Exceptional Circumstances
This page provides information about market volatility and its possible impact on investment portfolios. Whether you are a seasoned investor or new to trading, the content below outlines how extraordinary market conditions may affect investments and what tools exist to monitor portfolios more closely.
What are exceptional circumstances?
Financial markets can experience periods of significant volatility, often triggered by rare or unexpected events. During such times, it may be useful to monitor your investment portfolio more closely and to pay particular attention to communications from Interactive Brokers. (IB).
This article explains how to monitor your portfolio more effectively, where to find additional information, and how such events may affect your portfolio.
How do I see if a product is blocked?
For investors, it is important to quickly determine whether the products in their portfolios remain tradable. A product may be restricted either by the responsible broker or by the exchange.
Below are examples of how blocked products may be identified in LYNX+ and the Trader Workstation.
LYNX+
After logging into LYNX+ and filling in the order ticket, the preview window shows if execution is possible. If order execution is not available, you may see a red error message. In many cases, this will refer to “Regulatory Restriction” or “Sanctioned”.
Trader Workstation
In your watchlist or portfolio, a red warning icon may appear in the “Financial Instrument” column. Hovering over the icon will display messages such as “Regulatory Restriction” or “Sanctioned”, indicating a block.
During so-called Black Swan Events, exchanges may remain closed, and products may not be tradable. In such situations, warning signs might not be visible in your portfolio view, but once you attempt to submit an order, the preview window will usually display a message such as “Regulatory Restriction” or “Sanctioned”.
In addition, information about tradability can be obtained via the websites of Interactive Brokers, the respective exchanges, or the websites of competent financial authorities.
Products can be blocked at short notice, sometimes without prior warning.
Stay informed
As an investor, it is important to stay informed about the financial markets. Information about market restrictions and stock-specific measures is usually available on the websites of the relevant exchanges. Additional insights may be obtained from external sources.
Disclaimer
Please note that LYNX does not assume liability for the content of external sources.
Overview Exchanges
Overview External Resources
| Financial Authority | Website | External News Source | Website |
|---|---|---|---|
| SEC (USA) | SEC.gov | HOME | Bloomberg | Bloomberg.com |
| AFM (The Netherlands) | Voor de Sector | CNBC | International: Top News And Analysis |
| FSMA (Belgium) | Nieuws & Waarschuwingen | FSMA | CNN Financial | Stock Market Data – US Markets, World Markets, and Stock Quotes | CNN |
| BaFin (Germany) | Startseite | Forbes | Forbes |
| FIN-FSA (Finland) | Financial Supervisory Authority | Investing | Investing.com – Stock Market Quotes & Financial News |
| AMF (France) | Autorité des marchés financiers : protection de l’épargne, information des investisseurs, fonctionnement des marchés financiers | AMF | MarketWatch | Home Page – MarketWatch |
| CNB (Czech Republic) | Česká národní banka | Reuters | Currency Market Headlines | Breaking Stock Market News | Reuters |
| https://twitter.com/ |
How do extreme markets influence my portfolio?
Extreme markets are characterized by significant volatility due to internal or external events. These market movements can have several consequences, including but not limited to:
Increase in Volatility
Volatility is a statistical measure of the dispersion of returns for a given security or market index. In most cases, the higher the volatility, the riskier the security. Volatility is often measured as either the standard deviation or variance between returns from that same security or market index.
In the securities markets, volatility is often linked to large price swings in either direction. For example, when the stock market rises or falls more than one percent over a sustained period, it is typically described as a “volatile” market. An asset’s volatility is also a key factor when pricing options contracts.
During periods of extreme market movement, volatility often increases, which can affect the valuation and tradability of financial instruments.
Change in IB Margin Policies
As a LYNX client, your trading account is held with Interactive Brokers (IB). The trading account can be a cash account or a margin account. For margin accounts, IB enforces strict margin requirements, the terms and conditions of which can be found by clicking here: Margin Requirements | Interactive Brokers Ireland
LYNX has no influence over these policies, which are managed exclusively by IB. In periods of exceptional volatility, IB may adjust margin requirements or related measures at its own discretion. Such adjustments are generally intended to reduce leverage in client portfolios and to mitigate systemic risk.
Interactive Brokers applies a forward-looking and prudent approach to risk management.
Please note: It is the responsibility of each investor to maintain sufficient excess liquidity in their account. If margin requirements are not met, positions may be liquidated without prior notice.
Change in Exchange/Statutory
Exchanges may restrict or halt the trading of certain securities with or without prior notice.
Brokers are required to comply with all applicable regulations related to such restrictions or halts, which may affect the ability to transmit or execute orders.
This can result in, for example:
- The inability to open new positions.
- The temporary unavailability of closing existing positions.
- Transfers of affected assets being restricted or delayed.