Horror story

Discussion in 'Trading' started by cashmoney69, May 22, 2006.

  1. Today before the market opened, I placed a market order for RIO

    at 47.71. My analysis showed that RIO still had some room to

    grow and that this was a good price. I was confident in my

    research and clicked "buy".

    Market opens, and my stock instantly falls to 45.30, however my

    computer shows that I have an open order for RIO at 47.71,

    but no position. I was like "This cant be right, market orders get

    executed instantly". But just incase, I franticly tried to cancel the

    order before it could fall even lower (which it

    did). I couldn't find the cancel button, so I called my broker on

    speed dial and after a few minutes of talking, he figures out that

    I had a market order and that market orders cannot be canceled.

    As soon as I get off the phone, a box pops up and tells me that I

    just bought RIO at 45.30. I sold as quickly as I could at 45.29.

    If my order had gone through 47.71 , I would have lost all my

    gains from the day before and then some in just 2-3 minutes!.

    luckily I only lost commissions.

    ----

    Lesson learned

    1. Market orders cant be canceled

    2. NEVER buy before the open

    3. NEVER put too much faith in your analysis, no matter how good a set up looks.

    - nathan
     
  2. Ebo

    Ebo

    Why is this a "Horror Story"?

    I cancel Market orders all the time in equities, they can be canceled, generally before 9: 30.

    Wanna know an old trick, promise not to tell anybody, ok, If you have a market buy in @ the bell, and you wanna cancel, just enter a market sell if you are unable to cancel, just make sure you get it in before the bell.

    I am sure this is grey area as far as being on both sides of the market, I have more than one account.


    Happy Trading!

    PS : How can you have a "market" order with a limit, this is a tall tale!
     
  3. Bowgett

    Bowgett

    You're pretty new if this is your horror story. Be prepared for <i>much</i> worse and I am not kidding.
     
  4. pattersb

    pattersb Guest

    i find it incredible anyone would have considered buying a tech company at the open today...:confused:
     
  5. When it comes to markets, I don't think it is a good idea to place an entry order when the market is not open. Exit is a safer bet, but never entry. I believe that that is the main lesson here. :)
     
  6. like? :D

    - nathan