well today came and went with no bust or 1 % adjustment on the trade to my account ... I guess I will have to wait until T + 3 next week just to be sure thanks people for taking the time to comment on the matter ... if the trade fully clears next week I will describe in more detail what happened to anyone who is curious
Today I had a trade busted, and now I am wondering how exactly that (stupid and unnecessary) process works and if or how a retail trader can profit from it. My case was WDFC, which is not very liquid. When there was very sudden and heavy buying interest around 3:40 pm, my limit order to sell WDFC on ISLD was taken in what AFTERWARDS turned out to have been a spike. The other party of my trade had it busted by ISLD, my broker was talking about erroneous order matching or some kind of bullshit, but it is obvious what happened: The other party of the trade speculated that they would be able to bust the trade if it would turn out to be just a spike (which it did), and in the unlikely event that WDFC would have just traded through my limit, they would be happy and I would be stuck in the trade. Now how can I be the "other side" of such trades in the future? Let me guess, retail traders cannot have trades busted... Or can they? If so, we should be able to utilize the same trading strategy that worked against me today: Have a computer or computers scan constantly for extraordinarily big price moves and take out limit orders sitting on ISLD at a very UNFAVORABLE PRICE. If you get an execution at the top (or bottom if you sell) and cannot make a profit immediately (by the security trading through your price), just have the initial trade busted. By the way, the mere fact that trades can be busted solely based on hindsight regarding price action shows that the securities industry is regulated no better than a casino who is allowed to cheat their customers for an additional edge: The clean and in my opinion the only legal way this should be handled is the following: If ISLD is of the opinion that a trade that is more than 1% off or 10% or whatever they use in their rules (which by the way I have not found on their website yet) must be erroneous and should therefore be busted, they should implement that in their order matching algorithm upfront, so that you don't get an execution on it in the first place. I don't see any technical reason why this should not be possible, and I don't see how it can be legal for them not to do it. The way it is now, somebody whose contact/affiliation with ISLD is good enough can get nothing else but a free option with any trade that constitutes a sufficiently large price move. Any opinions?
I caught the Cin exchange sleeping on a listed $.40 cents in the money on a measly 100 shares. The firm I trade at said the "the trade is going to be broken because my print was the low of the day. The stock gapped up and I was got it at the previous day's closing price. I can't belive that some trader would call to break a 100 share trade.....$40.........waste of time....I told them to take me to arbitration.........they broke the trade.
ive had premarket fills busted 3 hours later.the problem comes when you get a trade like this and you sell the stock if they break the trade you are short.i think there should be a set time limit.
An erroneous complaint must be transmitted via facsimile to Nasdaq Market Operations within certain time periods, depending on when the alleged erroneous trade was executed. Specifically, transactions executed between 9:30 a.m. and 10:00 a.m., Eastern Time (ET), must be received by 10:30 a.m., ET, while transactions executed at all other times (i.e., outside the 9:30 a.m. to 10:00 a.m., ET, time window) must be received by Nasdaq Market Operations within 30 minutes of execution. http://www.nasdaqtrader.com/trader/news/2000/headtraderalerts/hta2000-1.stm Clearly Erroneous Trades Chapter 8 Revised October 2000 http://www.nasdaqtrader.com/trader/tradingservices/marketwatch/tradermanual/chapter08.pdf Vad
my trade was listed MRK.filled premarket by instinet like 2 bucks under market.i kept waiting and hoping.but i didnt dare sell it because i knew what could happen.