NITE stop triggered in error, what can one do?

M

Mike805

I was reviewing my execution logs for today and noticed something that at first didn't disturb me until I took some time to investigate:

I accumulated shares short of FRNT and placed a stop with NITE for exit full at market 8.41 at 14:23:49. I got stopped out and filled at 8.40 at 14:53:19. I do not see any tick data that shows a tick or last sale at 8.41 during that time period.

Regardless, the short moved in my direction after the stop out. Cost me quite a bit of change...

Is there anything that can be done about this or should I just chalk it up to a cost of doing business?

Mike

P.S. I use NITE for market stops because they don't charge for taking liquidity.
 
It could be your data provider. I remember one day when ES was moving extra fast, and I got filled on a short cover three or four ticks lower that my data provider said ES went to. I checked with some friends in a chat room, and they confirmed that ES had indeed hit that low (and beyond) so I knew my fill was good.
 
NITE is notorious for the most exteme abuses in executing equity orders. They have an extensive history of litigation and enforcement actions against them for what can only fairly be described as outright theft and fraud in the course of executing equity orders. Tgregg's example from trading ES, a futures contract traded in a vastly different way than equities, is not relevant to your particular situation in trading equities. You should, as a trader, know enough about order execution to know that leaving a stop with NITE is granting them a license to steal. Don't put a piece of meat in front of a dog, if you don't want him to eat it. Perhaps this particular case involved your data provider; and you can answer that question by checking official time and sales. But it doesn't matter what happened this time. You should never leave a stop with NITE. You should get an account with a reputable broker, like Interactive Brokers, who will electronically simulate a stop order without stealing from you, and will electronically execute it when the stop or conditions you specify trigger or occur.
 
Quote from jimrockford:

NITE is notorious for the most extreme abuses in executing equity orders. They have an extensive history of litigation and enforcement actions against them for what can only fairly be described as outright theft and fraud in the course of executing equity orders. Tgregg's example from trading ES, a futures contract traded in a vastly different way than equities, is not relevant to your particular situation in trading equities. You should, as a trader, know enough about order execution to know that leaving a stop with NITE is granting them a license to steal. Don't put a piece of meat in front of a dog, if you don't want him to eat it. Perhaps this particular case involved your data provider; and you can answer that question by checking official time and sales. But it doesn't matter what happened this time. You should never leave a stop with NITE. You should get an account with a reputable broker, like Interactive Brokers, who will electronically simulate a stop order without stealing from you, and will electronically execute it when the stop or conditions you specify trigger or occur.
More...

Jim,

Thanks for telling me what I needed to hear. I honestly thought NITE had changed their ways (naive ehh..). I've read about their bullshit in journals and took the recent opinion that they cannot get away with it anymore and hence won't do it.

NITE just recently got offered as a route with my firm. I've only been using them on and off for about 2-3 months. I mainly been using them in slower markets and in such cases up till now noticed fairly good execution - the main attraction of course being the saving of ECN fees. This time, however, I just cannot let this go so easily mainly due to the size involved. I do take full responsibility for not watching my stops.

I use a reputable broker that does what you mention - BRUT and ARCA are my main routes which are very reliable. Never once have I noticed inconsistencies with these electronic routes.

I believe everyone should be made aware of this information about NITE - they have not changed their practices and should not be used for automated stops.

TGregg,

Do you have a source for historical time and sales for stocks?
 
Quote from Mike805:

TGregg,

Do you have a source for historical time and sales for stocks?
More...

Sure I can check it for you, provided the stock isn't some weirdo OTC thing or worse. I'm not on my trading computer, so I'll have to remember to check it when I'm back in the game. Unless somebody else can check it meanwhile.

I shoulda thought to check it out when I first posted. Duh.

I'm terrible at remembering to do stuff like this, send me a PM on Monday, and I'll go "Oh yeah" and run it for ya.

And what jimrockford said could well be true. I've never used NITE, nor heard anything about `em other than stupid commercials about "Where the trade gets lost" or whatever it was.
 
Yikes. Here's a Yahoo Chart that suggests that if the facts as presented are correct, NITE may have screwed a customer out of a swell trade.

<IMG SRC=http://www.elitetrader.com/vb/attachment.php?s=&postid=876170>
 

Attachments

TGregg,

Thanks for posting that chart - that data matches my data feed as well as other data feeds I have looked at.

I have attached an execution log and a pending order log. Case in point - NITE can go f--k themselves.
 
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