“ ‘I was in shock. I felt like everything was going to be taken from me, all my assets.’ ”
That’s Syed Shah (not pictured), a 30-year-old daytrader in Toronto whose ill-fated attempt to dip his toe into the oil pits CL00, -1.45% was covered in a recent story by Bloomberg News.
On April 20, Shah started with about $77,000 in his account. He put $2,400 toward buying crude, first at $3.30 a barrel, and then more at 50 cents. From there it got interesting. Ultimately, as the historic plunge in oil prices took hold, he was able to load up on futures at a penny each.
Turns out that penny price tag was pretty expensive.
Read:U.S. oil benchmark crashes below $0 a barrel to mark historic plunge
In reality, crude was already trading at negative-$3.70 a barrel — not at one cent — but the minus sign wasn’t recognized due to a glitch in the Interactive Brokers Group’s software. By the end of the day, Shah got the message: His $77,000 had turned into a $9-million debt.
Shah explained to Bloomberg News that he didn’t sleep for three straight nights after that.
Earlier this week, Thomas Peterffy, the billionaire chairman and founder of Interactive Brokers IBKR, +1.63% , took the blame for the issue that affected many more traders beyond Shah.
“It’s a $113-million mistake on our part,” he said, adding that traders will be made whole. “We will rebate from our own funds to our customers who were locked in with a long position during the time the price was negative any losses they suffered below zero.”