There are specific rules for busts, right? How much discretion do the exchanges really have? I have only dealt with CME (thru IB) on busts and they have been great about it. One of my busts was when the market was 2.50 - 3.00 and I entered an order for $8 (should have been a call but I entered a put). I soon realized I didn't have the right contracts in my account and noticed I entered it wrong. At that point, before checking the confirmation, I thought the order would have just gone off at the ask and I just had to eat the spread, no problem. It actually went off at $8. The CME claimed to be dumbfounded about how that order could even execute with all those orders at $3, 3.25, 3.50 etc... and they promptly busted it. Point being, there is something seriously wrong with the "system" when I can fat finger an order like that and someone waaaayyyyy back in the line can get filled ahead of all the others. A bust is the only way to rectify that. If I had been filled at $3, I wouldn't have called and asked for the bust. Paying the spread would have been the cost of my mistake and I would have happily paid it. IB's only role is to call the exchange and ask for it on my behalf, which they did. IB doesn't want to have to take the time to deal with all the admin crap that goes with a bust. No broker wants that headache.
The IB order system is self verifying. When you click buy / sell the order line displays the actual order and color coded, I have made my fair shares of errors, but asking for yet another screen is only a crutch for hasty and sloppy trading, I the good old days, soes traders had 1 key fills with no verify of any kind for a default size of 1000 shares, ' The watcher guys were too lazy to implement a check screen, and wanted thier traders to use full concentration and not rely on second chance backout screens.
"I think IB could be inserting cash on an hourly basis in some of your accounts and you'd still be bitching." I'd like to see them try!
Don, I understand and actually would prefer if brokers took more of the risk. I guess over time I have been conditioned myself to blame no one but myself.... because in the end, I am the only one who really cares about my money. If a storm hits my area and I lose money I blame myself as I should have had a back up way to enter or exit positions, cell phone, agp power source. It's not the storms fault nor the brokers. It is a risk factor I should have been prepared for. If us markets are closed due to terror attack I should have set up a protocol that I would quickly follow to be able to hedge myself somehow, someway in a foreign market that is open at the time. This should at least curtail my losses somewhat. I actually don't have anything set up as of yet so should anything really happen I have no one to blame but myself. Yes I can blame osama and I can blame the feds or the cia for not stopping the attack but in the end, nothing will give me my money back. I knew it was s a risk and should have had a plan . My new years resolution is to actually set something up. I can go on and on but I'm sure you get my point. Right or wrong, things happen and it's our job to protect our money from risk so that we can actually survive and stay in the game. Merry Christmas ... Nick
Of course it is "our job" to protect our money. and to be aware that busting is a risk. But it's also part of our job to minimize these risks and opposing the current unfair busting policy is consistent with that philosophy. Anyway I am not saying that busts should not be allowed, I'm saying that a more balanced solution is needed. One answer is to simply re-fill the order at the original fair price. The current busting policy is way too one sided and does not punish the party who made the mistake. It makes no sense to punish the good guy. Merry Christmas Don
I have never dealt with the CME, only through ECNs. They show clear busting policies on their websites but hedge these rules by saying that the final ruling comes down to discretion by the ECN. It is my experience that it is random whether they decide to follow the stated rules or not.
How are they going to liquadate accounts as they move to pit trading? Does this increase the risk for IB account holders?
I agree about re-fillling the order at the original fair price. I don't know why this isn't being done. Nick
Quote from jficquette: IB could solve a lot of problems by requiring orders to be verified before going live. The only reason I can see for IB to refuse to do this is because now they make commissions off of bad trades and if they eliminated those then they would lose money. You've made this feature suggestion repeatedly, and it's always followed by a similar stupid allegation of wrongdoing. The allegation makes no sense, as the number of erroneous orders must be very small, and could hardly be expected to make any significant difference in IB's income. I expect the vast majority of trades come from professionals and order-entry systems that make very few (if any mistakes). Nobody else in this thread (or elsewhere, to my recollection) wants this feature. I can even recall, during the evolution of another broker's platform, which had such a feature, strong sentiment that such a feature be taken out, or be made optional. All that aside, you must be remarkably inexperienced to think that this approach will get you anything.