ISLD Trades Important Message

[Trader333]

Anyone who has had trades go through Island today (Friday 27th Feb) had just better check that they are valid. I got a message saying that some are classed as being bust. The worse situation is that you may have a trade still open when you thought it was closed so better just check with your broker.



Paul

 

[BBB]

....another money saving tip from Paul! Thanks.

What was the cause - do we know? I've looked at the inet site but no details that I can find.

 

[TheBramble]

Bust = Broken?

Does this happen often?

Is there any legal/financial come-back on them or do they/the broker etc have this situation tied-up?

And how could you check if one or more of your trades had been valid/bust?

 

[Trader333]

It has not happened before that I have become aware of.

I dont know if you have any comeback from a legal standpoint and it is not the broker that had the problem it was the Island boys themselves.

To check you need to call your broker which is what I did as soon as I was aware this had happened.


Paul

 

[theknifemac]

Busted trades is one of those things which really amazed me when I first encountered them when I started working with the US markets. I was used to the European model where an electronic fill was pretty much done and dusted. In the US with the specialist system and the ECNs they have to cancel trades a lot more often that I was used to. As Paul said it is not an error with the broker but the actual exchange / ECN. The FIX protocol even supports these.

I've seen busts when a specialist screws up big time or when an index arb desk or someone with an automated system has a problem, say a clerk keys in the wrong big figure and the market moves a load of points. In these cases a lot of trades will be busted.

Mac

 

[Trader333]

This whole issue is obviously important and maybe someone could clarify the following scenario.

Say I have gone Long a stock at a time when it is classed as being busted, (so no trade has taken place yet but I think it has)

Then things return to normal and I now sell my position. Does this mean I now have an open Short position or is the whole trade voided ?

Anyone who knows please answer.


Paul

 

[TheBramble]

I've seen busts when a specialist screws up big time or when an index arb desk or someone with an automated system has a problem, say a clerk keys in the wrong big figure and the market moves a load of points. In these cases a lot of trades will be busted.

Presumably if you or I keyed in a wrong 'big figure' we'd have no chance of busting our own trade...strange how that works isn't it.

 

[TheBramble]

This whole issue is obviously important and maybe someone could clarify the following scenario.

Say I have gone Long a stock at a time when it is classed as being busted, (so no trade has taken place yet but I think it has)

Then things return to normal and I now sell my position. Does this mean I now have an open Short position or is the whole trade voided ?

Paul, I don't know for sure, but from my (limited) knowledge of the DAE trading/broker front-end you'd have to already be LONG the stock if you wanted to SELL it.

If you want to SHORT a stock you have to hit the SHORT button rather than the SELL button (If I'm getting this wrong, someone please jump in...).

The bigger exposure I think would be if you 'thought' you were SHORT and then covered with a LONG.

 

[BBB]

I would have thought that decision will rest with the broker, but not 100% on this. (They will probably say you should have checked your confirmations before placing the trade) Remember - to them, they lose your commission and the admin hastle of cancelling the trade if they refuse to budge. Thats probably not much if you're a high volume trader and they want your business. The difficulty probably lies in the roll back procedure - they can't then cancel the trade to the guy who bought off you, the guy he then sold to etc.

This may help you find an answer however:

http://nasd.broaddaylight.com/nasd/

 

[oatman]

They only bust your "bad" trade. Your counter trade is not their responsibility. It's the Exchange that bust trades, as already stated if there appears to be "abnormal" movement. It could of course produce a profit for you. The uncertainty is the big problem. There's no way round it.
It's probably in the small print.

 

[rog1111]

Busted trades

After a recent near miss, I have been advised by my broker (no name given at this juncture), that not only could a busted trade stop me out of a position, but interestingly, that NO reversal of my trade losses incurred would be likely in such a case, since the busted trade was nevertheless a trade at that time. I find this quite incredible, and I am waiting for the day when it happens.

Busted trades are a lot more common than most folk realise, and usually seem to come from one of the ECNs. You might do better if you are using stop orders that don't rely on the last trade method (eg double bid/offer), but this is often not possible for anything other than Nasdaq (OTC) stocks or options. There's something more than a bit suspect about all of this.....

rog1111

It has not happened before that I have become aware of.

I dont know if you have any comeback from a legal standpoint and it is not the broker that had the problem it was the Island boys themselves.

To check you need to call your broker which is what I did as soon as I was aware this had happened.


Paul

 

[JumpOff]

ISLD is an ECN for equities, correct? Does the same thing happen on other exchanges with commodities, financials, etc...?

Thanks,
JO

 

[rog1111]

Yes correct, although the busted trades seem to come from any of the ECNs not just Island. It wouldn't surprise me if the same happened in other electronic instruments, but I don't have any examples. Maybe others here have some evidence ?

rog1111

ISLD is an ECN for equities, correct? Does the same thing happen on other exchanges with commodities, financials, etc...?

Thanks,
JO