Just a note on my last reply. Usually the trader who makes the error reports the trade to his introducing Broker and the introducing brokers clearing firm submits a request to ISLD to break the trade. ISLAND decides if the trade will be broken. If the BID-ASK spread on stock XYZ is 5-5.25 and I have an order above the market at 8 and I get filled, I would not cover my short since this trade will probably be broken. If I don't hear from ISLAND within an hour, the trade will probably stand. This policy is not to be abused and I think the ISLD ECN's policy is fair.See ISLD Clearly Erroneous Policy at: http://www.island.com/subscriber/attachment_a.htm "RULES APPLICABLE TO ALL CLEARLY ERRONEOUS REQUESTS Only the disadvantaged party (as determined by Island), based on the market at the time the questioned trade was executed, may request that a trade be broken pursuant to the Island Clearly Erroneous Policy. Each request will be considered on a case by case basis. Once a request is filed, it cannot be withdrawn without the consent of both parties. " Stock Exchanges and other ECN's policies for erroneous trades may be different. As I have said before, check your orders before you send them. REDI+ and other EDAT software have a built in price check to prevent entering erroneous trades. Gene Weissman Lieber & Weissman Sec., L.L.C. gweissman@stocktrade.net
Honda why didn't you try to sell the calls after you knew the trade was busted. How far out of the bid/ask was it?
I sold the calls immediately after they broke the trade. Ended up breaking even minus commissions. I was pissed because I had a nice profit. They told me there was nothing I could do about it. If I remember correctly it may have occurred approx. .25 cents or less outside the best ask.
I've had several trades busted. I had one recently where I clicked on something completely by accident, and ended up shorting a $17 stock at $15. I contacted the broker (IB) and requested that the trade be busted, but the counter party wasn't obligated to comply because the price ($15) wasn't within 20% of the prevailing market. The counter party had the option of having the trade busted, or they could have agreed to a price that I set. (I could have said let's split the difference at $16, and it would have been up to them whether to accept this.) So if what IB tells me is correct, erroneous trades are automatically busted if 20% outside of prevailing market prices, and if not you're at the mercy of whoever is on the other side of the trade.
I had a limit order to sell as soon as I had a confirmation that I bought 5 calls. The price of the calls moved up, my sell price was hit & I then received confirmation that my calls were sold. A few minutes later my broker calls me and tells me the trade is broken
Honda Something doesn't sound right with what happened to your trade. I don't see how they could bust your trade when you had a limit order and it was hit. What exchange?
Don't remember, it was over 1 year ago. I questioned my broker & he reiterated there was nothing I could do about it!
No I didn't change. I've heard worse things happening with other brokers. This has only occurred once. I have been trading with Brown & Co. for alittle over 2 years.