An unbelievable story about the NASDAQ today:

Discussion in 'Order Execution' started by sigsegvboogman, Jan 19, 2006.

  1. In all of the years I have traded the NASDAQ and all of the time I have either been screwed or fighted from being screwed, I have never encountered what happened to me today.

    This morning (1-19-06) at 9:39:21 I by accident traded 200 shares of WBPRK. 100 shares long at 150 and 100 shares long at 151. Well, the POS normally traded at 25/share, but was extremely illiquid and had a bid - ask in the range of 25-155 at that moment. I originally wanted to place a SELL order as a limit at that price: Nothing close to market, but made the error. My broker called up Nasdaq to do the routine bust: NASDAQ REFUSED TO BUST IT. The y called the Market Maker and they refused to bust. I guess 125 away from market isn't enough for NASDAQ.

    So the issue was escalated: Marketwatch was called and all of that. People within the Nasdaq were even in awe that it wouldn't bust.

    Well to make a long story short, after 4 hours of fighting, NASDAQ still wouldn't bust, stating that "The trade was outside the rules of erroneous trading based on our policies". The market maker finally agreed to an adjust that was 5 bucks in their favor, hence I lost 1k exiting at market. I guess these guys can't make 8ths and 16ths anymore, so they have to make money someway.

    I have been doing this for years and I never thought something like this would be allowed to happen. I remember the old days when I used to hold erroneous trades (in my favor) for 3 weeks before a bust, knowing they would come. Now I just initiate them to save the time.

    Now to think the Nasdaq is promoting effeciency and fairness is complete BS.

    Hey, I guess that's what happens when you protect your own: The little guy gets it. I guess I should bow down the Nasdaq and be thankful I only lost 1k instead of 25k!
  2. Choad


    Nasdaq Error Results in Incorrect Quotes
    Thursday January 19, 12:31 pm ET
    By Michael J. Martinez, AP Business Writer
    Nasdaq Computer Error Results in Incorrect Stock Quotes, Failed Order Reporting

    NEW YORK (AP) -- Computer problems at the Nasdaq Stock Market led to erroneous stock quotes on a number of major online financial news sites and brokerages Thursday and prevented approximately 81,000 trades from being reported in the last minutes of the previous trading session.

    The stocks affected are all listed on the New York Stock Exchange. NYSE-listed stocks can also be traded electronically on Nasdaq's computer platform, and Nasdaq is responsible for reporting those trades to a consolidated listing service so investors can see the latest price for a given stock, whether it was traded on the floor of the NYSE or via Nasdaq's computers.

    The Nasdaq said a computer glitch occurred at approximately 5:50 p.m. Eastern time Wednesday, when a number of transactions involving NYSE-listed stocks that had been made at 9:50 a.m. were reposted to the consolidated tape. That resulted in erroneous closing prices for a number of NYSE-listed stocks being reported, according to a notice issued by Nasdaq Operations late Wednesday.

    It was not immediately known how many NYSE-listed stocks were affected by the computer errors. The Nasdaq's operations notice said 650 transactions were retransmitted, but The Associated Press' computer systems rejected 16,127 transactions that were retransmitted at that time. The rejected transactions involve 1,487 NYSE-listed stocks, including all 28 NYSE stocks in the Dow Jones industrial average.

    A number of Web sites viewed by the AP Thursday -- including MSN Money, Yahoo! Finance and, along with online brokers Charles Schwab and E-Trade -- showed erroneous price changes for a handful of NYSE stocks. Stock quote services on both and also posted incorrect price changes.

    AMR Corp., for example, actually closed at $20.39 on Wednesday, but the retransmitted trades from earlier in the session had AMR closing at $18.79. In midmorning trading on Thursday, AMR was actually down 16 cents at $20.23, yet other sites listed that quote as being up $1.44 to $20.23.

    The major indexes appeared to be unaffected by the misquoted stocks.

    The AP's market data services caught the errors, and the stock tables it sent to newspapers for Thursday editions were correct.

    Earlier Wednesday, a related computer problem resulted in the 81,000 trade reports from being sent to the consolidated tape in the last 20 minutes of trading. The trades themselves were executed, but the price quotes from those trades could not be seen by traders on the NYSE or on non-Nasdaq computer trading systems.

    The Nasdaq only trades a small percentage of NYSE-listed stocks on a given day. However, it's important for traders to know the most recent price a stock has fetched to help determine whether to buy or sell, and the absence of those Nasdaq trades in the last 20 minutes of trading resulted in investors not having a complete picture of the market as they made their trading decisions.

    A spokeswoman for the Nasdaq had no immediate comment beyond the Nasdaq Operations notice sent Wednesday night. A spokesman for the NYSE had no immediate comment.
  3. mnx


    so they gave you $30 and you're supposed to feel good about that?? That's 3$ above the 52week high. I don't care how illiquid the stock is, that is far more crooked than anything any nyse specialist has ever done. If anyone other than a MM got this fill it wouyld have been busted in a second guarenteed.

    This was a clearly errenous trade (according to nasdaq rules) and there is no way the trade should have stood.

    You should definitely appeal this.

  4. Norm


    Just what are the NASDAQ bust rules? If I accidently sell stock at 3 cents per share that I intended to sell at $3.00 per share, can I have the trade busted as erroneous?
  5. I agree with the fact that 30 was complete BS. The MM wouldn't adjust to 25 or even 28. I had to take it or leave it, per NASDAQ. If I didn't go for it, then my 25k would have been tied up in the loss for who knows how long while it went to arbitration. I decided to take my lumps and move on. Thank you NASDAQ. You know what's funny: ARCA busted the 100 shares done at that PRICE on the spot! Same time stamp and everything. I never thought they would stoop to AMEX levels.
  6. Norm


    Are you certain that accepting an unfair settlement means that you cannot seek recourse for the remainder?
  7. mnx


    The last post in the above link is NASD Rule 11890 (their guidelines are on page 5)

    Anything over 3% from the nasdaq inside should have been busted. However in this case there was no Nasdaq inside?????????? What purpose do MM's serve? Are they there just to screw everyone over?

  8. I exited the position at the 1k loss and moved on. The time and money involved in escalation is just not worth it. Nasdaq knows this just like I do.

    Deep deep down, the markets are not equal. Those are just the facts of life. I just cannot understand why Nasdaq in the face of competition, mergers and SEC rules rolling out would allow this to happen in this day and age?
  9. "

    The last post in the above link is NASD Rule 11890 (their guidelines are on page 5)

    Anything over 3% from the nasdaq inside should have been busted. However in this case there was no Nasdaq inside?????????? What purpose do MM's serve? Are they there just to screw everyone over?


  10. I promise you that if this order went throgh on any ECN even the ones that are run through Montage that order would have been broken for sure. The only reason it did not break was because of "who" you hit. You can tell the NASDAQ to lick balls as far as I am concerned it is a matter of the guy with the biggest stroke always gets his way.

    Feel like phoning them myself for that one and complaining.
    So generous of them to give it to you $5.00 buck out instead of 125.00 Actually forget the NASDAQ just call the SEC.

    #10     Jan 19, 2006