IB should I accept bust

J

just21

IB called to say my Ebay trade before hours on Instinet of a buy of 100 shares for $54.00 was being disputed and would I accept a bust. I refused having sold 2000 at 53.50 the day before before hours to hedge some naked puts. The line to Instinet at Ib had been down and my order that was light blue was held on the IB server until the line went back up and was immediately filled. Apperently the trade is going to arbitration. Ebay was 55.00 after hours on friday, exactly at the strike price. Was 56.00 offered Monday morning so I went 54.00 bid. Would you accept the bust or go to arbitration? thanks for any advice, this is a new experience for me.
 
at $54 or below are busted ?

this data is from nasdaq.com
and might not be accurate

good luck .... I think if it is only 100 shares you should consider not going to arbitration .... I mean its only a $100-200 loss
if it is trading now between $55-$56

$ 52.51
$ 52.80
$ 53
$ 53.43
$ 53.70
$ 54
$ 54.06
 
I don`t think the contra will bother with arbitration. Especially over 100 little. Most times they just say that to "coax" you into busting the trade.
 
experience arbitration when not much is at stake. If you are a FT trader or trade a large account arbitration will probably be in your future anyway when the stakes are higher so just use this as a way to get to know the ropes.
 
forget it.

you signed the customer agreement.

arbitration is held at a location selected by the BD. so, prepare to visit them on their turf. can you fly for free?

your account will be closed at IB, they don't want "problem" customers
 
IB said it was away from the market but looking at the time and sales then another 1900 traded. That was the market. Probably large investment bank saying we're not going to trade with you (instinet) unless you bust the trade. Someone must have entered a market order by mistake. Wish I had put the order in for the whole 600 I was short after options expiration.

08.12 $ 55 563
08.10 $ 55.05 100
08.07 $ 55.19 600
08.07 $ 55.19 100
08.07 $ 55.18 200
08.00 $ 54.50 200
08.00 $ 52.51 100
08.00 $ 52.80 100
08.00 $ 53 100
08.00 $ 53.43 100
08.00 $ 53.70 500
08.00 $ 54 100
08.00 $ 54.06 1000
 
Quote from just21:

IB called to say my Ebay trade before hours on Instinet of a buy of 100 shares for $54.00 was being disputed and would I accept a bust. I refused having sold 2000 at 53.50 the day before before hours to hedge some naked puts. The line to Instinet at Ib had been down and my order that was light blue was held on the IB server until the line went back up and was immediately filled. Apperently the trade is going to arbitration. Ebay was 55.00 after hours on friday, exactly at the strike price. Was 56.00 offered Monday morning so I went 54.00 bid. Would you accept the bust or go to arbitration? thanks for any advice, this is a new experience for me.
More...

Hell no don't accept this bust. That is complete bull. Afterhours movement of this magnitude is not uncommon and that price is less than 2% off the previous close. The rule is 5% in afterhours trading is almost always bustable. Anything else is noise. Take the trade - do not bust.

Also, doesn't arbitration in this case just mean that Instinet will look at the trade and make a final ruling? Or do you mean they already made their ruling and you want to argue the point further?

My experience has been that Instinet will sometimes bust seemingly legitimate trades even though they shouldn't. I suspect that they do this to get on the good side of people who do a lot of business through them. Beware.
 
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