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Swiss Bank Threatens to Sue NASDAQ Over Facebook IPO
jfruh writes "On the day of the Facebook IPO, the NASDAQ's trading systems suffered multiple failures and couldn't confirm buy orders for several hours. Big banks buying shares for their funds and customers placed multiple orders as a result, and bought more Facebook stock than they intended to as a result. NASDAQ has agreed to set up a fund to compensate them for their losses, but apparently this isn't enough for Swiss bank UBS, which is threatening legal action."
Basically it sounds like someone clicked the buy button like they were pushing an elevator button to make it arrive faster. That works, you know.
if the price was going up, would they be returning the stock for a refund?
So you're saying if you pushed the elevator button and got no response (no light, nothing) you wouldn't push it again? You would just stand there with your dick in your hand hoping that the press registered?
But then, when you buy stock in a company with no real product and it tanks to about 50% it's IPO value, you can only blame yourself and your silly Bay of Pigs attitude towards business.
A feeling of having made the same mistake before: Deja Foobar
As a swiss i'm a bit offended by this post. You're right about it beeing UBS' fault.
But the rest is PURE BS.
We have some privacy laws. Like forbiding any government (including ours!) to snoop around our finances. That's it. There will always people who abuse this. But if you want to live in a police state with no privacy fine. I'm a regular citizen, pay my taxes and i still think it's a good thing the gov can't snoop around my bank accounts.
Probably wouldn't last too long. I am sure some people would start to question why your dick was out in the first place.
"That's right...I said it."
These are getting to be fairly frequent events. See http://www.forbes.com/sites/davidleinweber/2012/08/01/another-tech-glitch-roils-markets-how-simulation-could-help/ for comments on the problems this morning, and how traders might be able to build their own early warning systems
Author, "Nerds on Wall Street: Math, Machines & Wired Markets" Wiley, 2009 http://tinyurl.com/y93o9ol Fellow in Fin
If the system is down, don't keep submitting orders.
Exactly. Absence of a confirmation is not confirmation that there is no order.
In that case, the transactionally correct action would be to cancel the original order,
and receive confirmation of the cancel, before attempting to place another order.
That depends on what the protocol spec says. If NASDAQ acknowledged receiving the order but didn't confirm that the order was placed, it's entirely possible that the right thing to do was send the order again under the assumption that it didn't get filled.
Of course any system that doesn't use unique transaction ID's to prevent dupes is braindead, but I've been appalled at some of the brain dead protocols I've seen that are used to transfer large volumes of transactions amongst businesses (sometimes involving someone manually keying them in on both ends with no check digits or other verification.)
Of course... if Facebook stock had gone up instead, then they would complain that more orders were cancelled and not resubmitted than they intended.
That's why you better make sure your systems work correctly before you accept billions of dollars of orders since your liability can be measured in billions of dollars.
No, I want $1000 dollars of FB. If that's 40 shares at the time I place the order and 20 shares at the time the order is processed 4 hours later because Nasdaq screws up, I get 40 shares and a bill for $2000. It's not about trying the order 10 times because it doesn't confirm, but that you buy shares, not $$$, so if the price changes in 4 hours on IPO day, you will get screwed. And price will *always* change on IPO day.
Learn to love Alaska
My dick was in my hand before I got on the elevator.
You are welcome on my lawn.
So you're saying if you pushed the elevator button and got no response (no light, nothing) you wouldn't push it again? You would just stand there with your dick in your hand hoping that the press registered?
If I ran the risk of possibly buying a thousand shares of facebook stock every time I pressed the button, I'd start to give the 'dick in hand' strategy some serious consideration...
USB, along with Barkley's and RBS (Royal Bank of Scotland) are all under investigation for rigging LIBOR. This is potentially the largest currency fraud in the history of the world. Literally 100 of TRILLIONS of US dollars may have been influenced by rigging interest rates.
http://articles.economictimes.indiatimes.com/2012-07-28/news/32906786_1_libor-global-benchmark-interest-rates-credit-card-rates
So USB getting press about how unfair NASDAQ is acting could be an attempt at a smokescreen while they deal with their own problems. It's been reported that these banks are willing to do almost anything to settle with regulators because they are terrified of the potential liability if any more information comes out. Bankruptcy is not out of the question, and neither is jail time.
One can only hope that this time these evil bastards finally get some small measure of what they deserve.
Why is Snark Required?
I work in the trading industry with experience tracking down order problems between client and exchange, and if you do not receive information on your original order status you had better contact the exchange to find out what happened. FIRING ADDITIONAL ORDERS INTO THE ETHER IS A STUPID DECISION AND YOU ARE 100% LIABLE FOR BEING AN IDIOT.
Pretty much all of the exchanges use a unique order ID function for tracking orders (both client-unique and exchange unique generated on either side and provided to the other). Once you submit the order a few different things need to happen for almost all exchanges.
You will receive an order confirmation (Ack message) which will typically contain all of the same information your order had in it along with the Exchange Order ID (you have your own client order ID attached to the trade which is echoed back to you too) or you will receive a Reject message if your order has something wrong with it (price is not valid for the security you are trading, order ID is a duplicate of one you sent already, order type is not allowed for your account, you are submitting a day order during an invalid session, trading is suspended on that security, etc).
Once your order is acknowledged IT IS LIVE ON THE MARKET. There isn't a valid order state where the exchange has accepted the order, but it won't match in the matching engine against suitable orders (bugs not withstanding, but are extremely rare). Some order types like IOC orders may not be acknowledged but must come back as a trade or a cancel message (IOC is "immediate or cancel", as-in match my order now or cancel it back to me).
If you submit an order and it does not either come back as acknowledged, filled, cancelled, or rejected then you DO NOT KNOW THE CURRENT STATE OF THE ORDER AND MUST CONTACT THE EXCHANGE FOR ASSISTANCE. At this time your order is considered live (to you at least) and may come back filled at any time! If you have not received an order acknowledgement or reject message you can TRY to cancel your pending order using your own client order ID on some exchanges (others mandate you cancel your order based on their exchange ID), but until you get a FULL cancel confirmation your order is considered LIVE on the market and may be filled at any time.
Let me repeat one more time: while your order is in any other state than fully canceled, filled, or rejected you MAY BE FILLED at any time!
Poster before you is correct, anyone who continues trading without knowing exactly the state of their order is a FOOL. You cannot assume anything about the state of your order if you are missing information from the exchange.
Read the fucking summary, they purchased multiples when the confirm was not received. Therefor they now have more dead IPO than they had wanted because a system failed to produce the appropriate response.
"If NASDAQ acknowledged receiving the order but didn't confirm that the order was placed, it's entirely possible that the right thing to do was send the order again under the assumption that it didn't get filled."
Exactly, you resend with a poss resend flag on the fix message
http://fixprotocol.org/FIXimate3.0/en/FIX.4.2/tag97.html
my guess is an algo went out of control at the swiss bank.
(disclaimer, I work with FIX messaging as a day job and I used to worked for a company that is now part of OMX-NASDAQ)
if
Allow me to introduce you to the limit order. You want to buy $1000 of FB and your screen/broker/google-finance says that it's $25/share? Send your limit order for 40 shares @ $25. If the price jumps up (regardless of the reason) you won't get filled and you'll have to try again later, but at least you're not stuck with a mystery bill for your purchase. If you sent a market order for 40 shares... well... I hope it was a good learning experience.