What if a market order is abandoned by the market maker?

A

algorithmic_rhythms

I typically trade leveraged ETFs and hold them anywhere from 250ms to 5 seconds. I put in a Market order this morning to sell 5000 shares of SQQQ on TD Ameritrade. The order was sent to Virtu and partially filled for about 2000 shares. The remaining 3000 shares were just hanging there. After about 60 seconds I tried to cancel the order but it was stuck in the system. I called ameritrade and after about 10 minutes they were able to resolve this and my unsold shares were returned to me. Ameritrade says this happens frequently with Virtu and that in the future I shouldn't try to cancel the order but just call them.

The thing is, an ETF like SQQQ can move a lot in 10 minutes. If I put a market order in I'm counting on instant execution. If the nasdaq moved up 2% in those 10 minutes I could have a loss of $10,000. Ameritrade told me that in the future if this happened and I didn't try to cancel the order, Virtu would be obligated to fill the order at the price at the time of the order, even if it was 10 minutes later. Does this sound legitimate to you guys? Does anyone have experience with a dark pool filling part of a market order and just deciding to keep the rest of the order in limbo and not fill it?
 
algorithmic_rhythms said:
Virtu would be obligated to fill the order at the price at the time of the order, even if it was 10 minutes later. Does this sound legitimate to you guys?
More...
No doesn’t sound legitimate. Most likely TDA screwed up and blaming others. You should use DMA brokers if execution quality is important.

PS nobody is obligated to you ever, you trade at your own risk
 
algorithmic_rhythms said:
I typically trade leveraged ETFs and hold them anywhere from 250ms to 5 seconds. I put in a Market order this morning to sell 5000 shares of SQQQ on TD Ameritrade. The order was sent to Virtu and partially filled for about 2000 shares. The remaining 3000 shares were just hanging there. After about 60 seconds I tried to cancel the order but it was stuck in the system. I called ameritrade and after about 10 minutes they were able to resolve this and my unsold shares were returned to me. Ameritrade says this happens frequently with Virtu and that in the future I shouldn't try to cancel the order but just call them.

The thing is, an ETF like SQQQ can move a lot in 10 minutes. If I put a market order in I'm counting on instant execution. If the nasdaq moved up 2% in those 10 minutes I could have a loss of $10,000. Ameritrade told me that in the future if this happened and I didn't try to cancel the order, Virtu would be obligated to fill the order at the price at the time of the order, even if it was 10 minutes later. Does this sound legitimate to you guys? Does anyone have experience with a dark pool filling part of a market order and just deciding to keep the rest of the order in limbo and not fill it?
More...

TDM is right. You should've just let the order stay there and eventually all of the order would be executed if it remained as a market order. You didn't need to cancel it. It's not like a limit order where when a price is no longer matching your limit price after a portion of your order is executed, any unexecuted portion of your order would be abandoned unless and until the price comes back. A market order is different. A market order means it's an order that is to be executed at whatever price that is there in the market atm. If 2000 shares were executed at one price, and then the price moved, then the rest of the 3000 shares should've been executed at the next price unless the trading is halted. As long as the trading is not halted, there should be prices there for it to be traded. I have had market orders to be stuck at being filled sure even with just regular exchanges but they eventually all get filled with slippages of course but they do get filled guaranteed. Sometimes it might be a matter of the system working out the kinks.
 
Last edited:
I had this happen to me once on an individual stock, and the fill was much worse than the ask at the time the order was submitted. I called and asked about it, and the broker checked and got the order filled at the ask when the order was submitted.
 
You must log in or register to reply here.
Back
Top