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Military版 - Interactive Broker 因为原油损失也替客户损失了1亿
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话题: brokers话题: he话题: oil话题: negative
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z******a
发帖数: 366
1
客户不需要倒赔,按价格为零结算。比中行的deal 要差一点。
Oil Crash Busted a Broker’s Computers and Inflicted Huge Losses
By Matthew Leising
May 8, 2020, 10:48 AM EDT
Interactive Brokers users couldn’t trade when oil broke zero
Incident will cost firm more than $100 million, chairman says
Syed Shah usually buys and sells stocks and currencies through his
Interactive Brokers account, but he couldn’t resist trying his hand at
Bsome oil trading on April 20, the day prices plunged below zero for the
first time ever. The day trader, working from his house in a Toronto suburb,
figured he couldn’t lose as he spent $2,400 snapping up crude at $3.30 a
barrel, and then 50 cents. Then came what looked like the deal of a lifetime
penny each.
What he didn’t know was oil’s first trip into negative pricing had broken
Interactive Brokers Group Inc. Its software couldn’t cope with that pesky
minus sign, even though it was always technically possible -- though this
was an outlandish idea before the pandemic -- for the crude market to go
upside down. Crude was actually around negative $3.70 a barrel when Shah’s
screen had it at 1 cent. Interactive Brokers never displayed a subzero price
to him as oil kept diving to end the day at minus $37.63 a barrel.
At midnight, Shah got the devastating news: he owed Interactive Brokers $9
million. He’d started the day with $77,000 in his account.
“I was in shock,” the 30-year-old said in a phone interview. “I felt like
everything was going to be taken from me, all my assets.”
Breach of zero burned some Interactive Brokers customers
To be clear, investors who were long those oil contracts had a brutal day,
regardless of what brokerage they had their account in. What set Interactive
Brokers apart, though, is that its customers were flying blind, unable to
see that prices had turned negative, or in other cases locked into their
investments and blocked from trading. Compounding the problem, and a big
reason why Shah lost an unbelievable amount in a few hours, is that the
negative numbers also blew up the model Interactive Brokers used to
calculate the amount of margin -- aka collateral -- that customers needed to
secure their accounts.
Thomas Peterffy, the chairman and founder of Interactive Brokers, says the
journey into negative territory exposed bugs in the company’s software. “
It’s a $113 million mistake on our part,” the 75-year-old billionaire said
in an interview Wednesday. Since then, his firm revised that loss estimate
down to $109.3 million. It’s been a moving target from the start; on April
21, Interactive Brokers figured it was down $88 million from the incident.
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.”
Senate Banking Hearing On Securities, Insurance And Investment
Interactive Brokers founder Thomas PeterffyPhotographer: Andrew Harrer/
Bloomberg
That could help Shah. The day trader in Mississauga, Canada, bought his
first five contracts for $3.30 each at 1:19 p.m. that historic Monday. Over
the next 40 minutes or so he bought 21 more, the last for 50 cents. He tried
to put an order in for a negative price, but the Interactive Brokers system
rejected it, so he became more convinced that it wasn’t possible for oil
to go below zero. At 2:11 p.m., he placed that dream-turned-nightmare trade
at a penny.
It was only later that night that he saw on the news that oil had plunged to
the never-before-seen price of negative $37.63 per barrel. What did that
mean for the hundreds of contracts he’d bought? He frantically tried to
contact support at the firm, but no one could help him. Then that late-night
statement arrived with a loss so big it was expressed with an exponent.
MORE COVERAGE
The 20 minutes that broke the U.S. oil market
The next chapter of the oil crisis: The industry shuts down
U.S. Oil Fund ordered to limit position, faces regulator concern
The problem wasn’t confined to North America. Thousands of miles away,
Interactive Brokers customer Manfred Koller ran into trouble similar to what
Shah faced. Koller, who lives near Frankfurt and trades from his home
computer on behalf of two friends, also didn’t realize oil prices could go
negative.
He’d bought contracts for his friends on Interactive Brokers that day at $
11 and between $4 and $5. Just after 2 p.m. New York time, his trading
screen froze. “The price feed went black, there were no bids or offers
anymore,” he said in an interview. Yet as far as he knew at this point,
according to his Interactive Brokers account, he didn’t have anything to
worry about as trading closed for the day.
Following the carnage, Interactive Brokers sent him notice that he owed $110
,000. His friends were completely wiped out. “This is definitely not what
you want to do, lose all your money in 20 minutes,” Koller said.
relates to Oil Crash Busted a Broker’s Computers and Inflicted Huge Losses
A screen shot of the message an Interactive Brokers customer received when
trying to trade oil after it had gone negative.
Besides locking up because of negative prices, a second issue concerned the
amount of money Interactive Brokers required its customers to have on hand
in order to trade. Known as margin, it’s a vital risk measure to ensure
traders don’t lose more than they can afford. For the 212 oil contracts
Shah bought for 1 cent each, the broker only required his account to have $
30 of margin per contract. It was as if Interactive Brokers thought the
potential loss of buying at one cent was one cent, rather than the almost
unlimited downside that negative prices imply, he said.
“It seems like they didn’t know it could happen,” Shah said.
But it was known industrywide that CME Group Inc.’s benchmark oil contracts
could go negative. Five days before the mayhem, the owner of the New York
Mercantile Exchange, where the trading took place, sent a notice to all its
clearing-member firms advising them that they could test their systems using
negative prices. “Effective immediately, firms wishing to test such
negative futures and/or strike prices in their systems may utilize CME’s ‘
New Release’ testing environments” for crude oil, the exchange said.
Interactive Brokers got that notice, Peterffy said. But he doesn’t feel
five days was enough time to upgrade his company’s trading platform.
“Five days, including the weekend, with the coronavirus going on and a
complex system where we have to make many changes, was not a sufficient
amount of time,” he said. “The idea we could have bugs is not, in my mind,
a surprise.” He also acknowledged the error in the margin model
Interactive Brokers used that day.
According to Peterffy, its customers were long 563 oil contracts on Nymex,
as well as 2,448 related contracts listed at another company,
Intercontinental Exchange Inc. For each of those, Interactive Brokers will
issue a credit of $37,630, he said.
To give a sense of how far off the Interactive Brokers margin model was that
day, similar trades to what Shah placed would have required $6,930 per
trade in margin if he placed them at Intercontinental Exchange. That’s 231
times the $30 Interactive Brokers charged.
“I realized after the fact the margin for those contracts is very high and
these trades should never have been processed,” he said. He didn’t sleep
for three nights after getting the $9 million margin call, he said.
Peterffy accepted blame, but said there was little market liquidity after
prices went negative, which could’ve prevented customers from exiting their
trades anyway. He also laid responsibility on the exchanges and said the
company had been in touch with the industry’s regulator, the U.S. Commodity
Futures Trading Commission.
“We have called the CFTC and complained bitterly,” Petterfy said. “It
appears the exchanges are going scot-free.”
Representatives of CME and Intercontinental Exchange declined to comment. A
CFTC spokesman didn’t immediately return a request for comment.
Read More: Oil Fall Prompts Call for U.S. to Probe Whether Market Defective
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 -- was expired the next day after the
historic plunge, so most of the market had moved to trading the June
contract.
“That’s how it’s possible for these contracts to go absolutely crazy and
close at a price that has no economic justification,” Peterffy said. “The
issue is whose responsibility is this?”
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话题: brokers话题: he话题: oil话题: negative