Please Help - Etrade cost me $2,500 today

dave_liu · Jan 19, 2007

What you said is reasonable. However a question remains: if IB can do it right, why not Etrade?

Quote from BlueStreek:

i can tell you what happened, it happens 1 or twice at scottrade, but actually only in ah when you cancel a "bunch" of limit orders chasing price; that is the one thing good about scottrade, as i cancel a lot of orders when i trade.

but i have an account at fidelity, and they have direct trading access, which is sweet during regular hours, but once ah goes into affect, if you cancel an order after hours, many times you will have to call them on the phone to clear the trade out, it will say pending cancel, or something close to that, it isn`t anything conspiratorial, its just after hours, they don`t have either the same staff on hand, or the same connection with the books, or the same network up and running, all i know is if i plan on canceling an order ah with fidelity, i better have that telephone number dialed at the same time, they cancel without any problem during regular hours.

btw, my ib account hasn`t had this problem with canceled orders getting stuck either during regular or after hours trading.

it sucks b/c i don`t think ibm will get back to 100 for awhile as it has been an 80 dollar stock for the last 2 years, although it was 124.00 in like 2002. but it has been as low as 68-84.00 range for a long time before this recent breakout, and i would be surpised if they paid for your loss.

i think you should sell if it pops anytime in pre-market, as it will probably trade under 90 by 2 to 3 weeks time, just cut your losses, and move on, 2,500 is actually a rather cheap lesson learned in this business.
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tradermike88 · Jan 19, 2007

"Auto" means that they route the order to a market maker of their chioice. I made a big mistake doing this and will NEVER do it again. They looked at my trade dispute and offered me 10 free trades. They said that the reason I could not cancel the order for 20 minutes is that they give their market makers 20-25 minutes at the end of the day to report back if the order was filled or not. It must be nice to be in this situation as a market maker. My sell Order was at 99.65. So they could wait until earnings are released and if the price spikes up big fill the order or else wait 20 minutes and send back a cancellation to etrade so I can submit a new order. I told them I will cancel the account if they cannot offer me something better than 10 free trades and that I do over 1000 trades a year which would be worth over $7K to them, but they don't give a crap so I am out of luck and probably for the better will move these funds into my tradestation account. I will also never submit a "day" order again.

Mike

dave_liu · Jan 19, 2007

Never use a market order. Several times I used market order at Etrade, they filled my order with very bad price.

Quote from traderich:

I think we all have some horror stories to tell you about. Here is one of mine, which may shed some light on your likely outcome:

I placed 2 market orders before the market opened with 2 different firms: Brown and Company and Scottrade.

I wanted to see how each filled my order and what price I would get from each.

The stock I was interested in was EP. It had closed the day before at 7.10.

Brown and Co. filled my order for 3000 shares @ 7.10.
Scottrade filled my order for 3000 shares @ 7.90.

I was very surprised at the difference and called Scottrade to ask why such a high price on the fill. They said the stock gapped up and that is the best they could get it at, even though it was a market order on the open.

I said ok fine. The stock then went down to about 7.50 or so. I decided to sell off the 3000 shares I had gotten for 7.10 and take a .40/share profit or $1200 from Brown and Co. shares I got for cheap.

I then kept the other shares from Scottrade for the longer haul. EP closed the day at about 7.40.

When I got home that night from work, I had a message on my answering machine from Brown and Company saying that there was a mistake on the price I had bought the shares at. The message said I had actually bought the shares at 7.90, not 7.10 and that it was just a typo error.

I went balistic! I was pissed because instead of a $1200 gain, I had in fact just realized a $1200 loss!

I called Brown and Company and they said, "well you should have known that that price of 7.10 was just an honest mistake and I should have known that was a mistake because that price was so far off what any reasonable person would expect"

I was like ???what? The stock had closed at 7.10 the night before, so why would I think getting filled at 7.10 was so obsurd?

They said the only thing they could do was back out my sale at 7.50 but I would still have the shares @ 7.90. I realized of course all they were doing was buying the shares on the open market for me at 7.40 which I could have done anyways!

After that f*&& up, I dropped Brown and Company.

I have heard that I could have disputed it since I did get a confirmation of price and quantity of the trade, but I decided to just drop it and move on.

I was more pissed that they didn't email me or call me at my work number so I could at least try to figure out what to do during the day.

Live and learn I guess.

Good luck to you.
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stock777 · Jan 19, 2007

You say they claim 20 minutes of 'grace' on a limit order after the close? Sounds like pure horsecrap to me.

Can anyone confirm that this is the case or allowed by law?

If they tried to pull that on me , I'd pull my account and sue.

stock777 · Jan 19, 2007

wtf are you talking about?

did you read the ops posting or just looking for an excuse to pontificate?

Tums · Jan 19, 2007

Quote from stock777:

wtf are you talking about?

did you read the ops posting or just looking for an excuse to pontificate?
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you did that again?

tradermike88 · Jan 19, 2007

This was the exact response I got from them

"Trade Inquiry 221559066190 on order 108 to sell 500 shares of IBM has been reviewed. E*Trade Financial follows common industry practice to expire orders 20-25 minutes after the close of the market. This is done in the event that an order was executed but had a delay in the reporting. You may call us before the order is expired to request that we manually remove the order, but that is the responsibility of the customer. No adjustment is due on order 108, and we cannot offer any compensation for orders that were rejected correctly."

I just wish I knew this rule yesterday. It would have saved me a lot of money. What really pissed me off is that it took over 10 minutes for the customer service rep to look up my account when I called yesterday. If they had been quicker it would have saved me at least $1.5K. Well, I guess this is a very expensive lesson not to ever use etrade again and never place a "day" order. Just curious is this truly common industry practice to lock orders for 20-25 minutes after the market closes?

Mike

franco82 · Jan 19, 2007

ETRADE Financial ....

BE EXTRA PROTECTED

COMPLETE FRAUD PROTECTION ?
COMPLETE PAYMENT PROTECTION ??
COMPLETE PRIVACY PROTECTION ???

... NO COMPLETE TRADE PROTECTION !!!!!

Harold Balls · Jan 19, 2007

Why you place this trade in first place? Seems like very bad risk vrs reward. I hope you learned lesson that is valuable. Very sorry.

-Harry

Quote from tradermike88:

Hi,

I bought 500 shares of IBM about 5 minutes before the close at $99.45. I then placed an order using their "auto" ecn to sell these 500 shares at $99.65. I was trying to make a play on the volatility from the earnings release afterhours. A few minutes after the market closed I cancelled the order to sell the 500 shares at $99.65 because I wanted to make sure that INET was used as the ECN. I then tried submitting my INET sell order several times and it got rejected saying I did not own the shares to sell. I looked at my original order and it was frozen as pending to cancel. I tried to cancel it repeatedly and during that time the earnings came out. I tried cancelling it and repeatedly submitting sell orders, but it was frozen for about 10 minutes at this point. I then got called etrade in a panic and evenutally got throught to their trade desk. Finally, after being put on hold for 10 minutes the trade desk rep came on and said he had killed the original order so that I could now sell my shares. I said "are you kidding". My order has been frozen for 20 minutes & this cost me $2,500. He agreed that it was their fault that the order froze and I could not sell my shares for 20 minutes and said he would file a trade dispute. Has anyone had similar experiences? I am really upset about this situation and don't know how to proceed. They said they will get back to me in 24 hours. I am wondering what happens in these circumstances usually. Is it possible that the market maker who was given the order to sell my shares held off on cancelling it so they could fill it if the price shot up and leave me hung out to dry if it crashes?

Thanks,
Mike
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MarketMonk · Jan 19, 2007

Your doing a 1000 trades a year? How many shares at a time? That many trades sound like you are day trading more than swing trading. What are you paying in commissions on each trade?

Like I said earlier, you need to not only Google the terms I mentioned before, you need to ask each new prospective broker what happens to your order once you click the buy/sell button.

Sorry to say, but you really don't have any leg to stand on. I can tell you did not follow my advice from earlier and read up on how ETrade handles orders but are slowly picking up that knowledge.

ETrade and other brokers (that are not direct access) route all orders to market makers. It is in their best interest to obtain the stock at a better price and make a little extra. After all they have to kick back a little bit to the broker so to be able to pay for that order. Hence the term "payment for order flow".

Listen, we can list all of the pitfalls in this business but it wouldn't do any good. We each have to experience them in order to really learn from these errors.

Okay, you may have read it's best to go with a direct access broker, but you are looking at the cheap commissions and the features etc and felt that was the best deal for you. And it probably was, until you found out the one trade that can bite you in the butt. There are many others believe me (speaking as an ex ETrade customer).

Good luck finding a new broker should you determine that's in your best interest.

MM