I am playing my second tiniest violin for them right now.
Oil crash busted broker’s computers and inflicted big losses
11–20 of 182 posts
Re: Oil crash busted broker’s computers and inflicted big losses
#12Incorrectly assuming values can never be negative is an all-too-common occurrence in trading and financial software. In 2012 Swedish stock futures trading was suspended for a time because their matching engine used an unsigned type for order quantities and someone submitted an order with a negative value which wrapped around to 4 billion: https://www.reuters.com/article/markets-sweden-bug/swedish-s... Interactive Bro…
>Interactive Brokers' software is usually very solid. That is certainly not my experience. Endless bugs in TWS over the years, and the support people are unbelievably rude. Every time I try to report a bug they start out by blaming me, it usually takes 2-3 back and forth rounds until they admit it's actually broken and tell me they'll forward the issue to the tech people. After that it's radio silence and you never k…
I'll admit I haven't worked with their API or done anything too fancy with it. My experience is all relatively infrequent click trading, chart generation, and such.
Re: Oil crash busted broker’s computers and inflicted big losses
#13It's really odd that this bug occured, as IB has no issue pricing credit spreads with negative values. Must be an issue specific to commodities futures contracts. I wonder what data types they were using.
Re: Oil crash busted broker’s computers and inflicted big losses
#14Incorrectly assuming values can never be negative is an all-too-common occurrence in trading and financial software. In 2012 Swedish stock futures trading was suspended for a time because their matching engine used an unsigned type for order quantities and someone submitted an order with a negative value which wrapped around to 4 billion: https://www.reuters.com/article/markets-sweden-bug/swedish-s... Interactive Bro…
> Interactive Brokers' software is usually very solid.
Except their web portal. 40-50% of the time it is unable to load my portfolio data (even without the current market value, just the number of stocks and cash balances). At the same time I log into the mobile app, it forces a logout on the web app (why?) and it is able to load the balances and portfolio. No explanation. Same network, no adblocker or other browser plugin.
Re: Oil crash busted broker’s computers and inflicted big losses
#15Would any of the traders mentioned that owe all that money to Interactive Broker's have to pay the total amount? Or is that part of Interactive Brokers' loss claim.
From the story: > Customers will be made whole, Peterffy said. “We will rebate from our own funds to our customers who were locked in with a long position during the time the price was negative any losses they suffered below zero.” I'd imagine this is so they don't get sued and have some shoddy code pop up during trial.
or they're raising capital and the end justifies the means
same result of avoiding litigation, but even fewer consequences
Re: Oil crash busted broker’s computers and inflicted big losses
#16Would be nice to have more details on exactly what happened with the trades. Did the trades clear? Did IB liquidate the contracts before expiration? Was someone on the hook for taking physical delivery?
Re: Oil crash busted broker’s computers and inflicted big losses
#17Oh a guy with $77,000 in his day trading account didn't know futures can go negative. I'm shocked.
Ironically this is the same guy who will sell you a gym contract without a cancellation option and blame you for not doing your research when you owe him $1100.
Re: Oil crash busted broker’s computers and inflicted big losses
#18> Peterffy said there’s a problem with how exchanges design their contracts because the trading dries up as they near expiration. The May oil futures contract -- the one that went negative -- expired the day after the historic plunge, so most of the market had moved to trading the June contract, which expires May 19 and currently trades around $24 a barrel. > “That’s how it’s possible for these contracts to go absolu…
Financial settlement against a spot market in a large port.
Re: Oil crash busted broker’s computers and inflicted big losses
#19If you don't know what is going on, then why on earth would you risk so much money?
IB fucked up, no doubt, but these idiots are trading shit they know nothing about.
Don't trade on margin.
Re: Oil crash busted broker’s computers and inflicted big losses
#20> Peterffy said there’s a problem with how exchanges design their contracts because the trading dries up as they near expiration. The May oil futures contract -- the one that went negative -- expired the day after the historic plunge, so most of the market had moved to trading the June contract, which expires May 19 and currently trades around $24 a barrel. > “That’s how it’s possible for these contracts to go absolu…
Financial settlement against a spot market in a large port.
Cash settled contracts exist. These people just chose not to buy them. The question is how to structure physically settled contracts. After all, oil needs to get delivered to someone at some point.