View Full Version : Security (or otherwise) of conditional orders

09-07-2011, 12:14 PM
[Reposted here, at moimoi's suggestion, from Phaedrus' thread "Buying in a Downtrend" in the "Investment Strategies" section]

New topic: the security, or otherwise, of stop-loss (or other conditional) orders.

I'm interested from hearing from those with more market experience (and hopefully also from some who have worked as brokers) as to how transparent these orders are within the broking firms (i.e. what limits are placed on access to them).

An example: I had a disturbing experience where I had a conditional sell order actioned inappropriately by my broker. The disturbing aspect was that the buy order came from another client of my broker (i.e. it was an internal trade) and that the sp hadn't otherwise fallen to the level required to trigger the trade - i.e. the transaction was self-catalysing! A terse conversation with the broker ensued and I was told that the transaction was the result of human error - the trade was duly reversed.

But it got me to thinking - who has access to read the database of stored conditonal orders and how do brokers prevent/track the obvious potential for serious abuse and manipulation of these orders?

Any wisdom/insight appreciated ...

17-07-2011, 02:31 PM
Perhaps a member from Direct could shed some light on this for you? There must be some standard prescribed NZX rules that have to be followed...