Anyone trading in the box?

Discussion in 'Order Execution' started by Ticketwatcher, Feb 10, 2006.

  1. I have been an active trader since the early nineties when data feeds were very expensive and 20 dollar commissions were considered discount. I was under the impression that you could not hold a long and a short position of the same stock in the same account. In the early days of online trading in order to cover you just hit buy. I took a 1000 share position on WMT on a MOO this morning. It executed a 45.60. It moved my way and I decided to cover it at 45.53. But my buy and cover buttons are side by side and I accidentally hit buy. I bought 1000 WMT at 45.53, so I was holding two positions. Since the stock was then trading around 45.60, I put in a sell order at 45.58. I got an error message saying something to the effect that in the box you had to cover your short first. By this time the stock had moved up. I covered at 45.70. Then I sold at at 45.75. Somehow, it did not work out too badly as I cleared 140 dollars in my less than six minutes of confusion. My question is, is anyone taking both sides of the same stock intentionally?
  2. GTC


    Who was the broker?
  3. Ameritrade
  4. GTC


    Ameritrade allows clients to hold boxed positions overnight. You may not sell the long side first. The margin requirement is different for the boxed position. However, your buying power still decreases as usual if you use this approach. If you are a noise trader, it may make some sense to use this method if the market is going side ways. It makes less sense to use it with the broker that only offers per-share pricing.
  5. alanm


    What's the purpose of a box position if you can't use it to sell the long side without an uptick?