The US-based large brokerage Interactive Brokers Group, Inc. (NASDAQ:IBKR) has issued a new SEC filing in which it has revised the aggregate loss it sustained from the movements in oil prices several weeks ago that caused a certain amount of customers to assume a negative balance on their accounts.
The extreme volatility experienced on April 20, 2020, in the New York Mercantile Exchange (NYMEX) West Texas Intermediate Crude Oil contract led to the drop in prices to a negative $37.63. Since this contract is the basis for determining the settlement price for cash-settled contracts traded on the CME Globex and also for a separate, expiring cash-settled futures contract listed on the Intercontinental Exchange Europe (ICE Europe), the price movement led to adverse price movements for many market participants trading US oil that day.
As a result, several IBKR customers experienced negative account balances and losses of their entire equity as a result of the price movements and IBKR fulfilled the required variation margin settlements with the respective clearinghouses on behalf of its customers. As such, after revising the information related to these events, the broker has indicated that it will recognize a revised aggregate loss of approximately $104 million.