How To Control Broker Order Accuracy - Carl Iverson
Here is a simplified method I use to control broker order accuracy. Before I call my broker, I write the following on an 8-1/2x11 sheet of margin ruled paper:
At the top center, I write my account number. In the body, I write the order information (buy or sell, quantity, exchange, contract month, commodity and price or action). Some of this information, i.e. exchange, isn't necessary in this case - but when it is, there is no question about which commodity I want.
Then I call my broker and give them my name and account number. I then wait until my broker responds. That way I know that they are ready for the order. Next I read the order. This insures that I don't say buy instead of sell or forget some important data. The sequence of this information (buy/sell, quantity, exchange, etc.) is the sequence preferred by the brokers and thus further reduces the potential for error.
When the broker repeats my order information, I don't have to think about what I've said. Instead I just visually check their confirmation against what I have written. In the margin, to the left of the ruled line, I place the type of order, date, time, broker's name and broker assigned ticket number.
If I was dealing with large lot sizes or if I was placing my first orders, I would also tape record my order placement. As soon as I hang up the phone I would replay the conversation and check my broker's confirmation against what I had written.
When some type of action has occurred to the order, I write this information to the right of the vertically ruled line. If the order is filled, I note the price, date and broker. If it's an expired day order, I write expired. If I cancel the order, I so note along with the date, time and broker.
The important point is that each order must at some point had action taken. This is especially true with GTC or good until canceled orders, which if not canceled could cost you a lot of money.
This format enables you to quickly spot any incomplete order status. It also makes it easy to insure that sell orders are covered by buys and that all quantities are accounted for.
I keep all open orders in a 3-ring binder. Once complete, they're removed and filed.
Also, I prefer not to chit chat with my broker when giving him orders. Distractions can lead to errors on their part or mine. If you must shoot the breeze, wait until after you've received and checked your confirmation.
Note: We operate open member forums and
consequently reserve the right to publish some public type of communications
received. Please indicate "confidential" or
"not-for-publication" on any correspondence sent us
which you want kept private. Thank you.
Copyright by Webtrading.com - All
Rights Reserved. Webtrading/CTCN. For comments about CTCN Home
Page design or connectivity, please contact our
Webmaster. This page is maintained by
Webtrading Internet
Services.
