I assume it's a price range error to protect fat finger orders from going way too low behind the bid or ask. Does anyone know the % range the error is setup or does it depend on your broker?
Robert Morse gave the right answer in the other thread you posted in. I do remember "in the past" shenanigans, one in particular that happened to me, 1999, I think, I had 100 shares of AOL that was trading around 105 and had to be away from any internet access for the entire day. I set a regular hours stop at 100 and sell at 115. I came home that afternoon, saw AOL trading above 115 on CNBC screen while my computer was booting up. Once I got to my Datek account, obviously the trade had executed, but then saw that it had executed at $98!! Looking at my screen, seeing the intraday high and low, it had never traded below 102 even. Called Datek, they checked into it and called me back. Some off the wall exchange executed a trade by matching prices internally triggering the stop, which also went to that exchange. Clearly this was some kind of dirty trick, but the saving point was that my order was clearly marked as regular hours, and this trade executed pre-market. They put the 100 shares back in my account. The next day, AOL was NOT trading at 115, and I called them up again, and believe it or not, they agreed, and gave me the $115 that my original order should have traded. Good times.
Stops don't work in premarket so it shouldn't have executed at all. I don't know about 20 years ago though.
20 years ago, seems like yesterday. A lot of very thinly traded stocks would be on Archipelago after hours with a 1 cent bid and a hundred dollar ask. A friend and I discussed at great length matching prices to transfer cash, it would have been idea for money laundering. Say If I owed him $400, I could put in a sell order for 80 shares at 5.00 per share of some unknown stock with that extreme after-hours spread and he could put in a buy at the same time. For some reason, whole lots got treated differently that odd lots, Odd lots didn't seem to show up, or something, I don't remember every detail. And with the fill or kill order type, I am pretty sure it would work. The trick would be, if it was a $10 stock, you want to put your bid in low enough nobody would sell to you. Anyway, we talked about it a lot, but never tried it, it was pretty obvious that it was illegal and we thought that eventually it would show up and we'd be accused of money laundering for just trying out an idea. But I do remember reading that the stock market was used for illegal money transfers back then.