"To err is human; to forgive, divine," says English poet Alexander Pope. Perhaps he had stock brokers in mind. Well, probably not, but they do make mistakes. For instance, you might receive a cancellation notice on a trade. This document will explain that there was an error made on some trade and detail what is being done to correct it.
As just a couple of examples, let's say Dick Doright places an order with his broker Joe Trader to buy 400 shares of Get It Right Inc. Joe is in a big hurry that day and mistakenly buys Get it Wrong Inc. Dick will receive a cancellation notice describing the error and Joe will then place the correct order. If the price of Get It Right has gone up in the meantime, Joe Trader will have to eat the difference between that and the original order.
Or let's say Joe Trader continues to have a bad day and purchases 1,000 shares of a stock for Sam Doright, instead of his requested 900. Joe will have to issue the cancellation and sell the extra 100 shares at his own expense.
Since errors are common even in the electronic age, the Securities and Exchange Commission (SEC) established rules in 2009 requiring that reviews of trades must take place within 30 minutes of the trade and be corrected within 30 minutes of the review process.
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Finance: What are Limit Order, Sell Limi...7 Views
Finance a la shmoop what is a limit order? you want to sell a thousand shares
of Colonel electric it was demoted after they cut their dividend the shares have [Scissors cuts dividend in half]
been trading wildly between $15 and $25 a share you don't want to feel like a
moron for having sold them at fifteen bucks when six weeks later they kissed
25 with tongue so what do you do well you put in a limit order that is you put
a limit of a minimum price of 25 bucks a share for Colonel Electric such that [Pile of stocks appear]
those shares will simply sit in your account unsold maybe forever until
somebody out in the wild blue yonder of Stockland is willing to pay twenty five [Woman standing at a colonel electric stand]
dollars or more for the shares where you have a minimum price limit of 25 bucks a
share in your order so here's to hoping they sell and don't get further demoted [Man carries stock into car]
Sargent Electric is just a place you don't want to go
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