# Typos when selling stocks - can you renag on an order?



## Addy (Mar 12, 2010)

When a mistake is made, such as typing a sale for $65 for a stock that is worth $650, and the sale goes through, is there a way to get that stock back? Luckily I haven't made this mistake myself, but I have seen sales go through for some stocks (I get alerts when they go below whatever dollar value I set) for ridiculously low prices, and the prices they go for seem to be typos such as above.

I'm curious if it's a hard lesson for the person selling, or if they would be able to somehow cancel that transaction. Anyone here know?


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## m3s (Apr 3, 2010)

Hard lesson I would imagine but apparently there are "safeguards" to prevent some typos. There was the "fat finger theory" for the cause of the 2:45 Flash Crash of 2010

http://en.wikipedia.org/wiki/2010_Dow_Jones_Flash_Crash



> Electronic Futures Trading Market Protections
> 
> Both CME Globex and the ICE trading systems have automatic safety features – termed “pre-trade risk management functionality” – to protect against errors in the entry of orders (such as “fat finger” errors) and extreme price swings. These features help ensure fair and orderly markets.
> 
> ...


http://www.commodityonline.com/news/What-went-wrong-with-US-futures-on-Thursday-28089-2-1.html


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## ddkay (Nov 20, 2010)

I'd think most brokerages have safeguards in place. This is the message I get from Waterhouse attempting this scenario: "Your limit price is too far off the current market price. Please re-enter or contact your local TD Waterhouse office for assistance.[60101]"


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## humble_pie (Jun 7, 2009)

i really like that verb renag.

new year's resolution on cmf. 
let's have no renagging on the forum.

people do shoot themselves in the foot w option orders i hear. Not ones so far off they'd get rejected. Just ones like maybe to buy in an iron formation when they mean sell, etc.

far as i know such traders have got to live with the wounded foot. There's no way back.


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## mario 1 (Nov 6, 2009)

Once when the period on my keyboard was broken I put in a buy order for BCE
at $3050. It actually went through.  fortunately in most
cases you'll just get it at market. Got to be more careful with thinly traded stocks.


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## Addy (Mar 12, 2010)

I guess, by the sounds of it a stock valued at around $650 would not sell for $65... but why would I get an alert that the stock price has dipped to $65? I guess I need to contact qtrade to find out, but I am curious if anyone here would know. Do others get weird alerts like this? I've noticed it seems to be for one company's stocks only (I have about 30 alerts set up, but only this one company's stocks come through at wonky prices occasionally).

Thanks everyone for your input!!


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## HaroldCrump (Jun 10, 2009)

Addy said:


> When a mistake is made, such as typing a sale for $65 for a stock that is worth $650, and the sale goes through, is there a way to get that stock back? Luckily I haven't made this mistake myself, but I have seen sales go through for some stocks (I get alerts when they go below whatever dollar value I set) for ridiculously low prices, and the prices they go for seem to be typos such as above.
> 
> I'm curious if it's a hard lesson for the person selling, or if they would be able to somehow cancel that transaction. Anyone here know?


I doubt the brokerage will accept such an order.
Scotia iTrade that I'm with has some formula for calculating what limit orders they will accept.
It's something like +/- certain % of last price or last closing price.
Look up the online documentation of your brokerage - I'm pretty sure all standard brokerages will have such rules.

If a stock that on average is trading at $650 were to trade for $65 for no apparent reason, it's possible the stock exchange would take note and may even suspend trading.


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## Plugging Along (Jan 3, 2011)

*Error tracking*

I know I have put in some really odd orders where the price is much lower or higher than the market, and TD has stopped with an error message saying that it was out of their range. I think it may be a percentage or dollar value.

Also, I have made errors where I put my buy price too high, and it's given me the market value instead.


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## humble_pie (Jun 7, 2009)

brokers don't submit unrealistic orders to exchanges. If i remember correctly from some years back, exchanges will allow an order to survive approximately 15 minutes & then, if it's not filled, they charge a kill fee to the broker dumb enough to have sent it to them in the first place. Interactive, i believe, is a broker that passes such fees along to clients, at least in some cases.

what this means is that the brokers stack up limit orders within the house until such time as each order becomes worthy of being sent to an exchange. But there's a limit to what a broker can stack in its own warehouse, so brokers have formulae to advise clients when orders are outside the boundaries.


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## Mockingbird (Apr 29, 2009)

Addy said:


> When a mistake is made, such as typing a sale for $65 for a stock that is worth $650, and the sale goes through, is there a way to get that stock back? Luckily I haven't made this mistake myself, but I have seen sales go through for some stocks (I get alerts when they go below whatever dollar value I set) for ridiculously low prices, and the prices they go for seem to be typos such as above.
> 
> I'm curious if it's a hard lesson for the person selling, or if they would be able to somehow cancel that transaction. Anyone here know?


That's what you call a "Clearly Erroneous" execution/transaction in the stock markets and a "Bustable" trade in the futures market. Most brokers do have risk management software to prevent this from happening, but they are *not* fail proof. The onus is *always* on the trader to send the correct order. The brokers are not responsible for your errors nor their computer system errors on most part. If you want to bust a trade, the request needs to be submitted usually within the half hour of execution (varies by exchanges) and it will cost you an administration fee as well.

Unlike the US market, Canada (IIROC) currently uses a discretionary set of guidelines regarding this matter. However, IIROC is in the midst of changing over to US type, where the trades are busted based on objective, transparent parameters.

Clearly Erroneous trade for NYSE & NASDAQ: (% Difference from the Last Sale Price)

Last Sale..............Regular...............After
...Price.............Trading Hours..... Hour Trading
. $0-$25.00 ........... 10% ............... 20%
$25.01-$50.00 ........ 5% ................ 10%
$50.01 & up ........... 3% ................. 6%
(Leveraged) ....... (Above x) ........ (Above x)
.(ETF/ETN) ........ (Leverage) ....... (Leverage)
........................ (Multiplier) ....... (Multiplier)


Here are some of the CME Globex products: (Could be busted outside of this range)

Futures Contract (No Bust Range) 
Eurodollar, E-mini Eurodollar and LIBOR (2.5 basis points) 
U.S. T-Bond (30/32nds) 
10 Yr. T-Note (30/32nds) 
Currency Futures (40 ticks)
S&P 500 and E-mini S&P 500 (6.00 index points)
DJIA ($5, $10, $25) (60 index points)
E-mini Nasdaq Composite (12.00 index points)
Wheat & Mini-sized Wheat (10 cents per bushel) 
Soybeans & Mini-sized Soybeans (10 cents per bushel)
NYMEX Crude Oil and NYMEX miNY Crude Oil ($1.00)
COMEX Gold and miNY Gold ($10.00)

MB


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