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Vanguard Warning II
Old 04-15-2007, 08:55 AM   #1
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Vanguard Warning II


RussianVanguard Roulette
I didn't want to hijack SoonToRetire's topic. Chinaco thinks that wound was self-inflicted, maybe so. But heres the thing... when trading online one needs to be (and feel) certain that your intentions match your keystrokes. No broker is involved that will ask or warn you of potential adverse outcomes. Heck, there are enough adverse outcomes in the market itself, Vanguard policy written or otherwise adds to the gamble.


My tale concerns Vangourd Brokerage Services, VBS. For several months I had been following BPT (down) looking for my entry point. I placed an online Limit Order at $67.00 and as usual, just before market close I was wearing the Enter key out watching the bid/ask changes. My order had not executed but the bid reached $67.00 for a few breathtaking seconds before going back up at the close. Not wanting to leave any money on the table overnight, I tried 3 times to cancel the order. The system told me cancellation is impossible since the order had expired.

THE NEXT DAY
With morning coffee at hand, I fired up my account and find that the trade had indeed executed after hours. I'm getting that bad, you-don't-know-what-you're-doing feeling. I like to think I have some control over what amounts to the underpinnings of our ER future. Curiously, I have two unanswered phone calls from Vanguard. Well, I'm busy. I'll call back later, probably not important since I've never received a call from Vanguard that was important.

Later, checking the portfolio, I see that BPT is down, down, down. Time to saddle up the high horse and find out WTF. One of my non-specific messages is from a VBS manager, so I call him. He informs me that, "the market always does the right thing". He said that about a hundred times. Heres what happened:

The was trade executed after hours.
Vanguard was notified.
Vanguard saw my online attempts to cancel.
Vanguard called me wanting to discuss the trade. I wasn't available.
They booked it.
Two days later. I want out.
No dice.

I really want to feel in control when making online investment buy/sell decisions. Thats it. Its a very important fundamental. I think that if they had the option to book it, they can reverse it.

What really lit my fire was this no-load oops wrong metaphor, cold hearted ba*tard had the nerve to say that, "if the stock went up we wouldn't be having this conversation". Wrong! We'd still be having the conversation, but without the yelling. So ultimately he emails me the address of the VBS arbitration board.

So I wrote the letter. No response yet. I call once per week and since the stock is now about $67, here is what I want them to do.
Sell my position at the same price as purchased and charge me no commission for the buy or the sell. Then explain to me exactly what happened so I can prevent this from happening again.

Now I'm watch this stuff like a hawk. Thursday I had another limit order cross the ask price and go up again. No trade this time. I didn't cancel just to see what might happen. Nothing happened. I thought the market always did the right thing?


No justice, no peace!






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Re: Vanguard Warning II
Old 04-15-2007, 09:18 AM   #2
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Re: Vanguard Warning II

It sounds like VBS is a real joke. (being polite) The market always does the right thing. Say what?
I'll assume you must enter an afterhours order separately or at least take some action to indicate that an AH fill is OK.
If so and you didn't, then it's simple--they didn't follow your instructions and they need to drop the trade. Arbitration That's BS
The market always does the right thing.. Even deeper BS
I've had a few badly executed trades by Scottrade and ET in the past, and they have always fixed them within 24 hours.
Go git um BUM
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Re: Vanguard Warning II
Old 04-15-2007, 09:31 AM   #3
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Re: Vanguard Warning II

"THE NEXT DAY
With morning coffee at hand, I fired up my account and find that the trade had indeed executed after hours"

Isn't this the issue _ That the order was executed in the after hours market not normal trading hours?

Normally when I enter a good until canceled order it is only in the market I enter it - normal or after hours.

I'm assuming you didn't enter your order in the after hours market.

Is this the route you are going?

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Re: Vanguard Warning II
Old 04-15-2007, 09:34 AM   #4
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Re: Vanguard Warning II

I use ETrade for my (few anymore) online stock trades, and their limit orders are for the day only -- at least that's what I've assumed. I'm surprised that a day limit order could execute in the after hours market but, as I said, I don't do much online trading any more.

My pet peeve when I did do a lot of online were the stop loss orders I would place several percentage points below the current price. Many times I would find that the price had not changed much but I had been stopped out. When I went in to check, I would find one small blip where the "price" had dropped down instantaneously to pick up my stop loss then magically shot back up. That's about when I decided the system is rigged, and I no longer entered stop loss orders, instead I would just watch the market. Finally decided this is not the way I wanted to spend my time, so just pulled out altogether. The market is always right, even when run by crooks.

By the way, since "The system told me cancellation is impossible since the order had expired," and Vanguard tried to call you, it seems clear that you did try to cancel the order, and Vanguard knew you had tried to cancel the order. Instead of canceling the trade, they chose to execute it at a loss. I think you have a good case, much better than mine, because you had some proof. Heck, even ETrade canceled some of my orders in some unusual situations. I just think Vanguard is a low fee low service operation, nothing wrong with that until they equate low service with incompetent service.
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Re: Vanguard Warning II
Old 04-15-2007, 10:00 AM   #5
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Re: Vanguard Warning II

I have found that Vanguard's policy in most situations is "We won't cancel anything done online". After I heard this, I always go through a phone conversation now. This gets me warning when I might have to get a redemption fee, PLUS they record all phone calls. This makes it easy to fight in the future.

I'm not sure if they charge more to execute a stock trade online though, with their funds they don't. [just looked, $25 for online vs $45 for broker assisted. Unless you are a voyager client or have a really good reason, I'd highly recommend doing your stock trading in a discount broker. I've never had issues with cancellations at TDW or Etrade]

My recommendation, start inundating them with phone calls for anything you want done. No more of this web-based BS.

I'm glad that luckily your stock went back up and you can get out with just a commission though! whew
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Re: Vanguard Warning II
Old 04-15-2007, 10:04 AM   #6
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Re: Vanguard Warning II

BUM,

Did you enter the order as "Day" or GTC (good-til-canceled)? Your post doesn't make this clear.

Did VBS ever tell you the exact time of the trade?

If you entered the order as a "Day" order, and the trade time was after 4pm, it would seem to me that you would clearly be "off the hook".

If you entered it as GTC, then I would have to assume it got executed between 4pm and the time you tried to cancel, although I'm still bothered by the fact that the Order Status screen still showed the order as open rather than executed.
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Re: Vanguard Warning II
Old 04-15-2007, 10:15 AM   #7
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Re: Vanguard Warning II

Quote:
Originally Posted by SoonToRetire
My pet peeve when I did do a lot of online were the stop loss orders I would place several percentage points below the current price. Many times I would find that the price had not changed much but I had been stopped out. When I went in to check, I would find one small blip where the "price" had dropped down instantaneously to pick up my stop loss then magically shot back up. That's about when I decided the system is rigged, and I no longer entered stop loss orders, instead I would just watch the market. Finally decided this is not the way I wanted to spend my time, so just pulled out altogether. The market is always right, even when run by crooks.
Interestingly, I would see the exact same behavior, but at a different broker. I honestly think they expose their order books to the outside market, and somehow this is "gamed". I'm not sure exactly how it is done, but odd that I've noticed it as well. I assume it is market makers doing something fishy (or internal matching at the brokerage)...
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Re: Vanguard Warning II
Old 04-15-2007, 10:35 AM   #8
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Re: Vanguard Warning II



This was a DAY order and I can't find out the exact time of trade. The smoking gun here is that Vanguard called a few times. They insinuated that the purpose of those calls was to ask if I wanted the Buy. I believe someone can undo this.

Now the dividend is in the mix. If they undo it, what about that? :P


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Re: Vanguard Warning II
Old 04-15-2007, 10:56 AM   #9
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Re: Vanguard Warning II

Quote:
Originally Posted by BUM
This was a DAY order and I can't find out the exact time of trade. The smoking gun here is that Vanguard called a few times. They insinuated that the purpose of those calls was to ask if I wanted the Buy. I believe someone can undo this.

Now the dividend is in the mix. If they undo it, what about that? :P
I think the time of the trade is the key.

If it was a day order it should have been canceled at 4pm, and there would have been no reason for them to call you. Even if they did call, it would have been as a courtesy to you. If they couldn't get in touch with you, the default should have been let the order expire at 4pm, since that was the way you entered it
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Re: Vanguard Warning II
Old 04-15-2007, 01:07 PM   #10
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Re: Vanguard Warning II

Sometimes trades are reported late, expecially from the minor exchanges,
especially during market close. Even the major exchanges are still reporting
trades 3-5 minutes after market close, sometimes a few drift in much later
than that (trades that are reported late carry special flags on them at the
raw data level). Your broker will not know that your trade has (or has not )
executed and will not know the actual time of trade (although there will be
a reported time of trade, sometimes this time is not accurate either).
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Re: Vanguard Warning II
Old 04-15-2007, 01:10 PM   #11
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Re: Vanguard Warning II

Quote:
Originally Posted by BUM
My tale concerns Vangourd Brokerage Services, VBS.
VG is not perfect. I had an issue with VG. My situation was related to someone they partnered with. They made a mistake and did not make a trade in a VA. I got the run around for several weeks from the call center. I finally called headquarters and spoke with a SVP of Marketing. Told him what happened (I will not describe it here) and threatened to write the board and CEO. He was caught off guard and was a little defensive. Long story short, they gave me the better of the prices. The prices when I requested the trade or the current trade price.

From my perspective... I have not found a better low cost option. The mistakes have been very few and far between.

VG partnered with Pershing for brokerage services. I used VBS when I owned individual stocks. I am not sure who's system is used to facilitate trades. Just because you login to VG does not mean it is their system. They probably just front-end it.
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Re: Vanguard Warning II
Old 04-15-2007, 02:03 PM   #12
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Re: Vanguard Warning II

Quote:
Originally Posted by chinaco

From my perspective... I have not found a better low cost option. The mistakes have been very few and far between.

VG partnered with Pershing for brokerage services. I used VBS when I owned individual stocks. I am not sure who's system is used to facilitate trades. Just because you login to VG does not mean it is their system. They probably just front-end it.
Pershing (Bank of NY) is still the clearing house. I liked the idea of one stop shopping. Except for a few bank CDs all my accts. are at VG. I'm not so sure anymore.


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Re: Vanguard Warning II
Old 04-15-2007, 02:55 PM   #13
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Re: Vanguard Warning II

Quote:
Originally Posted by SoonToRetire
My pet peeve when I did do a lot of online were the stop loss orders I would place several percentage points below the current price. Many times I would find that the price had not changed much but I had been stopped out. When I went in to check, I would find one small blip where the "price" had dropped down instantaneously to pick up my stop loss then magically shot back up. That's about when I decided the system is rigged, and I no longer entered stop loss orders, instead I would just watch the market. Finally decided this is not the way I wanted to spend my time, so just pulled out altogether. The market is always right, even when run by crooks.
I've had this happen, too, with a stop-loss around 7% down. There were 300 shares traded at that price, which was the low of the day, and they were all mine. I always put it down to the NYSE specialist being able to see the native stop-loss orders. Either that, or my broker was trading against me. Either way, it sucks.
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Re: Vanguard Warning II
Old 04-15-2007, 03:24 PM   #14
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Re: Vanguard Warning II

The order that I have seen are Day, Day+ext, GTC, GTC+ext....

If you had not done the ext and it did trade after hours you have a case...

But, the market can move quickly on some stocks if there is not a backlog of orders... so if you put in a stop loss that is close to the current price, you always have a chance of getting bought out... don't do it unless you have at least 5% below market...

Look at almost any stock.. the days range is usually 'wide'... maybe a percent or two up and down if the whole market is moving... so I don't feel sorry for anybody that puts in a GTC order that gets completed if the market goes there...

AND, you might have a buy as a GTC and not get it if there is someone in line before you with the same price!! There might have only been 100 shares traded at that price and you were not the lucky one... again, this is the market...

If you are so worried about a few cents per share, then don't buy stock...
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Re: Vanguard Warning II
Old 04-15-2007, 08:23 PM   #15
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Re: Vanguard Warning II

Anytime you have an order that won't cancel online - for any reason, call the broker. They will not charge you for the transaction and it will be recorded on tape. I've had transactions show up weeks later after problems canceling them online ( and saved my a$$ because I followed with a call). Stop orders are handled differently by different brokers. Some stop loss orders are visable and will get picked off if anywhere near the current price. Do not use stop loss orders, unless you can get your local software to mimic one.
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Re: Vanguard Warning II
Old 04-15-2007, 08:25 PM   #16
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Re: Vanguard Warning II

This story may be just what you are looking for:
http://tinyurl.com/37nvxc

Should that URL fail you, the story is 4 ways to fight your broker and it's at cbs market watch.
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