Was trade execution illegal or just unethical?

In your original post you said there was no stock movement.

Yours was the stock movement.


Quote from Huron678:

On 5/3, CBRX closed at 0.73. I placed a limit order with Ameritrade after hours to sell CBRX if and when it dropped to 0.65. My order went through for 0.65 at 8am the next morning. I am unaware of other orders executing at that time. CBRX then opened at 9:40 at 0.75 where it had closed the day before.

Ameritrade replied "Your limit order was executed immediately because the then-current market price was better than your limit price. If the Limit price is better than the current market price the order may seek immediate execution. Market makers may reject, at their own discretion, any limit order with a price placed considerably better than the current market price as an out-of-range order.
You may have intended to place a Stop Market or Stop Limit order. For + Extended Hours orders, stops are not able to be placed. Only unconditional limit orders are accepted."
More...
 
Huron, from the information you provided you just used the wrong order type. You placed a sell limit order below the current market price and were executed. Limits execute at or better than the price you entered (for a sell order 0.75 is better than 0.65 hence the execution). You needed to place either a stop market or stop limit order. Unless there is some other information not listed here, the broker simply executed the trade as instructed.
 
Quote from Bob111:

legal. unethical? there is no such word in this business.
More...

There are no laws, regulations, or "ethics"...
That apply to retail orders in 2012...
Retail is nothing more than cannon fodder for Wall Street.

Yeah, you can technically find regulations one might think apply...
But it's all just Kabuki Theatre...
There are endless "exemptions"...
That encourage indiscriminate pounding of your Back Orfice.

That's why you have to understand how to limit your profile...
And why your Profit Margins MUST be at a certain level...
I would say at least > 30-40%...
So you can absorb the inevitable cheating.
 
If you place a limit sell order at a price below the current best bid and the market is open, you're entitled to be filled at the current best bid (if there are enough shares there). Note that the bid can be 5 or 10 cents below the last trade price.

If your limit sell order price is higher than the best bid, you might get filled at your price, or you might not get filled at all.

The stock you traded has a pretty wide bid/ask spread outside of regular trading hours. On 5/4, prior to 8AM (which is when Ameritrade customers can start trading), the bid/ask was .631 x .84. At 8AM, one or more limit orders for .65 appeared, and got filled. I see one trade for 9900 and one for 1600.
 
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