Exceptional Circumstances

Financial markets are known to fluctuate, sometimes even experiencing rapid shifts. This is referred to as market volatility. During periods of heightened volatility, often triggered by rare and unexpected events, we strongly recommend that you monitor your investment portfolio more intensively.

We also advise you to pay special attention to communications from Interactive Brokers.

In this article, we explain how to engage in more intensive portfolio monitoring, where to find additional information, and how these situations could potentially impact your portfolio.

For investors, it’s crucial to maintain an overview of the situation and to quickly determine if the products in their portfolios are still tradable, enabling them to act promptly. Whether a product has been blocked by the responsible broker or the respective exchange can be determined based on various indications.

Below, we’ll show you how to check if products have been blocked due to unpredictable events, often referred to as a Black Swan Event.

As an investor, staying on top of the financial markets is crucial. You can find certain and reliable information about market restrictions as well as restrictions concerning certain stocks on the respective website of the exchange. We also recommend using external sources for more insights.

Disclaimer: Please note that LYNX does not assume any liability for the mentioned sources.

Extreme markets are markets that experience high volatility movements due to internal or external events. These market movements can have several consequences, including but not limited to:

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 associated with big swings in either direction. For example, when the stock market rises and falls more than one percent over a sustained period, it is called a “volatile” market. An asset’s volatility is a key factor when pricing options contracts.

As a LYNX client, you open a trading account held at Interactive Brokers (or “IB”). The trading account can be a cash account or a margin account. In the case of a margin account, IB has a very strict margin requirement, the terms and conditions of which can be found by clicking here: Margin Requirements | Interactive Brokers Ireland

LYNX has no influence on the operation of this margin, this is the sole responsibility of IB. To ensure the safety of its clients in all circumstances, Interactive Brokers may change certain measures relating to margin requirements in the event of unprecedented volatility in the financial markets at any time and also fully at their own discretion. When this occurs, the changes encourage the reduction of leverage in client portfolios and thereby ensure that client accounts are properly funded.

Interactive Brokers are committed to a forward-looking, prudent, and realistic approach to risk management.

You must ensure to have enough excess liquidity to protect your portfolio from liquidation due to increase margin requirements. In case of a margin violation immediate liquidation of portfolio positions without further notification can occur.

Exchanges may restrict or halt certain securities from trading with or without notice.

Brokers will follow all regulations related to restrictions or halts which impact the transmission of orders.

This may result in the following events: