Do trading platforms have liability for failing to execute order?

BrokenArrows

Do trading platforms have any liability for failing to execute an order which may result in a loss?

Ive been trying out Degiro since they opened a Forum on boards and have been having plenty of problems, the latest of which is failure to execute a sell order.

Anyway i put a GTC order in two days ago and today the order price exceeded my asking price but my Sell order was never executed and remains outstanding on the platform.

If customer support fail to resolve the issue and the price falls below my original asking price are they liable for my loss?

Its not big money but im just curious about trading platforms responsibilities.

ixus

Almost 100% no liability though I have no knowledge of Degiro. Maybe ask in that forum?

It will likely be in the T&C's of any broker, spreadbet firm or FCM.

Cathbadhian

No, they're not liable. You need to understand that Degiro would (presuming total innocence) have acted to send the order, but they cannot guarantee a buyer will be found at or above the limit price. The price may have fallen rapidly on the day - perhaps your stock's liquidity is not very good which may indicate volatile intra-day prices. You can judge liquidity by examining the bid/ask spread and it tends to widen in August as one of the main vacation months (lots of traders just sit the market out and relax on beaches ).

In essence, no limit order is ever guaranteed to execute even if the limit is hit. Not particularly obvious, but understandable if you remember that you need an actual willing buyer on the other end of any transaction.

BrokenArrows

Cathbadhian wrote: »

No, they're not liable. You need to understand that Degiro would (presuming total innocence) have acted to send the order, but they cannot guarantee a buyer will be found at or above the limit price. The price may have fallen rapidly on the day - perhaps your stock's liquidity is not very good which may indicate volatile intra-day prices. You can judge liquidity by examining the bid/ask spread and it tends to widen in August as one of the main vacation months (lots of traders just sit the market out and relax on beaches ).

In essence, no limit order is ever guaranteed to execute even if the limit is hit. Not particularly obvious, but understandable if you remember that you need an actual willing buyer on the other end of any transaction.

Yes I'm aware of all that. The problem seems to have been that the particular shares I'm trading in are OTC and DEGIRO didn't have access to the market makers that performed the trades above my selling price

Cathbadhian

Understood. In that case, I don't see Degiro having any liability, though I would see it as a cause of concern in need of further research, i.e. how does Degiro compare to non-discount brokers for market maker access? If Degiro are a liquidity drag, they may not be the best broker for this - low fees or not.

BrokenArrows

Cathbadhian wrote: »

Understood. In that case, I don't see Degiro having any liability, though I would see it as a cause of concern in need of further research, i.e. how does Degiro compare to non-discount brokers for market maker access? If Degiro are a liquidity drag, they may not be the best broker for this - low fees or not.

Ya I'm not sure how they compare to other providers. They don't seem to publish any details regarding the share of market makers they have access to. But I suppose its the nature of OTC.