Charles Schwab StreetSmartEdge Oversold/Overselling Problem

[freeman311122]

If you ever used StreetSmartEdge, you probably already experienced this oversold/overselling problem. I would like to use this post to gather some statistics about this issue. Using StreetSmartEdge, you sell certain shares of a stock, before the confirmation comes back, you don’t see the stock sold, you submit the same order second time, and then a few seconds/minutes later, both sell orders go through, now you end up with a (naked) short position, people at Charles Schwab called this issue overselling the stocks you don’t have, it may cause you a trading violation thus a 90 days restriction shall be enforced. When you don’t have stocks and you click the sell button, a warning message box will pop up and you have to confirm what you are trying to do, but in the case of pending sell order, it seems to me that the system does not check if you have a pending sell order, they only check if you have enough shares which have not been sold, they just skip checking if a pending sell order is trying to sell the exact shares.

Have you experienced this issue? IRA, Roth IRA account? Did you just buy back the shares or call the customer service to resolve it?

Would you say this is a system bug or user error and why?

Have you been given a trading violation and restricted for 90 days, were you forgiven and the restriction got removed? For how many times？ I know the first whatever violation is always forgiven at Charles Schwab.

If you encountered loss because of this issue, did Charles Schwab compensate your loss?

Thank you so much, everyone!

 

[zdreg]

Your scenario doesn't make sense. Why did you enter the order twice?

 

[R1234]

Whenever I sell or cover a position on SSE I make sure there is the little 'O1' symbol on top of the order window to indicate there is an open order. Then I go to the order status to make sure there is a sell order in the system. That has never failed me so far. I have done thousands of sells on SSE with no issues.

 

[TradeTune]

Before Clicking sell for 2nd Time, On level II windows make sure the Position icon has disappeared ,,,if it still shows it's there why click sell again ?

 

[freeman311122]

Your scenario doesn't make sense. Why did you enter the order twice?

Whenever I sell or cover a position on SSE I make sure there is the little 'O1' symbol on top of the order window to indicate there is an open order. Then I go to the order status to make sure there is a sell order in the system. That has never failed me so far. I have done thousands of sells on SSE with no issues.

Understood, it is a good approach to prevent this issue from happening. But if users have to be so careful not to trigger this issue, in my opinion, it is a bug instead of a user mistake, don’t you agree? To SSE, the fix is quite simple, it only needs to check the user’s existing shares and all the pending sell orders to figure out how many shares remain to sell, pending sell orders are the ones already have been sent to the market venue and their confirmation has not come back yet, programmatically make a separate quota to maintain the number of the shares the user has, excluding the shares pending sell and lock the number before access it, update it and unlock it afterwards. I am surprised to see that Charles Schwab hasn’t fixed this issue since this popped up 6 months ago, and this issue is so severe that many customers could potentially lose lots of money because of it, and some already did.

 

[nursebee]

I've noticed very delayed executions, especially first hour trading in faster markets. Because I know about it I do not enter 2nd orders. I also cancel orders at times if price moves much beyond comfort.

 

[shatteredx]

I use SSE and have not encountered this problem. However, I do all my trading near EOD.

 

[zdreg]

Understood, it is a good approach to prevent this issue from happening. But if users have to be so careful not to trigger this issue, in my opinion, it is a bug instead of a user mistake, don’t you agree? To SSE, the fix is quite simple, it only needs to check the user’s existing shares and all the pending sell orders to figure out how many shares remain to sell, pending sell orders are the ones already have been sent to the market venue and their confirmation has not come back yet, programmatically make a separate quota to maintain the number of the shares the user has, excluding the shares pending sell and lock the number before access it, update it and unlock it afterwards. I am surprised to see that Charles Schwab hasn’t fixed this issue since this popped up 6 months ago, and this issue is so severe that many customers could potentially lose lots of money because of it, and some already did.

 

[zdreg]

" this issue since this popped up 6 months ago, and this issue is so severe that many customers could potentially lose lots of money because of it, and some already did.'
re:assumptions 1.you probably are saying that you 1st noticed the issue six months ago Likely the issue is much longer. . 2. you have no idea if lots of money was lost as a result. 3. unless you are a programmer with extensive experience. you cannot assume a fix is simple 4. management decides the priority of a fix.

No platform is perfect. Instead looking to place blame that it is a bug or user error, you should have been been asking for workarounds.

 

[freeman311122]

" this issue since this popped up 6 months ago, and this issue is so severe that many customers could potentially lose lots of money because of it, and some already did.'
re:assumptions 1.you probably are saying that you 1st noticed the issue six months ago Likely the issue is much longer. . 2. you have no idea if lots of money was lost as a result. 3. unless you are a programmer with extensive experience. you cannot assume a fix is simple 4. management decides the priority of a fix.

No platform is perfect. Instead looking to place blame that it is a bug or user error, you should have been been asking for workarounds.

I am not blaming anyone, as I said previously, I am trying to gather statistics, please kindly don’t put your words in my mouth, thank you very much! And you have a nice day and happy weekend!