What the heck is a canceled trade

Discussion in 'Order Execution' started by tradeavenger, Nov 16, 2011.

  1. and how do i get it a day later and on a good trade too. My broker says it's the exchange, there is nothing i can do. True?
  2. Bob111


    nah..broker is trying to rip you off...tell them to fuck off and put the shares back on your account

    call to exchange and tell them same.. or put them both on intercom to save yourself some time.. :p
  3. Bob111


  4. Guess i'll let this one slide but one more shit and i wouldn't trade again until it got straightened out. Thanks for the response.
  5. Occam


    Could be true. The broker probably should have let you know sooner, but I'm not sure they're under any legal obligation to do so.

    In some cases you can appeal these sorts of things to the exchange, but it's generally not worth it, as there's also a charge of something like $1000 for a failed appeal.

    Sometimes trades are "busted" under "clearly erroneous" type policies -- here's an example of how this works:


    You have my sympathy, in any event -- this sort of thing is annoying.
  6. Bob111


    couple days is nothing..i remember few years ago they are busting the trades WEEK+ after execution. i remember cases where exchange busting the trades when price is moved already not in the favor of the guy who made that trade. like you bought it @ -10% then it was busted,when it's trades @ -15% go figure..:p
  7. It's a terrible practice. It is absurd to bust a trade and not offer to bust subsequent downstream trades. It also has the unintended consequence of drying up liquidity on stocks that are getting pounded because nobody wants to take the risk of getting caught on the opposite side.

    I am bitter and resentful about it, and I have never even been burned by a busted trade!
  8. Occam


    I think it made sense under the old specialist system -- they probably wouldn't bust a trade if it would bankrupt the specialist, obviously -- but in the electronic era where there are potentially millions of different counterparties, it's often very unfair; some small traders had their accounts completely wiped out, and then some, on the May 6 flash crash due to only one side of their round-trip trade getting busted.

    The exchanges/SEC should move towards a system whereby trades are always permanent, barring some outrageous bug in the exchange matching engine itself. As far as eliminating "clearly erroneous" trades is concerned, I think that a much better way would be to simply not match trades that would fall too far out of the recent range, and (very temporarily) halt stocks when they get too volatile, as is the present regulatory trend anyway.