Following the unprecedented price moves in the futures contracts of West Texas Intermediate (WTI) oil on Monday of this week, US-based Interactive Brokers has reported a provisional loss of $88 million as a result of customer trading. According to a statement published by Interactive Brokers Group, Inc, several of its customers held long positions in these CME and ICE Europe contracts, and following the historical price drop, they incurred losses in excess of the equity in their accounts.
Following this, the broker fulfilled its required variation margin settlements with the respective clearinghouses on behalf of its customers, which has put the company out of pocket around $88 million. Nonetheless, the broker indicated that this loss would not have a material effect on its financial position.
It’s important to note that the founder of the brokerage firm, Thomas Peterffy, gave an interview with CNBC yesterday in which he stated that: “there are about another half a billion dollars of losses that somebody is sitting on… and I do not know who those folks are.” This is a signal that other brokers may have also recorded losses as a result of the negative prices in WTI oil and it will be important to look for indications of such losses in forthcoming monthly and quarterly announcements from FX and CFD brokers.