Conference nyoss1::market_investing

256.0. "Fidelity- r.e. orders getting split" by VINO::SPIELMAN (jerry DTN 297-6924) Thu Jul 23 1992 22:18

This note offers some warnings about how Fidelity handles notification of
trades related to partially filled orders, and totally filled orders.
Perhaps this information may save someone else the extra cost of an unwanted 
commission. The case that impacted me was for a trade carried out the next day, 
when the prior day's order (GTX) only partially executed.

The punch line of this story is to be careful about how you request to be
notified of the transaction. 
    
    If anyone can add to this or propose workarounds I'd be interested in
    hearing them.
    
    Here's a real scenario. Number of shares and price are interesting as
    they come out around the $6000 dollar volume, which  is when
    commissions start getting reasonably low. Here goes:

Suppose you want to buy 1000 shares of stock XYZ at 6.50 per share or less.
You can place an order at the 6.50 limit, and you can also specify,

  - Good till crossing (GTX) - this is like "good until canceled by me", but
     also includes the possibility of your order getting filled in the 
     "after market" on any day when the stock closes at or below your limit. 
     (Aftermarket is trading from 4pm to (I believe) 5pm to satisfy remaining 
     matching orders at the closing stock price).

  (other types of specifications for an order are attached at the end
   of this note)


ANOTHER PARAMETER OF YOUR ORDER IS:

   "Do you want a telephone callback when it is filled (or possibly when
     any part is filled ?-- I don't have the recording of what was said to me.)

    I said YES. The gotcha here, I have since found out is that the field
    used to encode this in their  computer system, is the same one used to
    (alternatively) mean, post the result of your transaction to the FAST
    database. This means,  that you cannot dial 654-6544  and use the option to 
    check for recent transactions in your account to learn that the trade 
    executed. If FIDO doesn't call you, you will
    not know of your purchase.  Here's how your plans to track your order
    can get fouled up: 

      Of the 1000 shares, 900 got bought on Monday. On Tuesday, they buy 100
      more to fill my order. (This in itself is very suspicious for a stock
      trading 1/4 million shares a day.)   My intention was to check the 
      system each
      night, thereby learn of the 900 shares purchased, and cancel the rest
      of the order before the open the next day.  On Monday and Tuesday nights
      (late) the system claimed no transactions for me.
      I also never got a phone call. Thursday, when I made another FAST inquiry
      I get two recorded transactions describing the two "trades".  Yet neither
      of these was on-line as of Tuesday midnight, (and possibly I checked 
      Wednesday).
      

      My order executed on Monday, and the remainder Tuesday. The FAST system
      didn't show my orders filled until Thursday ( possibly Wednesday).

      I called FIDO Thursday and requested an explanation, and got the above
      information (your average phone order handler may not know about the
      voice phone call cancelling the FAST database element). I requested
      that they handle the last hundred shares as part of one large commission.
      The guy who handled the call made some inquiries and said there was no
      way for him to do that. Since I don't have time to make a campaign over
      $35, I'm probably not going to pursue it further.

    We aren't talking big bucks here, but the additional commission for 100
    shares is probably $40 vs. maybe $5 if the original order went for 1000
    shares. The $35 difference increased my total commission by about 40%.   

What is still a mystery, is this: If they didn't think they should call me,
(I believe their error), then when should they post the news of my transactions
in the aftermarket? I think by midnight ought to be good enough. Does anyone
else have related experiences, or have first hand input from FIDO about how
soon they guarantee posting transactions to the FAST access system ?

--------------------------------------------------------------------------
FYI: Additional modes for placing orders  (


  - Good for the day only (GFD) - means, at end of day, unfilled order is
                                  automatically canceled out.

  - GFD with "fill or kill": (either complete all in 1 day or buy none)

    (note: this case may make it harder to get the stock since it is
          probably tantamount to finding a matching seller for your
          price who is offering all 1000 shares at your price or less)

  - Good till canceled (GTC) - means, the order stays on the exchange books
     until it is completed. But this means you may get 100 shares a day
     over several days, and pay a separate commission for 100 shares on each
     (expensive commissions compared to all in 1 order). The "Crossing"
     or, aftermarket trades are not considered in this mode. I don't know why
     it wouldn't always be useful to include the "crossing" in your order
     instead.  But you can't place an order good for only 1 day including 
     the crossing. I wonder why ?

    

    Jerry,
    
    I believe that ALL FAST transactions take place in the wee hours of the
    morning.  A human can look at your account on the screen and see that
    you "sold" or "bought" or moved money around by looking at your entire 
    account but the FAST system doesn't know that it is going to happen:
    it only 'knows' after it has already taken place.
    If you sell mutual funds during the day, and call FAST that night
    (prior to midnight), the system still thinks that you own the shares.
    Apparently the brokerage line does the same. 
    Yet when I call in the morning, the money is out of the specific fund
    I sold and in the fund that I transferred to.
    I think that if you had called in the morning of the next day you would
    have known that a trade took place. (Although I'm not taking into
    account settlement days. Technically you don't own the stock for 5
    business days...)