Interactive Brokers | Aussie Stock Forums

From what I remember (my IB account has been closed for over a year now) – the problem is if you are assigned on a short option. IB was only giving the first 10 mins of the day before randomly closing out positions in your account and if you have multiple positions, the ones they close out may have nothing to do with the option assigned. If they close out covering longs – it potentially leaves naked short positions

If it is a naked option, then you have no choice but to close the stock position and that’s not too hard in the first 10 minutes – although a bit close for comfort for stocks lower in the alphabet…

The problem comes in with the likes of short positions covered by another long position – eg calendars, verticals, etc. It puts the profitable side at a huge risk. Eg. an ITM call debit vertical that has almost reached max profit. You are planning to close soon, but find you have been assigned on the shorts. Quick enough to get out of the stock position, but if the market decides to go south while you are trying to close the long calls, especially as our MMs are often reluctant to start quoting for at least half to one hour in the morning. And they usually have horrendously wide spreads even if one can get a quote out of them.

It’s the main reason I like to have most of the next day to deal with assignment in order a good price for the covering long (or whatever adjustment I decide) – and then usually do the deal as a stock/option combo so that the original limited risk trade is retained.

They are quick to remind people that you can always list the option you want removed from your account to last – but that doesn’t help much if you have a lot of varied positions.

Anyway, that’s not the reason I closed the account. Their software allowed a crebit trade go through wrongly as a debit. Technically ended up paying for a calendar spread twice – paid to own it – then paid again to sell it I believe they are supposed to have some safety filters for the Oz market and this trade should never have gone through at those prices. At the very least, it should have gone through at lowest bid price.

Once I mistakenly entered a sell price in Iress at 19.5c instead of 29.5c. However, the bid was 26 and so the order was done at 26. IMO, this is how it should have been with my IB order which would at least still have been a credit, albeit lower than anticipated.

The IB software had my order mixed around and it became very confusing. Spent nearly an hour trying to work out how to close a simple calendar spread. Even got on the customer help and they told me how to do it – and by following their instructions – I got into that mess.

It may work better with US options, however, I have read many horror stories of traders over the years on other option related forums that have had their fingers burnt with the assignment issues as mentioned above… But the lack of filters for Oz options is a bit scary…

Cutz, you should still be able to trade on expiry day – as far as I know. I didn’t trade with them that long to find out! I have zero tolerance in these situations.

Sorry for the rant – still quite upsetting :rolleyes:

Be the first to comment

Leave a Reply

Your email address will not be published.


*