What Datek Giveth, NASDAQ Taketh Away:
Yesterday, as a speculative day trade, I placed an order for 5000 shares of STLC with a limit price of 1/32. (This company had just announced it may go belly up and that its stock is about to be delisted by NASDAQ, so it tanked on extremely high volume.). At 10:00 a.m. when I placed the order, the bid was 1/32, ask 1/16.
A few hours later, at 3:00 p.m. when the bid was 3/32x1/8, all 5K filled at 1/32. Naturally, I sold all of it four minutes later at the 3/32 bid. Alas, my renewed belief in Santa Claus was short-lived, since today after the market closed I received an email from Datek with the terse message: "Clearly erroneous filing. The NASD has decided to break your trade in STLC at 0.03."
I realize that Nasdaq has the authority to kill a "clearly erroneous" trade. But, instead of washing BOTH the buy and sale as common sense dictates, my account now shows that I am Short 5000 shares of STLC. This caused my current cash balance to go NEGATIVE $25,000. (It is my understanding that Datek allows shorting certain penny stocks, but requires a large cash reserve to protect the brokerage.)
Not even I am foolish enough to short a nine cent stock (in this case, tieing up 25K for a maximum potential profit of $150), although there's a good chance STLC will be worthless in a few weeks or months. My questions are: 1) Is Datek legally required to kill the entire transaction or am I stuck with the "short," and; 2) is there a time limit for filing a formal complaint with Datek (since it would be to my advantage to wait awhile to see if the forced short becomes profitable)?
P.S.: I apologize if this problem has already been addressed on this thread. If so, perhaps someone can point me to the prior posts. I could find nothing about it in the Datek FAQ. Thanks. |
