Yes that is a massive number and no doubt caused enormous stress for both the trader and the institution, which most likely used to employ him! Yet this is the kind of risk – what is called “execution risk” – that comes with placing orders live in the market. It is part of daily life for us and has been for almost 20 years for me.
Imagine, this could happen any day of the week, even to you!
This was the story on Bloomberg this morning – a genuine mistake that could have cost a dollar amount bigger than the entire Swedish economy!!! Up until now, there really have only been two ways for you to place trades in the market. Either over the phone, with a full service broker, or online yourself.
Full Service Brokers
Typically, you will pay a higher fee for this kind of facility – 1% or $85 being about the standard rate in this space. The advantage is you say what you want over the phone and the broker then has his DTR (designated Trading Representative) place the order on your account. All pretty straightforward, but quite expensive for the more active clients. Further to this, there are counterparty risks too – think back to what happened in the GFC where several full service broking shops folded.
Cheap Cheap Cheap – which is a major attraction for many traders. Except when you have a problem and need to pick up the phone, in which case, cheap becomes dear. The reason for the low cost – you wear all of the risk – execution and trade risk – place it wrong – well that is your problem. Over the years, I have lost count of the number of traders I have met or heard, where they have bought instead of sold, entered the wrong price, traded the incorrect instrument or got their quantity mixed up. Sadly, these days, as trading platforms try to provide more and more features, for their users, the prospects for this kind of error becomes ever greater. Worst still, is that the type of errors I have mentioned above, can cost literally thousands of dollars and more!
How can you enjoy the benefits of lower brokerage and avoid the pain of execution risk?
This year, we have rolled out our EasyTrade App. This is something we had custom designed and patented to assist our clients in getting that balance right – that is the balance between control for our clients, lower costs for them trading and zero execution risk. On the other side of the ledger, for us, this has meant clear and direct client orders, with all the trade parameters clearly provided, enabling us to provide an even better service.
The outcome is a full service solution with all the details and basis for the trade provided for the client, at extremely competitive brokerage rates. In short, this is a genuine Win/Win for all parties, like any great service should be.
Let me show you how EasyTrade works
So as you can see it really is very straightforward to place your trades. We are now also offering an even broader range of strategies for our clients, so that you can find the mix that best suits you. If you would like to find out more on how you could be using EasyTrade CLICK HERE.
Also, keep an eye out over the next few weeks as we announce a new partner service, designed to help you get the most out of your investments.