Please help to clarify this (odd lot trade not filled)

Discussion in 'Order Execution' started by torel, Apr 30, 2007.

  1. torel


    I placed a limit order SELL@86.95 on my 36 WCG shares today right after market open.

    The stock got halted after 12:30 and rose directly after resumption to reach the daily high 87.00 (see attached T&S)

    My order has not been filled despite the fact that there were many transactions between 86.95 and 87.00 (the best bid price didn't reach 86.95 though).

    Is this because of the odd lot order? What order precedence rule applies for odd lots?

  2. torel


  3. hughb


    I had the same thing happen to me on an Amex stock. I had a buy stop just above the current offer and it went right through it with no fill. I googled "American Exchange odd lot stop orders" and found some info, but nothing very clear. Since it was an odd lot I was too embarrased to complain to my broker. I just assume the specialists ignore them.
  4. pdwst33


    Don't be embarassed in challenging your broker for a fill on this. You deserve one, and you're exactly right, the specialists/market makers tend to ignore odd lot and smaller orders in general. They are typically watching a number of stocks, and your small orders are just on the bottom of the list of priorities. Also, the systems that specs on floors like the Amex and PHLX use are so archaic it's a joke. Smaller orders can literally be LOST on them, quite easily (I've used them before and was in such a position). Many times, if the customer is not actively watching the daily highs and lows for their stocks in a given day, they will not receive fills when they are in fact due. At least call your broker and tell them to look at TAS (Time and Sales) and explain that you believe you are due a fill. Don't let them say something about the fact that it is an oddlot. I've noticed brokers like to make up rules to protect them from orders that should have been executed that they may have to make good on. Don't let too much time pass though before you contact them.
  5. torel


    Thx for the encouraging help.

    I contacted my broker immediately and I received this answer from them:

    The problem here is that you are entering an odd lot order and odd lot orders are not posted to the tape therefore someone will have to buy from you or sell to you at your price and quantity and if no one does this then the order will not get executed. You may even have the same problem with a market order. The best suggestion I have for you is to enter a GTC limit order and have some patience.

    Can I let my broker investigate whether the specialist wrongfully ignored my order? Can I "force" the exchange to fill the order at the limit price I had originally set?
  6. pdwst33


    I don't like his reasoning/response at all. But I can't say that it surprises me. I can't say with 100% certainty that you are due since it is an oddlot order, but I would pursue it. I know for a fact that if it was an over 100 share order you have a bulletproof case. Take this example of mine from about 2 yrs ago:

    I had a limit order to buy 200 MMR at 16.08 (very thin, illiquid NYSE stock). The stock prints at 16.08, 16.03, 16.00 and 15.98, and immediately trades higher. In fact, it finished the day near $17.00. I never got filled despite the fact that thousands of shares printed at my price or better. Here's a strategy I suggest...
    wait all day to make a call to your broker. If the stock finished at say $15.50, did I really want to buy it at $16.08? Of course not. But you'd better believe I'm calling if its in my favor. They gave me the runaround for 2 days while "researching the problem" and initially tried to dismiss me with ridiculous reasoning about my order being posted on an ECN and the stock that traded at my price or better was on the NYSE. Don't let them use silly reasoning like this, it's not legal. They are simply trying to cover their a--es because they will have to make good on the trade out of their error account. I've seen this time and time again, limit orders, oddlots and just small orders in general get "lost" in the system...and are often much worse in the case of Amex/NYSE stocks as opposed to Nasdaq. Ask your broker what's reasonable then? What if the stock traded through your price by $1!? Would that still not execute simply because this is an oddlot? Tell him that the fact that oddlots don't print on the tape has NOTHING to do with it, elevate to the Prinicipal/Supervisor if necessary. Tell him you believe the order was lost/overlooked on the spec's book, etc. Keep fighting this! You shouldn't lose money on this, it's their negligence.
  7. torel


    Thanks a lot. I need exact regulatory infos to be able to argue.

    Any good documentation on differences between handling odd lots and round lots? (I only found NYSE regulation until now)
  8. rayl


    I can't cite chapter and verse on this, but regardless of odd lot or not, I believe the specialist doesn't have to fill you unless he buys past your limit for a customer or at your limit for his account.

    Odd lots also get no visibility, so no one other than the specialist (or the MM if it's a NASDAQ issue routed to Knight) sees your order. Actually this stmt should be stronger bec certain exchanges have size rules, so for example, (these #s may not be exactly right -- I didn't look them up), for NASDAQ stocks betw $1 & $10, the minimum quotation size in the national book is 500 shares. Limit orders which do not meet the minimum quotation size are not protected by limit order protection rules.

    I've had experiences on the other side -- some seller dumping < 100 shares of some thinly traded stock on me when I have a buy limit posted to an ECN well below the current market price (I mean well below, like 10+% below) bec no one else would give the seller a fill I guess. I don't appreciate getting 10 shares of a $3 stock when I want to buy 300 shares, even at a 10+% discount, but, that's a risk when choosing to route to an ECN to insure visibility.