Hello all,
Quick question. Does anyone know if 212 are legally allowed to close out/sell our positions for us?
I have just seen on a a forum that if a company gets margin called then 212 can close our positions regardless of whether we choose to sell or not as they own the shares.
Is that correct?
Depends what you’re talking about. CFD’s yes, they can close them for you when you no longer meet the margin requirement.
Shares are owned by us, which are held with IBKR as the custodian. Yes in some instances they can sell your shares to cover such things like negative balances or any owed fees. They are not allowed to just randomly sell your shares.
Edit: (Negative balance is actually not a problem for retail customers.)
It’s probably worth adding this is relatively standard across brokers. They generally sell part of your biggest balance to cover fees if you don’t have sufficient spare cash in your account.
Yeah I m am just talking about retail. Not CFD’s
They can sell your shares for a couple reasons.
Stock splits can be one, negative balance and covering fees. They do this for stock splits if say you have 0.2 of a share they can not effectively split that as stock splits are done on whole shares. Same with reverse stock splits aswell.
I own retail shares on a long position so no need for money in the bank.