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Technology Stocks : MRV Communications (MRVC) opinions? -- Ignore unavailable to you. Want to Upgrade?

To: Dennis R. Duke who wrote (11706)	1/22/1999 12:11:00 AM
From: Robert G. Harrell	Read Replies (1) \| Respond to of 42804

<OT> Dennis, I wish I had read this when we had no news and only grammar and punctuation were being discussed but I've been wanting to share a recent on-line trading horror story as a warning to others. Since I'm down nearly $40K today with 3 blow-ups this week and CUBE probably becoming #4 tomorrow, I'm in a mood to vent. I've been trading on line for 2 1/2 years. I started with Jack White Co. because they were rated number 1 in Smart Money at the time. I later added an account with Discover Brokerage Direct. Until about 10 days ago I have been extremely happy with Jack White. I've found Discover to be extremely slow to virtually unusable at times on really heavy days like Oct 8 when you want to be able to move fast. Only in the last few weeks has the Jack White site shown problems with over load. I don't find the issue of spreads to be a problem because I mostly place limit orders. I don't care what the MM does if I get my price. When I want to buy or sell a stock NOW and it isn't moving fast, I almost always get a fill when I place an order between the bid and ask. If a stock suddenly moves quickly and dramatically up or down and I want to take advantage of the move, I've learned the hard way to not quibble over 1/8's and take the market. I can't tell you how many times I've missed a great buying or selling opportunity by trying to squeeze out that last 1/8 or 1/16 and missing the train completely. Both companies have lots of features on their sites and each has its strengths and weaknesses. Discover is their own clearing house so all accounts are kept real time. They don't require a password to execute a trade which can allow you to make a hasty mistake. You enter the trade you want and the confirmation screen has buttons to trade, cancel or modify. If you hit trade when you meant to modify it's too late to change if it's a market order. Stop and limit orders will be on an open order screen you can call up. Orders that are still open will have cancel and edit buttons next to them. This is the one feature on Discover that is clunky. They don't clean up the changes in any kind of systematic way so the screen is filled with old changed orders. If you placed a GTC order a long time ago and forgot about it, you won't see it unless the dates specified when you request to see open orders includes the date when the order was placed. The Jack White system requires a password to submit an order so it slows you down a little when you are trying to make lots of trades quickly but it protects you from careless mistakes. Jack white uses Pershing for clearing transactions so your account is not updated until the following day, often not until 9:30 or10AM Eastern Time.The Jack White system normally keeps your open orders nicely organized and updated. My horror story involves a time when I think their software failed. Until very recently both sites would not allow you to make a double trade or over trade your account. If I tried to sell more shares than I owned, checked cash account when the shares were in my margin account or entered a sell for stock which already had a standing sell order, Jack White used to give an error message saying "you don't own this many shares." Similarly, if I didn't have enough buying power, they would deny the trade with "you don't have enough money." I don't trade nearly as much in the Discover account. It was set up for some mechanical systems I use which are updated monthly so I can't say for sure, but I think Discover has similar protections. HORROR STORY: About 10 days to 2 weeks ago I started getting all kinds of strange error messages when I would submit trades on Jack White's site: "price is too far from market"(when it was a limit order maybe 1 point below market) or "order exceeds $150,000" (when it was for maybe $7500) or "can't be filled for technical reasons." I suspect that they re-wrote some of their software when they made the internut stocks unmarginable and some programing errors were made. Anyway I had 200 shares of At-Home which I bought in early December and decided to lock in most of my profit when things started getting really frothy about 2 weeks ago. The shares were bought in my margin account. I set a stop order on it at 90. On the next day when ATHM shot up to 126, I tried to raise the stop loss order to 110 and kept getting error messages. I think I was trying to raise stops on 5 different stocks that day and had trouble with 2 of them. Later in the day I tried again and since ATHM had dropped all the way down to 106 in the interim I tried for 98 and apparently got it. When you change a stop order on Jack White you have to go to "orders, status" and click on edit next to the order you want to change. It then shows the existing order and you have to change the order to what you want and presubmit it. You then get two windows with the old order in one and the new order in the other. You type in your password under the two screens and hit submit. Then a confirmation number comes up ( but no trade information. Discover shows the trade with the confirmation number--a much better system.) It is pretty hard to not know what you are doing. After another day or two, ATHM was acting like it was ready to break so I went through the edit process again and upped my stop to 105. I have a hard copy of my order status screen after this and it had three lines of ATHM orders showing two with a previous stop price and one, with the new stop price. Beside both old orders in the status column where it has always shown Plcd or Accp, was Mod and on the opposite side where the "edit" button usually is, there was a blank space. The newest order had Accp in the status column and an "edit" button next to it. Since all kinds of squirrely things had been happening in recent days I figured the "mod" orders were meaningless artifacts. Later that day ATHM started dropping like a rock and the SL 200 ATHM STOP 105 dropped down to the bottom of the page as SLD 200 ATHM 102. I was happy to be rid of ATHM. I had ridden it up from 66 3/4 and had a nice profit. The next morning was the Brazilian scare with the NASDAQ gapping down over 100 points at the open. Many of my stocks gapped down to the low for the day at the open and tripped out stops at the low. A really bad day. The Jack White site was real slow. When I finally got to the order status screen, there under transactions was SLD 200 ATHM 81 !!! It took forever to get through to Jack White on the phone to find out what had happened. They insisted that I had placed 2 different sell orders even though in the past their system would never have allowed that to happen and so I was effectively short 200 ATHM at 81 (by then it was back over 100) and they were very sorry but there was nothing they could do and would I please clear this up today. I quickly bought 400 shares to cover the "short" and hopefully ride up one more run up to make back my loss. After several conversations with at least 3 people and a threat to take my problem on line and to the SEC, they finally agreed to meet me half way and refund 1/2 my loss. The way they chose to refund my money was by putting 200 shares in my account at one price and taking out 200 shares at a different price but they didn't do it all at once so I was again freaked out because I had placed a limit sell on my extra 200 shares hoping to get out as quickly as possible and I was afraid their transactions would screw up my transaction. By the following Monday my account showed 200 ATHM and I was able to execute a limit sell 10 points above my repurchase price so everything was finally OK. HA! The next morning there was something fishy about my account balances so I checked my holdings and there was 200 ATHM Cash, -200 ATHM margin. When they swapped the stock around they moved my shares from margin to cash and I didn't realize it. In the past their system would not have allowed me to enter a margin sell on stock that was in my cash account. I would have gotten a "ERROR: you don't own this many shares" message. So now I'm back short the stock again. I called them, explained what had happened and asked them to please cancel the two entries out using my cash shares to cover the margin sale. Although I was assured this was done, today my account still showed the double entry. This is the stock that refuses to die. LESSON: With Jack White Co. be very careful because at least right now their system will make, or allow you to make, mistakes. I used to be incredibly happy trading with them and recommended them to everyone. I even moved my father's account to them. They have been bought out by Waterhouse Securities and some of the problems may be a result of this but they are supposed to soon be their own clearing house (like Discover is) and maybe the problems will be corrected when everything is changed over. Sorry this is so long but hope it may prevent someone from having a similar bad experience. Bob