Please explain busted trades

Discussion in 'Retail Brokers' started by Briand7035, Jul 11, 2002.

  1. You are absolutely entitled to that trade. That print stands. Tell your broker that the contra party should go to isld and pay them their fee to research it to determine if it needs to be busted.

    Since it was after hours and only .50 out of the market you case is made even stronger. Do not let some bad broker tell you to break that trade.
     
    #11     Jul 11, 2002
  2. Since it was after hours and only .50 out of the market you case is made even stronger. Do not let some bad broker tell you to break that trade

    they don't ask you they tell you it will be broken.i had one broken for 20cents the other day.
    another question.has anyone ever gotten bust fees from ib when they break a trade.the told me they absorb it both ways so dont pay us.
     
    #12     Jul 11, 2002
  3. Doesn't sound right. Why did you let this stand without rasing holy hell? In other words, if they busted your good trade, they MUST bust the bad one, else you have grounds for a lawsuit, and should complain to Nasdaq and the SEC.

    If no one fights the bastards, we all lose.
     
    #13     Jul 11, 2002
  4. Yes, it wasn't right - I was in disbelief at the time. Note that I wouldn't be upset if the busts were treated consistently. I did everything I could to point out the problem to as many people at IB as possible. IB's response was that they have very little control over the busting process - they tried to bust but it was ultimately Instinet's decision. I did raise hell, but to no avail. I did not complain to the Nasdaq or the SEC, however. This example is not the only case where there has been a double standard in terms of busts. It is just the most glaring example. I've resigned myself to the fact that the busting process is not a fair shake, and I trade more cautiously because of it. Besides, I only have my stupid self to blame for losing those 10 points. It is just the lack of equal treatment that is irritating.

    Carl
     
    #14     Jul 12, 2002
  5. here are instinet rules:

    Instinet Rules and Procedures on Clearly Erroneous Transactions Executed through the Real-Time Trading Service

    I. Trades Executed Through the Real-time Trading Service

    To maintain the integrity of the Real-Time Trading Service ("RTTS"), Instinet reserves the right, to be exercised in Instinet's sole discretion, to modify the terms of or to cancel transactions executed through the RTTS that Instinet determines to be the product of clearly erroneous orders placed by an Instinet subscriber into the RTTS. Instinet Subscribers' use of the RTTS constitutes an executory acceptance of Instinet's right to modify or to cancel such transaction in accordance with the rules and procedures contained herein.

    II. Clearly Erroneous Trades

    If a Subscriber clearly erred in its entry of an order into the RTTS and such order is executed in whole or in part, such Subscriber may request Instinet to exercise its right to modify or cancel such transaction. The Subscriber making this request must demonstrate to Instinet's satisfaction that its entry of the order or any term thereof, such as price, quantity or identify of security, involved an unintentional and clear error. An example of an unintentional and clear error in order entry could include, among other things, entering an order to buy a stock at a price of 100, while intending to place an order to buy at 10. In the event that Instinet determines in its sole discretion and upon such information that Instinet deems adequate, that a material term of such order was clearly erroneous as entered, Instinet may modify or cancel any resultant transaction.

    III. Notification of Clear Error

    Subscriber must notify the Instinet Transaction Desk of any trade which the Subscriber believes was the result of a clearly erroneous order entered by such Subscriber as soon as possible, but in no event more than 30 minutes after the execution of the transaction at issue. Subscriber must provide Instinet with a description of the relevant details and other information substantiating Subscriber's claim that it has entered the order unintentionally and in clear error. Subscriber should also reference these rules and procedures and specify what action they are requesting Instinet to take. This notification may be provided orally.

    Instinet may consider, in its sole discretion and on a case by case basis, requests received after such time period, depending on the facts and circumstances surrounding such request. Once made, Subscriber can not withdraw its request to Instinet made pursuant hereto without the consent of all parties to the transaction.

    Instinet will attempt to render a final decision within one hour of receiving such description. In all cases, however, Instinet will make a final decision prior to the opening of trading on the relevant exchange on the next business day after receipt of the request. Instinet shall promptly provide oral notification of such decision to the parties involved in the transaction at issue.

    IV. Trades Executed Via SelectNet

    Subscriber's orders executed against a non-subscriber's order through the SelectNet linkage are subject to review pursuant to the NASD Clearly Erroneous Transaction Policy, set forth in NASDR Rule 11890 (see also NASD Notice-to-Members 99-29). Under its rules, the NASD has the authority to declare null and void or otherwise modify the terms of any transaction it finds to be clearly erroneous.

    Upon receipt of initial notification from a Subscriber of a claimed clearly erroneous order, Instinet will notify the Subscriber if such order was executed in whole or in part against an order entered into the RTTS through the SelectNet linkage. At the Subscriber's request, Instinet will forward to Nasdaq Market Operations the Subscriber's complaint in accordance with NASDR Rule 11890. It is Subscriber's sole responsibility to provide Instinet on a timely basis, but in no event more than 15 minutes after the execution of the transaction at issue, all information required under NASDR Rule 11890.

    In the event Instinet receives notice from Nasdaq Market Operations that a complaint has been raised pursuant to Rule 11890 with respect to an order entered into the RTTS through the SelectNet linkage, any Subscriber which executed such order in whole or in part agrees to cooperate with Instinet in providing any pertinent information to Nasdaq Market Operations with respect to such transaction, and further agrees to accept any final modification or cancellation ruling by Nasdaq Market Operations to the extent such ruling has an impact on Subscriber's order.

    V. Transaction Reviews Initiated by Instinet

    In the event of an RTTS system malfunction that effects the terms of Subscribers orders, Instinet in its sole discretion, may declare transactions resulting from such effected altered orders to be clearly erroneous hereunder, and may either modify or cancel such transactions. Except in extraordinary circumstances, Instinet will exercise its discretion to modify or cancel in whole or in part any transaction rendered clearly erroneous due to any such system malfunction by 6 p.m. of the business day following such malfunction
     
    #15     Jul 12, 2002
  6. janko

    janko

    what about busted trades on teh minies particulary on the dow $2 contract, there is very little liquidity and the spreads are kinda large, thus the other day i got filled at 8651 and immediately sold at 8746 about 90 point swing, then later the phone rings and the trade is busted. Ok it was out of the range but come on,if there is no liquidity how do you define what is out of the trading range???
     
    #16     Jul 12, 2002
  7. It seems to me that some times trades that are not in your favor dont get busted only that ones that are in the money get busted...They have 30 minutes to bust the trade....
     
    #17     Jul 12, 2002
  8. janko

    janko

    yeah but i guess i dont understand what they mean by out of the trading range when i was the highest bid even if there was a spread of 50+ points?!?!?!
     
    #18     Jul 12, 2002
  9. funny how they bust retail trades for 100sh because they are outside of the market, but do you think they're going to bust the WCOM trades that WCOM execs made based on insider info? nope. do they give a shit about the people who were on the other side of the WCOM exec's sell orders? nope.

    welcome to the machine.
     
    #19     Jul 12, 2002
  10. janko

    janko

    WTF!!!!!!!! i have no idea what ib did, but damn i just realizied they only canceled one side of the trade!!! is that possible??? i just covered short that i didnt even know about!!! arent they supposed to bust the entire trade or just that one print that was out of line- never mind i guess now that im writing this i see that its just one part of it. Well this sucks, certainly cost me a penny today. damn.
     
    #20     Jul 12, 2002