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What recourse do you have against your broker?


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What recourse do you have against your broker?

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  #1 (permalink)
L.A., CA
 
 
Posts: 1 since Sep 2015
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Hello,

I want to know what recourse does a client have against his broker.

To elaborate, I placed an OCO order in ES, let's say a long at 1000.
Now the OCO includes a 2 pt stop, and a 10 pt target, lets say.

Market trades currently at 1005, and I place a long OCO at 1000.

Moments later market trades down and I get filled on my long at 1000, but immediately platform freezes.

I got 2 other platforms running flawless so it's not my internet.

A minute and 30 sec later platform unfreezes and it tries to send the stop and target but it gets rejected since price is now trading 8 pts, well below my entry.

Needless to say, what should have been a 2pt loss, is now an 8pt loss.

So the error lies in either the broker, the platform, or whatever because the protective stop should have been in place PRIOR to price trading there.

Now my broker refuses to reimburse me on the loss to my stop of 2 pts.

What actions can i take?

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  #2 (permalink)
Bay Area California
 
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There's basically nothing you can do here to get the broker to pay for your losses. Tech risk is almost always on the end user, not the developer or broker. It's frustrating, but should illustrate the importance of reliable software. You might consider a platform that has server side infrastructure to handle your oco orders.

.
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  #3 (permalink)
Legendary Market Wizard
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farcry View Post
Hello,

I want to know what recourse does a client have against his broker.

To elaborate, I placed an OCO order in ES, let's say a long at 1000.
Now the OCO includes a 2 pt stop, and a 10 pt target, lets say.

Market trades currently at 1005, and I place a long OCO at 1000.

Moments later market trades down and I get filled on my long at 1000, but immediately platform freezes.

I got 2 other platforms running flawless so it's not my internet.

A minute and 30 sec later platform unfreezes and it tries to send the stop and target but it gets rejected since price is now trading 8 pts, well below my entry.

Needless to say, what should have been a 2pt loss, is now an 8pt loss.

So the error lies in either the broker, the platform, or whatever because the protective stop should have been in place PRIOR to price trading there.

Now my broker refuses to reimburse me on the loss to my stop of 2 pts.

What actions can i take?

If you have an edge in the markets, you know you can make it back, so this is not an issue.

"The mind is its own place, and in itself can make a heaven of hell, a hell of heaven." - Milton
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  #4 (permalink)
Mumbai, India
 
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Your general agreement with the broker is such that the broker is safe from such responsibilities. This is a very common problem in the third world where brokers usually come and go, very few manage to stay in business for a long time and when they are "discount brokers" this can happen on an almost weekly basis.

Usually what we do is take screenshots/photos of the problem with proof that it was not your fault to best of our capacity and post/send it to brokers helpline/forum, first response is usually polite but slowly broker/RM will drag you through mud of complicated things that will have you believe that its in fact not their issue. In which case, quite literally you can't do anything other than going legal ways. It usually costs lot more money to do that compared to what you may have lost on the trade so people usually let go, its also much easier to shift brokers here so people end up shifting to other broker (which they belive will be better than last one but never is)

There is however a rare case when brokers are usually more cooperative, such was demonstrated when oil went to -ve and some brokers had massive losses. At that time IB had supported its users. This however, is a very rare case and usually happens when brokers know massive class action may follow.

tldr, keep proofs/photos and hope problem is small enough for broker to resolve or be prepared to move on to next one.

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  #5 (permalink)
Elite_Member
Wiltshire, United Kingdom
 
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farcry View Post
So the error lies in either the broker, the platform, or whatever because the protective stop should have been in place PRIOR to price trading there.

Exactly. So why should the broker pay.
Could be a platform problem, could be a data provider problem, could be as Addchild says, you have chosen a platform where the stop loss orders are client side rather than server side.
As you don't include any details of your platform, broker, data provider; who knows.

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  #6 (permalink)
Legendary Market Wizard
Cleveland Ohio/United States
 
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Sorry for your loss.

Back in the old, old days of pit trading, I used to argue and get price adjustments sometimes when things went wrong (for example, I missed limit order fill). But it was always a fight.

But with the electronic markets, you are out of luck. I'm sure in one of the many lengthy disclaimers you probably accepted but did not read when you opened you account (seriously, does anyone read those?), you accepted full responsibility for anything that happens.

It sucks, but I look at it as a cost of doing business.

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  #7 (permalink)
Leeds UK
 
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addchild View Post
You might consider a platform that has server side infrastructure to handle your oco orders.


This is the key "learning point", to the extent that there is one. Realistically, you won't be able to remedy the problem this time. It's about trying to avoiding similar/worse issues, as much as possible, going forward.

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  #8 (permalink)
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Tymbeline View Post
This is the key "learning point", to the extent that there is one. Realistically, you won't be able to remedy the problem this time. It's about trying to avoiding similar/worse issues, as much as possible, going forward.

Okay, I might have a silly question here, but since I don't know what it is I've to ask, what does it mean to have a server side infrastructure platform?
Do you mean it to have somehow directly connected to exchange servers? (Basically lease line?)
Or do you mean something else?
Also, can you tell me name of any platform/broker that provides this?
I'm sorry if its silly but I'm just trying to learn what that actually means in this case

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  #9 (permalink)
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LastDino View Post
Okay, I might have a silly question here, but since I don't know what it is I've to ask, what does it mean to have a server side infrastructure platform?
Do you mean it to have somehow directly connected to exchange servers? (Basically lease line?)
Or do you mean something else?
Also, can you tell me name of any platform/broker that provides this?
I'm sorry if its silly but I'm just trying to learn what that actually means in this case

It means that OCO orders ("Order Cancels Order" = having both a stop and a target, and if one is hit, the other is cancelled) are held on your trading service's server instead of sitting on your PC.

If there is an issue with your computer or your platform or your internet connection, the server-side OCO will still be executed, because it doesn't depend on your local machine.

Many (probably most) trading platforms support this, if the trade service provides it. ("Trade service" would be a data network, such as CQG or Rithmic, which connects the trader, the broker and the exchange and routes the orders. You'd have to check if yours supports this.)

Access is via normal internet, and "servers" do not mean exchange servers. It's just that the OCO is "server side," not local.

Bob.

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  #10 (permalink)
Mumbai, India
 
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bobwest View Post
It means that OCO orders ("Order Cancels Order" = having both a stop and a target, and if one is hit, the other is cancelled) are held on your trading service's server instead of sitting on your PC.

If there is an issue with your computer or your platform or your internet connection, the server-side OCO will still be executed, because it doesn't depend on your local machine.

Many (probably most) trading platforms support this, if the trade service provides it. ("Trade service" would be a data network, such as CQG or Rithmic, which connects the trader, the broker and the exchange and routes the orders. You'd have to check if yours supports this.)

Access is via normal internet, and "servers" do not mean exchange servers. It's just that the OCO is "server side," not local.

Bob.

Understood, thank you! I'll remember to check this with my broker. I learned lot of things today

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