Tygerstrike on June 6, 2012 12:47 PM What I dont get is how they can have a disasterous glitch thatscrewed alot of ppl out of their hard earned money, and they arentgoing to give that money back. They will offer discounted tradingfees. This is sheer stupidity. Now the Brokers will make even moremoney by pocketing the difference in the trading fee while chargingthe investors the regular price. |
Talk about SHADY!!!! They aregiving the brokers a discount while the investors who lost themoney because of the glitch get nothing. Talk about a ripoff. Reply davislane1 on June 6, 2012 1:07 PM Maybe someone with more education or experience with the matter cancorrect me here, but it looks like the only people who are reallybeing compensated are institutional traders. For that group, I cancertainly see the benefit of discounted fees.
But what about thenon-business accounts that got stuffed on the glitch? Discountedfees seems a bit lackluster from that side of the fence. Reply MilwaukeeMike on June 6, 2012 2:21 PM yeah, there's a lot going on. So far as I know, only very bigtraders can get in on IPOs, so Davis, you're correct in saying thatonly institutional traders would be affected and would benefithighly from the fee reduction. Tyger, according to other sources I've read, the top broker firmswho were unable to see if their trades went through claim they lostbetween $150 million and $200 million dollars.
It's not 'hardearned money' it's hypothetical money. Bascially the brokers aresaying that if they had known what the trades were doing they couldhave bought and sold FB stock quickly throughout the day and mademillions. I don't understand how, considering the price never wentvery high, but that's the claim. It's not an issue of some average investor losing his saving's,it's some huge brokers who didn't make what they should have if thesystems had been working right. Reply davislane1 on June 6, 2012 3:20 PM @mike Well, the way institutions and large traders are able to makemillions on small moves is through position size.
Same for smallindependent traders (such as myself). For small individuals (themajority of the market) a couple dollar move, or even a few cents,isn't really going to yield you huge profits. However, if you'rebuying up thousands upon thousands of shares in a given position,all you need is a small move in the market to make or lose millionsof dollars (such as the $2 billion dollar blunder over at JPMorgan). It's the same thing that enables large firms to makeso-called risk-free trades.
As for the hard-earned portions of money that were lost... That'swhat my issue is with this compensation package. This plan seems toonly benefit institutional entities and not individuals who mayhave lost several thousand dollars trading their own accounts.Anyone who was having either their investment portfolio or tradingaccount managed by a firm probably wasn't too adversely affected bythe glitch. However, the droves of non-professional traders andinvestors who jumped on the band wagon are the individuals whowould have really been hammered by the glitch.
Reply Tygerstrike on June 6, 2012 3:41 PM @Mike As I understand it the large firms are the ones benifiting from thediscounted fees. But they get their money from their investors. Imyself have an account with a chunk of cash in it and it goestoward a group purchase. Thats where the "Hard earned" statmentcomes in. They take their investors money and pool it then make astock purchase.
Its the little ppl who are getting screwed on thisone. They lose their money that was used for the purchase and theinvestment group suffers no loss as they had none of their own cashin the deal. Then add on the fact that they will be getting adiscounted rate, that they will pocket the difference from thenormal rate they charge the investors. Reply davislane1 on June 6, 2012 3:47 PM ^ This.
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