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Tom:
I may be spoiled by the service I get, but here's one thing that I always do
when placing an order: I have the person I speak with get the pit on the phone
and check the bid and offer before I place the order. I never trust my datafeed
or their screens. This also makes the floor person on the other side of the
phone, as well as the floor broker, be included in that 'price and time' chain
in case something goes wrong. Remember, the Merc uses hand signals, so a phone
clerk easily checks prices, bids and offers even when well outside the pit.
As I said, that firm may not have let you get a live price quote, but if that's
the case, I would have looked for another broker, if I were you. And I have
traded options on the Merc-I always start out by finding the exact bid and
offer from the pit and then I give them my order.
I also am much more persistent about getting a fill. The closer time is to the
close, the more frequent my phone calls would have been. By that last half hour,
they would have had a headache from my calls. And with fifteen minutes left to
trade, I would not have hung up without a verbal fill or a guarantee from the
desk manager. It's your account and your money--Demand an answer before the
close.
That's my three cents.
Best,
Tim Morge
Thomas Brun wrote:
>
> Timothy Morge wrote:
> >
> > Tom:
> >
> > Thanks for sharing your experience. I'm sorry you weren't able to win against
> > either the floor broker or your [ex] clearing firm.
> >
> > A couple thoughts come to mind: While you were waiting for your fill, when you
> > called your clearing firm, did you have them give you a current price, so that
> > you were speaking to a person from the firm that actually told you the current
> > price was *above* your order to sell?
>
> While I was on the phone giving the order I noted that the price had
> changed to 19.00 from 17.00, my order was to sell at 16.00. The person
> who was taking my order also noted that her screen showed a price of
> 19.00. This person was the trading desk supervisor who just happended
> to pick up the phone to take the order. She told me that the floor was
> really backed up. I took that to mean that the reporting of the fill
> would take much longer than usual. Not that it matters but she said
> "Nice Trade".
>
> If so, and that person could not give you
> > a 'verbal' confirmation that you were filled, did you ask to speak to a manager?
> > If you did, did you note who you spoke with and the bid and ask they qouted, as
> > well as the time each phone call occurred?
>
> I'm not sure of the times that I called back to check on the fill( I
> have it on tape but I don't have a time stamp on the recorder) but It
> wasn't unusual for a report to come back in an 1/2 hour on a normal day.
> That would be a long time for the futures but the options always seemed
> to be slower. After 1 hour and 24 minutes the option was under my
> price. So I really didn't think it was fair for them to expect me to
> know the status of the order. The letter from the compliance dept. of
> the broker stated that "Conditions were such that day that the floor
> brokers were not allowing my firm to check the status of orders".
> >
> > Second, I would never had let the day trading end without getting a price *or*
> > closing out the position after informing the trading/order manager that you put
> > in the order at XX time, that you spoke to them XX numbers of time, that they
> > quoted you XX, which is well above the price you were selling at and that unless
> > they give you a verbal fill, you are selling the option and the risk then will
> > be theirs from that point forward. When you attend the Merc's classes for new
> > floor brokers, the first thing they teach you is that if there is an outtrade,
> > close the exposure and then do what you have to to get adjusted. I mention that
> > because if you were being judged by floor brokers, that's why they wanted to
> > know why you hadn't closed the position by the close, one way or the other.
>
> When I called the last time I got the voice mail. They were gone for
> the day. in the previous call they said they would get back to me. The
> (29th)following day they claim they received the unable. The floor
> broker claimed that he reported it on the same day (28th). I'm as sure
> as I can be that the floor broker lost it. I just can't prove it. Once
> again my mistake by letting the firm off the hook because if I could
> prove that he reported it the following day that would have very much
> helped my case and it would have implied that he lost the order.
> >
> This trade was an offset so I wasn't really exposed to any positions. I
> made that point at the hearing because I was asked why I didn't close
> out the position the following morning. I said that I was in shock and
> that I was sure someone would call and tell me that I was filled and
> that they found the error. What I was afraid to do was to sell a put
> and then discover that I did in fact sell the first put and then I would
> be short 1 put. At least I knew on the 29th of october that I was only
> risking $2,000.00 ( my inital cost ). I lost $7,000.00 in 90 minutes
> on the 28th. After that there didn't seem like there was much I could
> do. I honestly had no doubt that I was out. I later discovered that 25%
> of the day's entire volume occured at prices higher than mine. 2 trades
> occured higher than my offer price and when I saw the Bid posted at 20 I
> thought for sure that I was out.
>
> > Last, I would certainly call the NFA an the CFTC, even now. Although they might
> > tell you that they cannot help you because you went to arbitration, you *can* at
> > least file a letter of protest against that floor broker and that clearing firm
> > and will be in their records and available to anyone else having trouble or
> > investigating that firm or broker before doing business.
>
> If someone has the correct address for the CFTC I will.
>
>
> >
> > Those are my thoughts on the matter. I'm sure Neil and some other folks have
> > other thoughts to add. And these issues should be of interest to everyone on
> > this list if they trade. Handling an order correctly, including handling errors,
> > can save you a ton of money.
> >
> > Best,
> >
> > Tim Morge
>
> Regards,
>
> Tom Brun
> >
> >
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