This reminds me of some weird situation involving a security maybe a year or two ago. I think it was APOL? Anyway, there were people who bought the security at a huge discount and then sold that security later for a big profit. But the security kept on rising and it turned out NASDAQ arbitrarily busted trades below a certain price. People sued because they were left short in their IRAs after the bust. I never heard whether their suits were successful, but I assume they were not.
IB : Cancellation of the open order, but not the closing one...
- Thread starter fredcom
- Start date
This reminds me of some weird situation involving a security maybe a year or two ago. I think it was APOL? Anyway, there were people who bought the security at a huge discount and then sold that security later for a big profit. But the security kept on rising and it turned out NASDAQ arbitrarily busted trades below a certain price. People sued because they were left short in their IRAs after the bust. I never heard whether their suits were successful, but I assume they were not.
So did you have any idea DNDN was halted when you put your order in? Because if you knew it was already halted, then you case becomes less convincing.
And finally, I am seeing on Nasdaq that DNDN was halted on 10/6/2008 from 6:59am. Resumption quote time was at 9:45am and resumption trade time was at 9:50am. That means you should be able to submit orders, but you shouldn't receive any fills during the 9:45am - 9:50am time. I don't know what happened, but either ARCA or IB is not implementing something correctly if they are reporting a fill to you during the resumption quote time. After looking at it this way, it seems like you might have somewhat of a case. But if you knew the stock was halted, didn't you think it was odd that you got a fill before 9:50am, which was when the stock was to be unhalted?
And finally, I am seeing on Nasdaq that DNDN was halted on 10/6/2008 from 6:59am. Resumption quote time was at 9:45am and resumption trade time was at 9:50am. That means you should be able to submit orders, but you shouldn't receive any fills during the 9:45am - 9:50am time. I don't know what happened, but either ARCA or IB is not implementing something correctly if they are reporting a fill to you during the resumption quote time. After looking at it this way, it seems like you might have somewhat of a case. But if you knew the stock was halted, didn't you think it was odd that you got a fill before 9:50am, which was when the stock was to be unhalted?
Fredcom, what was the outcome?
Arca has busted two trades on me in the last month. My fills were at reasonable prices, not the obviously bad ones Arca frequently posts (opens at 499.99, buys at .01). No other exchange has ever busted a trade on me.
Arca is a dangerous exchange. They have a much greater percentage of busts than NYSE or AMEX. In your case, it's quite possible that Arca didn't notify IB of the bust until after your sell had filled. If so then there's no was IB could know to cancel. On one of my trades I didn't get notified until the nightly confirmation report.
Arca is a dangerous exchange. They have a much greater percentage of busts than NYSE or AMEX. In your case, it's quite possible that Arca didn't notify IB of the bust until after your sell had filled. If so then there's no was IB could know to cancel. On one of my trades I didn't get notified until the nightly confirmation report.
This just sucks, but as others said there's really nothing you can do -- except avoid ARCA.
I was involved in a trade/bust on GLOBEX a few years ago in ER2 (old russell 2000 e-mini) where at 4:01 PM the sh*t hit GLOBEX and it spiked up from 637 to 656 in a few seconds, sending my account into a huge loss when my stop hit and was filled 13 points higher. GLOBEX busted my trade (thank goodness) and all trades above I think 643 but if you got the 642.9 print you were screwed (that was 6 points above the current price at that time). Again there would be nothing you can do.
It's a definite risk -- not much you can do about it though.
SSB
I was involved in a trade/bust on GLOBEX a few years ago in ER2 (old russell 2000 e-mini) where at 4:01 PM the sh*t hit GLOBEX and it spiked up from 637 to 656 in a few seconds, sending my account into a huge loss when my stop hit and was filled 13 points higher. GLOBEX busted my trade (thank goodness) and all trades above I think 643 but if you got the 642.9 print you were screwed (that was 6 points above the current price at that time). Again there would be nothing you can do.
It's a definite risk -- not much you can do about it though.
SSB
Hi,
To sum up.
I bought 2000 DNDN at 4.65$ , time 09:45.
I closed the position at 5.13$, time 09:50 --> profit = +960$
At time 10:05, my entry order is cancelled (busted) --> At this moment, the only order filed for the exchange is the Sell order --> DNDN quote is 7.11$ --> IB Account told me that I'm Short of 2000 DNDN at 5.13$ --> unrealized lost is -3960$.
At this point, I didn't understand the situation... Is IB Account fake me? Entry order really cancelled? I didn't know.
Few time later, I decided to exit the "short" position at 6.65$ --> Final lost -3040$.
I received a mail telling me that there was a regulatory halt by ARCA on DNDN for time 09:45 - 09:48.
Then I opened an inquiry ticket on IB message center to understand the situation and have some informations.
As usual, the IB answers was arrogant and dilatory.
As you probably noticed, I'm not fluent in english. For example, IB pinpointed details error and forgot to answer the main subject.
IB said "The trader must manage their risk as they see fit with their account in respect to the bust.".
I asked "how to manage the risk when a filled order is canceled after the closing position?".
IB said "The trader must manage their risk as they see fit with their account in respect to the bust."...
As the exchange was halted at time 09:45-09:48, I asked IB why they submitted my order during a regulatory halt.
IB said :"Trading halts are issued by the exchange, not by the brokerage firm. When you submit a trade during a trading halt, the exchange should reject the order. For whatever reason, the trade was not rejected during the halt, and that is why the trade was then busted by the exchange. " --> IB didn't answer.
So, I donât know what to do know.
I think that IB made a mistake when they submited the order to the exchange as it was during a regulatory halt.
But, as you see, IB didnât answer on this point and their responsability.
For the same situation in France, I could complain to the AMF (Financial market authority), but I donât know what to do in USA, asking the appropriate authority, asking a lawyer...
Finally, I lost a part on my confidence in the system. On this trade, I lost âonlyâ 30% (3000$) on the position. How much shall be the next, as there is no limit in a short position!!! And how much for you?
In fact, there is no answer to this question, and no way to manage the risk because the bust could happen AFTER the position is closed. Thatâs bad.
To not be misunderstood, I like IB platform, I like IB prices for orders, I like the community around IB.
But I absolutly dislike IB customers service (the present problem was not the first one).
I know that Iâm not a big trader as I only have about 4000$ of commissions by year, but is this a good reason for IB?
Iâm also a customer of DTNIQ (data provider). Every time I had a problem, they tried to check and resolve, trying to understand whatâs wrong with my configuration AND checking whatâs wrong with them. For IB, the customer is always wrong, thatâs all.
Grrrrrrrrrrrrrrrr
To sum up.
I bought 2000 DNDN at 4.65$ , time 09:45.
I closed the position at 5.13$, time 09:50 --> profit = +960$
At time 10:05, my entry order is cancelled (busted) --> At this moment, the only order filed for the exchange is the Sell order --> DNDN quote is 7.11$ --> IB Account told me that I'm Short of 2000 DNDN at 5.13$ --> unrealized lost is -3960$.
At this point, I didn't understand the situation... Is IB Account fake me? Entry order really cancelled? I didn't know.
Few time later, I decided to exit the "short" position at 6.65$ --> Final lost -3040$.
I received a mail telling me that there was a regulatory halt by ARCA on DNDN for time 09:45 - 09:48.
Then I opened an inquiry ticket on IB message center to understand the situation and have some informations.
As usual, the IB answers was arrogant and dilatory.
As you probably noticed, I'm not fluent in english. For example, IB pinpointed details error and forgot to answer the main subject.
IB said "The trader must manage their risk as they see fit with their account in respect to the bust.".
I asked "how to manage the risk when a filled order is canceled after the closing position?".
IB said "The trader must manage their risk as they see fit with their account in respect to the bust."...
As the exchange was halted at time 09:45-09:48, I asked IB why they submitted my order during a regulatory halt.
IB said :"Trading halts are issued by the exchange, not by the brokerage firm. When you submit a trade during a trading halt, the exchange should reject the order. For whatever reason, the trade was not rejected during the halt, and that is why the trade was then busted by the exchange. " --> IB didn't answer.
So, I donât know what to do know.
I think that IB made a mistake when they submited the order to the exchange as it was during a regulatory halt.
But, as you see, IB didnât answer on this point and their responsability.
For the same situation in France, I could complain to the AMF (Financial market authority), but I donât know what to do in USA, asking the appropriate authority, asking a lawyer...
Finally, I lost a part on my confidence in the system. On this trade, I lost âonlyâ 30% (3000$) on the position. How much shall be the next, as there is no limit in a short position!!! And how much for you?
In fact, there is no answer to this question, and no way to manage the risk because the bust could happen AFTER the position is closed. Thatâs bad.
To not be misunderstood, I like IB platform, I like IB prices for orders, I like the community around IB.
But I absolutly dislike IB customers service (the present problem was not the first one).
I know that Iâm not a big trader as I only have about 4000$ of commissions by year, but is this a good reason for IB?
Iâm also a customer of DTNIQ (data provider). Every time I had a problem, they tried to check and resolve, trying to understand whatâs wrong with my configuration AND checking whatâs wrong with them. For IB, the customer is always wrong, thatâs all.
Grrrrrrrrrrrrrrrr
I would say the ultimate party in the wrong here is ARCA as the exchange itself crossed this order even though DNDN was not trading. This must mean that IB just sends the order to the exchange and it is the exchange's responsibility to return an error if the security is halted. As for trying to get your money back from ARCA, it isn't going to happen, sorry to say.
