wrong trade

R

raf_bcn

Hi

Today I did a mistake placing and order. I was selling a box with a strike distance of 6 poits, 109/115.
I really don't know what happened but I ended selling that box for 2.90 I realized because the order was filled at the moment.
I don't know how that price went to my limit order as I don't remeber changing the limit price. And the mid price was aprox. 6 , and the bid ask was 3.20-9.30
So i sold a box for less than his fair value.

IB has told me that a trade can only be busted if it meets the exchanges' Obvious Error rule:
- The exchanges must be notified within 30 minutes of the trade. What I did.
- Additionally, the execution price needs to be a certain amount outside of the Bid / Ask at the time of the trade.

IB system is a restrictive system that shows warnings for a lot of circumstances. How is possible that the system doesn't warn a trader who is placing an order with a price that is
50% bellow the fair price ?

I don't want to know who took the other side of the trade.
 
Last year, I sold an option spread on the CME for a debit of 3.90 when I wanted to enter. A Credit of 3.90. I learned that the CME charges $1000 to investigate an obvious error. As the trade was a 1 lot, and he loss was less than $1000, and it did not meet their criteria for obvious error, I had to eat the loss. It happens.
 
raf_bcn said:
Hi

Today I did a mistake placing and order. I was selling a box with a strike distance of 6 poits, 109/115.
I really don't know what happened but I ended selling that box for 2.90 I realized because the order was filled at the moment.
I don't know how that price went to my limit order as I don't remeber changing the limit price. And the mid price was aprox. 6 , and the bid ask was 3.20-9.30
So i sold a box for less than his fair value.
More...



  • Bid/ask 3.20/9.30
  • And your fat finger limit order was to sell at $2.90?

Limit orders are your price or BETTER - should have been filled at $3.20.
IMO ....... $0.30 is no big deal.
 
raf_bcn said:
Hi

Today I did a mistake placing and order. I was selling a box with a strike distance of 6 poits, 109/115.
I really don't know what happened but I ended selling that box for 2.90 I realized because the order was filled at the moment.
I don't know how that price went to my limit order as I don't remeber changing the limit price. And the mid price was aprox. 6 , and the bid ask was 3.20-9.30
So i sold a box for less than his fair value.

IB has told me that a trade can only be busted if it meets the exchanges' Obvious Error rule:
- The exchanges must be notified within 30 minutes of the trade. What I did.
- Additionally, the execution price needs to be a certain amount outside of the Bid / Ask at the time of the trade.

IB system is a restrictive system that shows warnings for a lot of circumstances. How is possible that the system doesn't warn a trader who is placing an order with a price that is
50% bellow the fair price ?

I don't want to know who took the other side of the trade.
More...

I thought that looks like something that would happen with IB. Lo n behold it's IB!! Did you use Strategy Builder to enter the order? The Strategy Builder is not working properly in terms of showing prices. After you set up a combo, it shows the correct bid and ask price only on the top but then at the bottom where the price is highlighted, the price is wrong. So if you use the bottom price that's highlighted there to send the order, the price will be wrong. And also remember, if it's a credit spread, the price is in negative, so the price in ask would be lower than the bid without the negative sign.
 
OptionsOptionsOptions said:
Limit orders are your price or BETTER - should have been filled at $3.20.
More...

Sorry, but not accurate. As this is a spread, and sent to one of the 5 complex order books, the NBBO of the legs do not offer any protection on your spread order. At best your software might provide a warning.
 
Errors on behalf of the trader are definitely not a cost of doing business. It's a function of the inexperience or carelessness of a particular trader. Some traders do not have a single fat finger or trade entry error in 20 years, others mess up on every 10th trade.

truetype said:
I make mistakes like that on 1- 2% of my manually-entered orders. Such is life. A cost of doing business.
More...
 
Been there, done that but never as bad of a fat finger trade as this one.

I vaguely recall that many years ago I set up a price warning with IB's software where it flagged the trade if it was X percent away from current prices (you input X and it saves it). I don't know if it still exists in current software versions. Check the Help Index or call them.

IB's software can be finicky, even unstable. My latest problem is that occasionally, when I set up a combo order, I can't see the bid or ask unless I click each box. So either I do that or I have to do the math in my head. It's not the end of the world but sometimes, time is money. Perhaps one day the technology will catch up with the idea.
 
raf_bcn said:
Hi

IB has told me that a trade can only be busted if it meets the exchanges' Obvious Error rule:
- The exchanges must be notified within 30 minutes of the trade. What I did.
- Additionally, the execution price needs to be a certain amount outside of the Bid / Ask at the time of the trade.
More...

And good luck reporting that error in 30 min. It takes 30 min. just to reach a live person at IB over the phone.
 
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