I had an interesting experience this morning I wanted to share with everyone, particularly since by telling the story, it may save someone a panic in their own trading.
I entered the day, as I always do, short a large number of individual equities. One of them was symbol FTI.
On my portfolio screen (Interactive Brokers), it shows all the stuff you’d expect – – symbol, entry price, quantity of shares, value of the position, and net profit/loss. In the pre-market, the P/L for the day is usually $0, because there’s no trading in most securities, although a few outliers will have information.
FTI, however, showed a loss of a substantial five-figure sum. This just about stopped my heart, because the loss was almost exactly the same size as the position itself, implying a 100% gain in the security. I felt like MacGruber……..
I quickly checked news, and there was absolutely nothing going on with FTI. Indeed, its pre-market bid/ask showed only a very small gain over the prior close. And yet I had this massive loss on my screen both for the stock and, in turn, for my portfolio as a whole.
Well, it turns out to be a shortcoming in the Interactive Brokers system. You see, FTI had some kind of corporate action, and I guess the CUSIP changed behind the scenes. In the accounting of this, the portfolio software gave me an entry price of $0.00 (e.g. it’s like I shorted the stock at $0, which means that any positive value which create that much of a loss). So now it makes sense that the “loss” was exactly the same size as my actual position.
I like IBKR a lot, so this isn’t a big slam against this, but it sure did raise my blood pressure. I’m going to have to wait until tomorrow to see if the “loss” is cleared out of my portfolio screen. I sure hope so, because I don’t want to have to wrangle with them anymore on this kind of nonsense.
