I think you're on to something here. The possibility of waking up one morning to an open leveraged position I closed out the day before gives me the fucking shivers. I think the right policy moves money to square it up, but leaves the net positions where they were at the end of the day.
if anyone was doing something illegal, there is a court for that matter, Canceling trades isn't fair to most participant.
Any word on options traded during the time period? Ghost's idea is interesting and I would prefer it for my trading - has it been considered by exchanges? Any idea is a compromise though, and I'm sure that any stops that were hit below the cutoff prefer the current remedy rather than having sold at a negotiated low of the day.
Traders who shorted just before a stock felt 60%, and covered when it has felt more than 60% are now screwed - esp when the stock might recovered over 90% of the loss!! Same goes for those who long when it was 61 % down, showed it for some gains above 60% cut off. if they long trade is canceled, and when the stock is sold, that trade is considered valid. Now the stock has almost fully recovered by these traders are holding a net short position due to their long trade being canceled by the exchange.
I think this partial do-over is a response to delayed trade executions brought on by system overload. Oh man...we already had the burnt about to howl like singed cats, as the drop triggered stops but the instant re-flation left the losers out in the cold, now we have...no...not a complete do-over, cancelling gains and mitigating losses, but only a partial do-over. EVERYbody is going to be pissed. That's on TOP of the uncertainty due to Greek riots tomorrow. Will the exchanges even open tomorrow?
Any time you were trading in or near a market outlier event you've gotta stick around for the AH session so you can get out of a busted trade. IMHO, that's much safer than waiting for the next day.
Of course they prefer that in hindsight. But they chose to sell at the *market* - not at the price of their choosing. It is completely unfair that the people who sold at the worst prices - demanding liquidity at the worst possible time - get to avoid any losses, whilst the people who sold earlier get hosed, and worst still, the people who stepped up to the plate to buy get screwed and are not only out huge $$$ but are naked short from -59%. Imagine losing 59% of your capital in 30 minutes because you bought the low of the day when no one else provided liquidity - just because some pen pushing bureaucrat let a precious algo trader or I-bank desk monkey sweet talk him. The people who used stops and got bad fills? Fuck them, they caused this crash with their dumb trading. All I can say is I feel lucky that I actually read exchange regulations so I know i) what the bustout ranges are ii) to never close out a position that you got outside the bustout ranges, until they confirm at the exchange that it's not being busted. This is corrupt as fuck basically.