Q: Hi Peter, Ryan and Team,
Since I do not have access to a computer or smart phone at work, I do all my buy or sell transactions in the evening from home after the market has closed through TD Direct Investment.
So on Thursday Jan 25, 2018 I decided to buy Intuitive Surgical Inc. symbol ISRG in the U.S. because of its recent momentum. The closing price was 449.81 and the high price for the day was 452.00. Since I was dipping my feet in with a very small position of only 2 shares I placed my order with a limit price of $454.57 i.e. $2.57 per share higher than the high price of the day. I have found that this eliminates missing out if the stock opens higher the next day.
The next morning i.e Friday Jan 26, 2018 on my first break at work approximately 10 am I saw that I had a missed call at 8. 20 AM from TD but there was no voice mail message. So I called them and a TD agent told me that my order for 2 shares was cancelled by TD before the market opened because “ my limit price was too aggressive since ISRG was going to open lower at 437.37 ”
My understanding was that in such a situation my limit order would have changed to a market order at market open at 9.30 AM and should have been filled at the lower price. Because there is no way for most investors to predict that a stock is going to open much lower the next day.
The TD agent was unable to tell me what the threshold is to constitute “a too aggressive bid price”. Since I still wanted to buy the shares he manually put in the order for me and charged me $43.00 for the trade instead of my regular online rate of $9.99.
I would appreciate if you would advise me the reasons for and the ways to avoid such a situation in future without calling in to TD each time I place a buy order. Thank you in advance.
Frank
Since I do not have access to a computer or smart phone at work, I do all my buy or sell transactions in the evening from home after the market has closed through TD Direct Investment.
So on Thursday Jan 25, 2018 I decided to buy Intuitive Surgical Inc. symbol ISRG in the U.S. because of its recent momentum. The closing price was 449.81 and the high price for the day was 452.00. Since I was dipping my feet in with a very small position of only 2 shares I placed my order with a limit price of $454.57 i.e. $2.57 per share higher than the high price of the day. I have found that this eliminates missing out if the stock opens higher the next day.
The next morning i.e Friday Jan 26, 2018 on my first break at work approximately 10 am I saw that I had a missed call at 8. 20 AM from TD but there was no voice mail message. So I called them and a TD agent told me that my order for 2 shares was cancelled by TD before the market opened because “ my limit price was too aggressive since ISRG was going to open lower at 437.37 ”
My understanding was that in such a situation my limit order would have changed to a market order at market open at 9.30 AM and should have been filled at the lower price. Because there is no way for most investors to predict that a stock is going to open much lower the next day.
The TD agent was unable to tell me what the threshold is to constitute “a too aggressive bid price”. Since I still wanted to buy the shares he manually put in the order for me and charged me $43.00 for the trade instead of my regular online rate of $9.99.
I would appreciate if you would advise me the reasons for and the ways to avoid such a situation in future without calling in to TD each time I place a buy order. Thank you in advance.
Frank
