Fidelity must have had a come to Jesus meeting on odd lot trades.
NYSE Rule 124 (C) seems relatively clear to me: "Marketable odd-lot orders will be executed in time priority of receipt by the System at the price of the next round-lot transaction on the Exchange." When I entered the trade to buy 50 shares of STDPRB, the round lots were trading at 18.49 and 18.50, nowhere close to where Knight filled the order. So, I may stay with Fidelity notwithstanding this particular problem that I have been having with them, unless they fire me as a customer which they have done in the past for someone else. I have had far more perplexing problems with other discount brokers (e.g. Brokerage Firms-You Have to Look Out For Yourself) And it was not even necessary for me to be doing anything at all to have the problem as shown in the story recounted in that last linked post.
I have avoided the really serious problems that individual investors have experienced over the years who have used full service brokers. I would not use a full service broker now if they paid me to use them. I do not need to recount or summarize those types of recurring and extremely serious problems. My last buy from a full service broker was in the late 1970s, when I bought 400 shares of Duke via Smith Barney, one of the few stock buys that I made during that period.
You do realize it is April 1st...
ReplyDeleteI'm happy to see your issue corrected, but a sad example that you had to pursue it in the first place.
That trade was no isolated accident or anomaly. Instead of doing the right thing and correcting the systemic problem, the current matching system will remain to bleed the individual retail investor (a.k.a. "prey") of every nickel they can, ignoring what's "right" in the name of profit.
Only a small percentage of retail investors actually pursue recourse (not to mention legal) due to the time-consuming and frustrating multi-tiered escalation labyrinth they put their retail clients through.
The cost to mitigate "complainers" is justified by the profit. It's sad that the burden of doing what's right is put on the customer.
Luther: Eventually, this kind of issue will be resolved in a class action suit, and then it will be settled relatively quickly and almost entirely to the benefit of the lawyers who bring the suit. Maybe a few nickels will flow down to the investors who overpaid (never at a better price than the round lots to be sure).
ReplyDeleteI am no securities lawyer, never studied the law in that area even for a second, but I view my position as both the legal and the right one. It took me about one minute to find NYSE Rule 124 (C) and another minute to read it. As I mentioned I represented entertainers and worked most of career in litigation, primarily antitrust and defense work in tort litigation.
Obviously it was not about the money on this STDPRB trade, but the principle and the inability to have confidence in odd lot market orders in the future, even where there is active round lot trading in a narrow range.
You may be right about April fools.