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Exceptional Circumstances

Volatile markets and their impact on your portfolio

Financial markets tend to move and sometimes even go through rapid shifts. This movement is called market volatility. In times of highly volatile markets that are caused by unlikely and rare occurrences, we strongly urge you to monitor your investment portfolio more intensive.

We also recommend paying particular attention to the communication of Interactive Brokers.

In this article we are explaining how to proceed a more intense portfolio monitoring, where you could find further information and potential impacts on your portfolio.

How do I see if a product is blocked?

The blocking of a product can occur at any moment – in most cases there is no advance warning.

For an investor it is indispensable to have an overview of the situation and to see at short notice whether the products in his portfolio are still tradable in order to be able to act immediately. Whether a product has been blocked by the responsible broker or the respective exchange can be determined on the basis of various indications.

In the following we will show you how to check if products have been blocked due to unpredictable events (also referred to as Black Swan Event).
The examples are based on LYNX Basic and the Trader Workstation:

After logging into LYNX Basic and filling the order ticket, it is recommended to check the preview window. If you are not able to transmit an order in the product to LYNX because order execution by Interactive Brokers is not possible you will immediately receive a red error message.

Please check whether the error message refers to the ongoing exceptional circumstances; this is usually displayed as “Regulatory Restriction” or “Sanctioned“.

After logging into the Trader Workstation you can see the first signs of a blocked product within the “Financial Instrument” column of your watchlist or portfolio, in most cases it will show a red warning icon. Hover your mouse over the warning icon to read the message. Messages like “Sanctioned” or “Regulatory Restriction” generally indicate a block resulting out of an xceptional circumstances.

During Black Swan Events, stock exchanges may remain closed and products may not be tradable. In this case, you may not see any warning signs in your watchlist or portfolio. However, as soon as you have filled the order ticket and displayed the preview window, you will receive an error message indicating that the product is blocked due to a “Regulatory Restriction“. Alternatively, the message may display that the product is “Sanctioned“.

Alternatively, you can obtain information about the tradability of the products from the websites of Interactive Brokers or other external sources. In principle, the websites of Interactive Brokers, the respective stock exchanges or the websites of authorized financial authorities are suitable for obtaining trustworthy information. You will read more about this in the following part.

Stay informed

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.

MaaPörssiVerkkosivu
YhdysvallatNASDAQhttps://www.nasdaq.com/
New York Stock Exchange
https://www.nyse.com/index
AustraliaAustralian Stock Exchange
https://www2.asx.com.au/
BelgiaEuronext Brussel
https://live.euronext.com/nl/markets/brussels
KanadaToronto Stock Exchange
https://www.tsx.com/
TSX Venture
https://www.tsx.com/
Saksa
Frankfurt Stock Exchange
https://www.boerse-frankfurt.de/en
Stuttgart Stock Exchange
https://www.boerse-stuttgart.de/en
ViroNASDAQ Baltic
https://nasdaqbaltic.com/
RanskaEuronext France
https://www.euronext.com/en/markets/paris
Hong KongHong Kong Stock Exchange
https://www.hkex.com.hk/?sc_lang=en
UnkariBudapest Stock Exchange
https://www.bse.hu/
IntiaNational Stock Exchange of India
https://www.nseindia.com/
ItaliaBorsa Italiana
https://www.borsaitaliana.it/homepage/homepage.en.htm
JapaniTokyo Stock Exchange
https://www.jpx.co.jp/english/
LatviaNASDAQ Baltic
https://nasdaqbaltic.com/
LiettuaNASDAQ Baltic
https://nasdaqbaltic.com/
MeksikoMexican Stock Exchange
https://www.bmv.com.mx/en/markets/equity
AlankomaatEuronext Nederland
https://live.euronext.com/nl/markets/amsterdam
NorjaNASDAQ Nordic
http://www.nasdaqomxnordic.com/
Oslo Stock Exchange
https://www.euronext.com/en/markets/oslo
ItävallatVienna Stock Exchange
https://www.wienerborse.at/
PuolaWarsaw Stock Exchange
https://www.gpw.pl/en-home
VenäjäMoscow Exchange
https://www.moex.com/en/
SingaporeSingapore Exchange
https://www.sgx.com/
EspanjaBolsa de Madrid
https://www.bolsamadrid.es/esp/aspx/Portada/Portada.aspx
Yhdistynyt kuningaskuntaLondon Stock Exchange
https://www.londonstockexchange.com/
RuotsiNASDAQ Stockholm AB
http://www.nasdaqomxnordic.com/
ItävaltaSIX Swiss Exchange
https://www.six-group.com/en/home.html

Financial AuthoritiesWebsiteExternal News SourceWebsite
SEC (USA)https://www.sec.gov/Bloomberghttps://www.bloomberg.com/
AFM (The Netherlands)https://www.afm.nl/CNBChttps://www.cnbc.com/world/?region=world
FSMA (Belgium)https://www.fsma.be/nlCNN Financialhttps://money.cnn.com/data/us_markets/
BaFin (Germany)https://www.bafin.de/Forbeshttps://www.forbes.com/
FIN-FSA (Finland)https://www.finanssivalvonta.fi/en/Investinghttps://www.investing.com/
AMF (France)https://www.amf-france.org/MarketWatchhttps://www.marketwatch.com/
CNB (Czech Republic)https://www.cnb.cz/cs/Reutershttps://www.reuters.com/markets/currencies/
Twitterhttps://twitter.com/

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

How do extreme markets influence my portfolio?

Extreme markets are markets that are experiencing high volatility movements due to internal or external events. Those markets movements have many consequences such as amongst others:

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 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.

In extreme movement of markets, the volatility tends to increase.

Change in IBKR Margin Policies

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 | interactivebrokers.com

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 liquidities 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.

Change in Exchange/Statutory

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:

  • New positions not being able to be opened.

  • Current positions may not be closed anymore.

  • Transfers of targeted assets may be unavailable.