doing a good job of being proactive or does this make them look bad?

My vote is bad. If your concerned about the risk raise margins. Say effective tonight you are going to charge 150% of exchange margins on CLM0 and QMM0 positions.

Now it is is looking like Tradestation was first with this, and doesn't look bad at all.

Like you, I though it a bit severe at first, but I guess not!

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  #83 (permalink)
 
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 SMCJB 
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kevinkdog View Post
Now it is is looking like Tradestation was first with this, and doesn't look bad at all.

Like you, I though it a bit severe at first, but I guess not!

When you backetest a system on Tradestation does it break out the trades you couldn't take because they wouldn't let you or does it imply that you could take them?

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  #84 (permalink)
 
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I know AMP and Tradestation are trying to the CME's margin department job for them but don't worry CME is on the ball.

From the Crude Analysis Thread...


SMCJB View Post
JUN20 CRUDE OIL MARGINS UP 33% EFFECTIVE WEDNESDAY 22ND APRIL

Maintenance margin as follows (Initial Margins, ie non-member rates will be 110% of these)
Tier 1 increasing from 7500 to 8500, +1000 or 13.3%
Tier 2 increasing from 6400 to 7200, +800 or 12.5%
Tier 3 increasing from 5950 to 6700, +750 or 12.6%
Tier 4 increasing from 5500 to 6200, +700 or 12.7%
Tiers 5-9 also increase.

*NOTE*
On Tue 21st Jun20 was Tier 2 and on Wed 23rd willbe Tier 1 so actual increase is 6400 to 8500 +2100 or +32.8%
Similarly Jul20 was Tier 3 now Tier 2 so actual increase is 5950 to 7200 +1250 or +21%
Remember non-member rates will be 110% of these

https://www.cmegroup.com/notices/clearing/2020/04/Chadv20-170.html#pageNumber=1


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  #85 (permalink)
maksend
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Big Mike View Post
So your true PnL is closer to a $50k loss?

Please do keep us posted on what IB has to say about their system supporting negative prices. Especially given you are showing the data feed was inactive/blind once it hit zero. I would say you likely have a case just based on this preliminary info. I would imagine there will be a class action if what you experienced is true, a lot of others will say the same. If that ends up happening, you should consider joining the class action.

That god it was QM and not CL.

Mike

I Lost 450k in same liquidations through IB. Looking for the same victims for class action

1. On interactive brokers website were no warnings that the price of an asset could be negative
2. During the trading session, I tried to close this position with a negative limit price(-0.01 us dollar), but technically platform does not allow this. I recorded video from a PC, as well as from a mobile terminal.
3. Within a short time IB closed trading under this contract and I did not have a chance to carry out any operations

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  #86 (permalink)
 jokertrader 
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So the 88 million dollar loss IB is gonna take should cover your loss right? I.e IB should cover your loss from below 0 right?

https://www.businesswire.com/news/home/20200421005853/en/Interactive-Brokers-Issues-Statement-Crude-Oil-Contracts


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  #87 (permalink)
 
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 Big Mike 
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jokertrader View Post
So the 88 million dollar loss IB is gonna take should cover your loss right? I.e IB should cover your loss from below 0 right?

https://www.businesswire.com/news/home/20200421005853/en/Interactive-Brokers-Issues-Statement-Crude-Oil-Contracts


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That was my understanding as well, although I was really surprised it was that low of a number.

IB should be reaching out to those affected and explaining. This has a way of causing a ripple effect as well on their accounts, margin calls on other products, etc. The liability is even more than just covering the loss below zero.

Mike

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  #88 (permalink)
 
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 Big Mike 
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@maksend, you need to list a valid physical location in your profile. "Planet Earth" is a violation of our very clear rules about this, please take it seriously.

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  #89 (permalink)
 addchild 
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jokertrader View Post
So the 88 million dollar loss IB is gonna take should cover your loss right? I.e IB should cover your loss from below 0 right?

https://www.businesswire.com/news/home/20200421005853/en/Interactive-Brokers-Issues-Statement-Crude-Oil-Contracts


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My understanding is that the 88M is just the shortfall they had to cover with the exchange, not necessarily accounting for the equity in the account that still existed with CL at $0.


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  #90 (permalink)
 
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jokertrader View Post
So the 88 million dollar loss IB is gonna take should cover your loss right? I.e IB should cover your loss from below 0 right?

https://www.businesswire.com/news/home/20200421005853/en/Interactive-Brokers-Issues-Statement-Crude-Oil-Contracts


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Big Mike View Post
That was my understanding as well, although I was really surprised it was that low of a number.

IB should be reaching out to those affected and explaining. This has a way of causing a ripple effect as well on their accounts, margin calls on other products, etc. The liability is even more than just covering the loss below zero.


addchild View Post
My understanding is that the 88M is just the shortfall they had to cover with the exchange, not necessarily accounting for the equity in the account that still existed with CL at $0.

Agree with @addchild. No mention of covering losses due to software issues. Implied it was accounts that went negative.

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