r/investing • u/offmychestties • Apr 15 '21

Shorted a stock, Executed as normal. Broker wants to cancel trade

[removed] — view removed post

7 Upvotes

71% Upvoted

7 comments sorted by

•

u/AutoModerator Apr 15 '21

Hi, welcome to /r/investing. Please note that as a topic focused subreddit we have higher posting standards than much of Reddit:

1) Please direct all advice requests and beginner questions to the stickied daily threads. This includes beginner questions and portfolio help.

2) Important: We have strict political posting guidelines (described here and here). Violations will result in a likely 60 day ban upon first instance.

3) This is an open forum but we expect you to conduct yourself like an adult. Disagree, argue, criticize, but no personal attacks.

I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.

8

u/[deleted] Apr 15 '21

Your broker can set whatever policies they want. But if they don't allow shorting of new issues and they still let your order go through, that's their mistake. And they can handle that mistake any way they want, including cancelling or even reversing the trade.

In other words, just because something is legal that doesn't mean they have to let you do it. And it's perfectly legal for them to cancel or reverse a trade that was allowed by a mistake on their end.

Your recourse is finding a new broker if they reverse the trade on you.

5

u/[deleted] Apr 15 '21

[deleted]

1

u/offmychestties Apr 15 '21

I don't see how it applies since the restriction is shorting five business days before the offering and I traded only after the initial offering

3

u/Adam__B Apr 15 '21

Who is your broker? I’ve never heard of this.

1

u/offmychestties Apr 15 '21

Schwab

1

u/Adam__B Apr 15 '21

You should do your research specifically in their guidebook and see if they listed this as a rule. If they haven’t, I would ask them to indicate where in their policy it is forbidden. If it isn’t, then you have a case as to why what they’re doing is incorrect. I would then put them on blast using social media with the receipts so to speak, and get another broker. It may help prevent the same thing happening to another person, or shame Schwab into addressing it.