Nasdaq Busts and my $11,000 story

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

  1. Thanks for the reply from IB.

    The case of IIJI looked bad from the outset, as the stock was trading legitimately lower, and not part of a malfunction. There was no legitimate reason to bust those particular trades, which would have been apparent had t&s been examined.

    I have no problem with busts that are clearly at bad prices, as long as those are handled consistently.
     
    #61     Jun 21, 2005
  2. =======
    Interesting read, and while my first choice is not to make money on mistakes like that, that will work also.

    :cool:

    Also have noticed while IB does make mistakes , most actually favor me and dont know about 3 day timetable???

    And Wilburbear;
    got a somewhat funny, to me anyway,red message from IB past week ''AMEX not being able to trade OPTIONS DUE TO TEK DIFFICULTIES''
    At least IB sent the e-message!!!:cool:
     
    #62     Jun 21, 2005
  3. Bob111

    Bob111

    today, 06/23/2005 they still adjusting\bust their trades. i got bust on position,which already been adjusted on friday after close.unbelievable!
     
    #63     Jun 23, 2005
  4. So, your SuperSoes was busted an the ECN trades stood. Hmmmm......

    Evidently the ability to "hide" orders and "parse" orders under SuperSoes was not worth it, and the only way to have found this out was to have been at this disadvantaged $11,000 gain (which might possibly become a loss, should they deem it as an illegal short).

    Did you seek legal counsel and begin the process of moving your account to another broker? This might be the right circumstances and time to consider such a strategy. You were advised to escalate this, by one of the other commentators.

    I noticed IIJI move from below $5 and stabilize just under the $7 range. Once it achieved $7, I regretted not having taken a swing position, although I told myself, this was going to be a profitable ride. It peaked at and above $14. What surprised me was how fast it surrendered the $11.50 - $12.25 area on the way down, and almost in less than 1 week's trading days, was under the $8.50 range. Evidently you were caught up in that fiasco too.

    Thanks for letting others know about this, and sorry to have heard about your pain.





     
    #64     Jun 24, 2005
  5. Can someone here Please explain exactly what happen here ? What do they mean busted rule?

    Im lost in all this and trying to make simple heads and tales from this so that I dont make the same mistake.
     
    #65     Jun 24, 2005
  6. sprstpd

    sprstpd

    Here is an example of a bust:

    There is a buyer and a seller on a single trade. The buyer erroneously entered a price that was $1 higher than the current market (say on INET) and calls in to have the trade "busted." INET rules on whether the trade is "clearly erroneous." In this case, they say "bust the trade" and it is as if the trade never occurred.

    Now imagine this happening on a larger scale - some hedge fund erroneously puts in an order to buy 1 million shares, $10 higher than the market. They probably took out thousands of orders on the book with that order. They will call in to have all those trades busted (or most of them). Meanwhile, there is utter confusion and inevitably people close out the second part of their trades in the confusion. Then the busts come in and they are left holding the bag.
     
    #66     Jun 24, 2005
  7. So if you short a stock and then rebuy it and some one up above goes bust, they pretty much sc#ew your short sale latter on even though you never knew it?
     
    #67     Jun 24, 2005
  8. sprstpd

    sprstpd

    Exactly. So you thought you were flat with a profit, but now you are long shares. And the way it usually works is that by covering you have a loss on those long shares by the time the bust notification comes in.
     
    #68     Jun 25, 2005
  9. Is there any way to prevent this, and i dont mean a reply such as dont buy stock?
     
    #69     Jun 25, 2005
  10. Dustin

    Dustin

    There is no foolproof way to avoid this, but if you ever get a fill that seems too good to be true just don't close it out until a couple hours later. Sometimes I will wait an hour, then close half of the position and wait until just before the close for the rest.
     
    #70     Jun 25, 2005