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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: sam who wrote (4430)	9/26/1999 10:54:00 AM
From: Threei	Read Replies (1) \| Respond to of 18137

sam, your broker is right. There are rules defining erroneous trade that ought to be broken. If I remember correct, trade executed more than one point away from current market is considered erroneous. Buy instead of sell is another kind of mistake - noone can judge was it mistake or your decision to add to position. You can find info about breaking the trade (how and when) surfing NASDAQ site and manual. Regards, Vadym

To: sam who wrote (4430)	9/26/1999 11:17:00 AM
From: Dominick	Read Replies (2) \| Respond to of 18137

Sam: About a year ago I was showing my brother how to enter a trade and watch the bid show up on level II. I put the bid in 10 points below the best bid. I got a confirmation of a purchase. While in a state of shock and fumbling with the keys I immediately tried to sell the shares below the best offer. Too late! The phone rang, my broker-dealer said the MM wanted the trade cancelled. I offered all the same reasoning you did but to no avail. You may not know the reason why a trade was made but it is reasonable to assume everyone wants the best possible price. I feel your pain, Dominick

To: sam who wrote (4430)	9/26/1999 11:51:00 PM
From: OZ	Read Replies (1) \| Respond to of 18137

From what I understand. There are not any 'erroneous' trades before regular market hours. I forget the source of that information though. I believe that any trade made before the bell is a valid trade and subject to all risk. I think your broker rolled over out of fear. Does anyone else know better??? I would like to know? Louise

To: sam who wrote (4430)	9/27/1999 6:21:00 PM
From: Eric P	Respond to of 18137

Sam: Unfortunately, your trade was 'clearly erroneous' and was properly broken. The full explanation of a clearly erroneous trade can be found in Chapter 8 of the Nasdaq trader's manual: nasdaqtrader.com A few general pointer on 'clearly erroneous' trades: 1) Trades can be clearly erroneous in pre-market trading. 2) If you made a trade in error, and feel it was 'clearly erroneous', you must contact your broker and have them attempt to break the trade. There are time limits for this, though. A written request must be made to Nasdaq within 30 minutes of the trade execution. If the trade occurs during the open (9:30 to 10:00 AM, the request deadline is 10:30 AM). 3) For direct ECN trades (i.e. not using SNet), the broker must call the ECN and request to have the trade broken through them, not Nasdaq. 4) Determination on whether the trade was 'clearly erroneous' is somewhat of a judgement call. In your trade, for example, the ISLD quote was "70 points away from the market" (previous close?). Assuming that all of the market maker quotes, and pre-market trades were also 70 points away => you can assume that the ISLD quote was indeed erroneous. However, let's assume that the stock reported awful news and trades were being transacted on Instinet at 68 points lower. Let's further assume that the market maker quotes are widely varied, but substantially lower than yesterday. => In this case, the ISLD quote of -70 from yesterday would not be considered erroneous. It is a judgement call, in light of the current situation in the stock. 5) If the trade is ruled erroneous, and you don't believe this is the correct ruling, your broker can appeal the ruling. Note that this must also be done within certain time constraints, i.e. within 30 minutes (?) of the time the trade was ruled erroneous. 6) If your broker is not willing to 'go to bat for you', then you should definitely consider changing brokers. They are paid to work for you. Any broker unwilling to take the small effort required to support you in these circumstances should be fired. Perhaps in your case, they simply should have been a bit more understanding in explaining why you trade would likely be broken. However, it is always possible that the other side of your trade will not realize the error until after the time limit has expired, thus giving you an easy profit. Any any case, if you want to appeal the trade, they absolutely should be supporting you. Good luck, -Eric