Market maker plays games.

Discussion in 'Order Execution' started by Option Trader, Mar 19, 2008.

  1. My trader partner placed an order to buy 1,000 shares of DRL at $18.90, of which 850 got filled at 15:59:15, just 45 seconds before the close, leaving an open order of 150 shares left. The rest of the order NEVER got filled, yet the stock somehow closed $.12 lower, at $18.78!! He contacted his broker, TD Ameritrade, and this was their response:

    " Thank you for choosing TD AMERITRADE as your brokerage firm. We are attempting to contact you regarding an order that was recently placed in your account.

    The market maker who received this order has informed us that the order was canceled.

    As noted in your Account Handbook "Orders are accepted subject to the rules and policies of the various exchanges and execution points." Since this order was canceled by the market center, TD AMERITRADE will not be re-entering it.

    Feel free to send a new order online at and we will route it to a different market destination. To have us re-enter the order for you, please call 800-669-3900 or 402-970-5805 to speak with a broker.

    Note: To be clear, TD AMERITRADE will NOT send a new order unless you contact us or send the order online yourself."

    Unbelieveable! The MM informs Td Ameritrade that the order is cancelled--not at the customer's request & not by the broker--so who did it? And it certainly seems they had an agenda!
  2. Most likely your order was automatically cancelled at the time the market was closed. In other words, your order was "good for the day." The "mysterious" lower closing of the stock is a different story.
  3. Nothing mysterious here - know the market you are trading on...

    That order was a "day order", so the rest quantity got canceled at 4:00pm (done for day). Later the specialist closed the stock with the sell imbalance by hitting the GTC orders on the bid side.
  4. Did you read what the OP wrote, or your brain (if you have one) is malfunctiong? The close was LOWER than the bid by the customer.
  5. Especially for you: his limit buy order was cancelled @ 4:00pm as being a day order, and the specialist closed the stock the stock a couple minutes later (as he usually does).

    Shall I repeat it for the third time?
  6. For DRL on March 19, I see the following open/high/low/close:

    15:59 18.91 19.05 18.90 18.90
    16:00 18.90 18.90 18.90 18.90
    16:03 18.78 18.78 18.78 18.78

    and no more trades until after 16:15, when presumably the specialist is gone for the day. An unfilled day order would be killed at 16:00.
  7. With a GTC order the remaining 150 probably would have been filled at the closing price...
    But you never know...
    Because, in reality, small odd lot orders have virtually no rights or status.
  8. 150 shares order is not an odd-lot per se, and it would definitely get a hit if it was GTC because of the NYSE priority/parity/yield rule.
  9. Nothing is "definite" with the NYSE. Virtually every "rule" can be:

    (1) exempted from under various conditions

    (2) simply ignored

    You have to understand the way the NYSE determines "compliance":

    The NYSE calculates the PERCENT of the time a firm complies with a "rule"...
    And usually something like 97% is "in compliance".

    That means that 3% of the time...
    A firm can chose to deliberately break a "rule"...
    But they will make sure they do it against someone with NO RECOURSE...
    Like a Customer of IB.
  10. An agenda on 150 f*king shares of a $19 stock!

    Your order stops working at 4pm, REGARDLESS of whether its day or GTC unless it's routed to an ECN. If it's a day order, it's obviously canceled then.

    The offending NYSE print could have been for any number of legitimate reasons, knock yourself out:
    #10     Mar 21, 2008