Logical has nothing to do with it. It's ILLEGAL. Are you going to tell me I had a $9 sell stop filled when the market is readjusted to a $10 low? Can't be done.
Guys, the problem is not that they busted the trades. There are legitimate reasons to bust trades and every one should know them - then all is fair because the rules were laid in advance. The problem in this case is that we still don't know and the regulators don't know IF these were erroneous trades, misprints, system breakdown or anything that would fall withing the guidelines for busting trades!?! If they knew and acted accordingly, then why investigate? If you had a sell stop order - you should know that it becomes a market order and if there are no bids you are screwed. You also know that if the last print was $17 and the next print is $0.17 - then this may be an erroneous trade and it may be busted. Everything is by the rules. But what really happened on May 6th ?!? Was it something you should expect or was it just "shit happens" but that's free market, therefore no busts...
You would think contract law would apply and they already have plenty of case law from sour grape parties. "I never would have entered into a transaction to sell 1000 shares of XYZ for $10 if I did not have reasonable belief I acquired and owned 1000 shares of XZY at 0.20. I placed my order for XYZ and received a fill confirmation from my licensed broker. At no time before these transactions took place was any notice provided that any trades were erroneous or otherwise suspect. I relied on the information provided by my licensed broker. This contract was made based on electronic offers and bids, transacted and cleared by independent parties that are licensed and regulated to deal in these securities. There is no fraud in the transaction or fraud in the inducement of the parties. There is no clerical error. The exchange has unilaterally decided to void one part of a series of related transactions. The Exchange declared their determination is final and unappealable. The voided transaction benefited the exchange and an exchange member and is illegal under NY Law XXXXX. I have no remedies available other than to sue the exchange for breach of contract and seek an award for punitive, consequential and liquidated damages. Their act was willful and without basis as no fraud has been alleged. The exchange has violated SEC Rule XXXX and under the state of NY xxxx I am entitled to treble damages + .... + Legal Fees and... These trade busts are for the favor of exchange members both parties are complicit of a RICO conspiracy. Obviously this is all fantasy but I am sure there are plenty of lawyers who have time and resources to explore all sorts of legal theories when an award would entitle them to their fees and the defendants have deep pockets. I imagine they would create a class action claim for all parties affected by these acts.
It doesn't change the fact that the rules are the way they are. Don't like them? Get them changed or don't play, but for god sakes quit bitching. And you know what? They ARE fair to most participants. The only people I see complaining are the ones that are ignorant. The only way your argument has any merit is if you brought it up when there was no market event that screwed you over.
Do you forget taking your medicine, or too much shit in your brain? how is that fair, someone can recoup lost due to mistake, and other can not. This is still democratic country, there are law protecting people who make legitimate complaints.
Yes it can. It is just as illegal as saying a trade never happened. If people can say trades didn't happen when they did, they can certainly modify prices on trades.
Welcome to the world of liquidity provision. That's why there was none that day and canceling trades this way will ensure even less the next time the market hiccups. One hiccup will turn into puking its guts out searching for a bid.
Your complaints aren't legitimate. Trades were busted according to pre-defined market rules. By using exchanges you agree to their rules. Period. End of story. If you don't like the rules, drive over to the seller's house/office and do the trade there.
By "pre-defined," you mean "we can make any percentage up and you have to eat sh*t and die if you don't like it."
Normally, I'd agree with you, but the exchanges got together in a big meeting AFTER THE FACT and decided at what level to bust trades. I'm not saying you're going to get anywhere suing or complaining, but it does set up an arbitrary and unfair market - something the SEC is meant to prevent. Of course, we all know that what the SEC does and its mission statement couldn't be further apart.