"To err is human; to forgive, divine," says English poet Alexander Pope. Perhaps he had stock brokers in mind. Well, probably not, but they do make mistakes. For instance, you might receive a cancellation notice on a trade. This document will explain that there was an error made on some trade and detail what is being done to correct it.
As just a couple of examples, let's say Dick Doright places an order with his broker Joe Trader to buy 400 shares of Get It Right Inc. Joe is in a big hurry that day and mistakenly buys Get it Wrong Inc. Dick will receive a cancellation notice describing the error and Joe will then place the correct order. If the price of Get It Right has gone up in the meantime, Joe Trader will have to eat the difference between that and the original order.
Or let's say Joe Trader continues to have a bad day and purchases 1,000 shares of a stock for Sam Doright, instead of his requested 900. Joe will have to issue the cancellation and sell the extra 100 shares at his own expense.
Since errors are common even in the electronic age, the Securities and Exchange Commission (SEC) established rules in 2009 requiring that reviews of trades must take place within 30 minutes of the trade and be corrected within 30 minutes of the review process.
Related or Semi-related Video
Finance: What is an All or None Order?71 Views
finance a la shmoop what is an all-or-none order oh you'd think that
spoiled brats only live on playgrounds of participation trophy cities hmm but [Boys holding participation trophies]
that is oh so sadly not true they roam the wild hallways of Wall Street
investment firms in droves and all-or-none order means that a buyer or
seller of stock either wants all of their shares bought or sold or none of
them and yes this applies to bonds preferred stocks and other random [Man discussing stocks and bonds]
hybrids as well.....A buyer has a portfolio of 500 million dollars in small cap
growth stocks generally speaking she's told her clients that she won't take
less than a 2% position in anything because she wants to be able to focus on
a core group of stocks and really be on top of any big movements hoping to sell [Stocks in a sack land on a table]
the shares before well, any huge problems holding so in this case she's
found a company she loves an appropriately named coal company for [Woman looking through binoculars in her car]
spoiled investors called mine mine mine the only problem is that the stock is
thinly traded that is not a ton of shares trade every day and she needs to
own either ten million dollars worth of stock which would be a two percent
position or she doesn't want to own any the stock at the moment is trading at
ten dollars and seven cents a share and she wants it at ten bucks or better...
well at ten dollars and one penny she has no interest whatsoever in that stock [Stock graph for mine mine mine company]
at 10.00 she's a buyer so that is her limit order but on this all-or-none
order she waits and waits and waits knowing that sometimes all-or-none [Woman looking at laptop waiting for the stocks]
orders simply never get filled other times they get filled scarily too fast
like the seller knew something the buyer did not but along comes a bad market day
the White House says something stupid what are the odds? and the market tanks for
an hour and blam she is the proud new owner of a million shares of mine mine
mine good for her those shares are now all hers hers hers [Pigeon poops on mans head]
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