A Disturbing Development: Interactive Brokers Implements Price Caps; Are Trade Controls Next?

In a rather stunning development, moments ago Interactive Brokers unveiled a previously unseen warning, one called a “Mandatory Cap Price”, which warns traders that the brokerage may set a cap, a floor or outright cancel any order that would otherwise be marketable, due to a “price that is not consistent with a fair and orderly market.” 

Needless to say, for traders agreeing that they are willing to “trade” only based on what some arcane algorithm decides is a “fair and orderly market“, or otherwise get kicked out, leads to numerous questions, chief among which is: just what does IB know about what may be about to happen, and why is the most basic function of a marketplace – the exchange between a willing buyer and seller – suddenly compromised?

We have requested a comment from IB and will advise if/when we hear back.

via http://ift.tt/2clzwnE Tyler Durden

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