Nasdaq Busts and my $11,000 story

Discussion in 'Order Execution' started by Htrader, Jun 17, 2005.

  1. Htrader

    Htrader Guest

    Update.

    You guys won't believe what actually happened with this trade. All my frustration with nasdaq has now been shifted to IB.

    This weekend, I did my research and noticed that IIJI was NOT part of the final stock list that nasdaq issued. According to the published alerts, there should have been no busts in that stock.

    So I called IB at 8:00am, right when they open, and spoke to a regular there, and that person informed me that the busts were real. He said he called nasdaq and confirmed everything, and that while IIJI was not on the final list of busted stocks, it was on a prior list. That answer still sounded kinda strange to me, but I assumed since he checked with nasdaq that it was good.

    So right after that conversation, I covered my 11k share short of IIJI at 7.05 in the premarket. That turned out be a lifesaver.

    Fast forward to 1pm, 5 HOURS later, I get another email from IB saying that those original busts were in fact INCORRECT. It turns out nasdaq didn't sent IB an actual list of all the trades to be busted. Rather, it sent a criteria of which trades should be busted. So based on that criteria, IB made its own decision of which trades to bust. And mine was busted...incorrectly. Why this didn't come up in my original conversation with them at 8am? I have no idea. Why did it take over 3 days for IB to realize its mistake? Who knows.

    I now am long 11k shares of IIJI at 7.05, which I promptly sell at 7.25. But IB makes another mistake in unbusting the original busts and gives me 3000 extra shares, so I have to call them, get put on hold for 5 minutes, and then correct that.

    End result is I made about 2k, since I bought at 7.05 and sold at 7.25, but the whole story is quite ridiculous.

    And I was very wrong in my original post to assume that I would get a fair and prompt response from my broker.
     
    #31     Jun 20, 2005
  2. Wow, that really does sound ridiculous. And you said you have a pretty large account with them- imagine how they treated the "average Joe".
     
    #32     Jun 20, 2005
  3. cable

    cable

    It's pretty pathetic. But the bright side is that the more they screw up, the more you make money -- IB seems to pick tops and bottoms better than Soros!
     
    #33     Jun 20, 2005
  4. Choad

    Choad

    What a huge and unmitigated cluster-f*ck this deal is!

    You made a little money, but I'd feel like going thru every single transaction, wrong information and screw up, and use the $2k to get a lawyer to write some letters demanding a clear accounting of what happened and to force IB into arbitration if they owe you anything.

    But this is just more hassle, i guess. I'd be mad as hell though...

    Good luck.

    C
     
    #34     Jun 20, 2005
  5. I told you over the weekend the bust was bogus. I would have called Nasdaq directly, given the absurd nature of the bust.

    Sounds like they might well have some nitwits over there on the IB desk.

    Hope Petterfy can get involved and clean out the incompetants before they cost IB some real money.
     
    #35     Jun 20, 2005
  6. ozzy

    ozzy

    This whole idea of trades being busted sounds ridiculous to me. Any one in favor of trade busting? If market makers have technical problems isn't that their problem?

    Thanks for the info (in advance)

    ozzy
     
    #36     Jun 20, 2005
  7. i had one that got caught up in this. threw a small bid out, just 4.2% below the prior days close. it came back and i dumped it for a point profit.

    5 hours later at 2:30 they told me they were busting part of the trade. this after the stock rose $2.50 from where i am now short from. not only did they take away the profits, but i now have a nice loss. someone else makes a mistake, and i lose money over it? very fair.
     
    #37     Jun 20, 2005
  8. My God!!

    This will not be good for IB's reputation.

    m

     
    #38     Jun 20, 2005
  9. Exactly. Now anyone can claim "technical error" to bust trades -- it's a scam. If their system fucks up and the trades aren't busted, then maybe next time they won't make the same mistake.
     
    #39     Jun 20, 2005
  10. sprstpd

    sprstpd

    It is supposed to protect people if they make typos accidentally. The rationale is that no one should lose all their money on a typo.

    If the busting procedures were followed to the letter, then I wouldn't have a problem with them. But there are no hard and true rules when it comes to busting and it has been my experience that big firms get preferential treatment in these cases.
     
    #40     Jun 20, 2005