Hello everyone,
I just received the following rejection message from C2:
We recently received the following rejection message when attempting to place an order in your account U1502771: ‘Insufficient margin (It does not comply with IB’s order handling rules for derivatives that result in physical delivery. Please refer to the IB web site for further details.)’
Why do I get these messages now? Do the other clients of this system get them? Does it mean I cannot follow this system? It has not happened until now after 2 months with this system.
Even worse, IB close 2 of my positions, resulting in a loss of around $5000.
Thanks for any explanation.
Certain futures assume physical delivery during the future’s month. IB doesn’t support physical delivery and closes position during last couple days of the previous month. Also IB doesn’t allow to trade these futures. The message you received from C2 is due to this reason: C2 auto-sync tries to restore position, but IB prevents it.
If you want to keep that position you need to open same size position (roll it) in the futures of next months.
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You did not name the system but I believe I know of the system you refer to. IB sends out multiple notices prior to closing positions and in each one they provide a link which explains the cut-off dates required for closing positions and these were sent out last week and over the weekend. The close-out dates vary depending upon whether you are long or short. As stated by Andrey, IB would not allow the system to attempt to auto sync since the contract is past their cut-off date, thus the auto trade rejection notice.
Also, the system developer was made aware of the IB requirements last week since there were multiple IB traders with the system and he chose to ignore a warning from a subscriber to roll over the position to a further out contract. This was a foreseeable train wreck and is the fault of the developer and not C2. Unfortunately though, it appears the C2 trade record will not reflect the reality of what occurred.
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