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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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