Dealer's Remorse at Schwab

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Topic Author
skepticalobserver
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Joined: Tue Jul 29, 2014 11:29 am

Dealer's Remorse at Schwab

Post by skepticalobserver »

This morning I bought, online with Schwab, a T-bill from the secondary market at 99.867. This afternoon (around 3 pm EST) I got a call from Schwab that the treasury dealer (Schwab was acting as agent for the trade) mispriced the offer. It should have been 99.8845. The Schwab rep called it a “time in the market context” situation (I Googled this and found nothing). Ooops, less interest for me!

Hey, it’s a short term T-bill, so I’ll give the screw up a pass----THIS ONCE.

Has this happened to you?
sport
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Location: Cleveland, OH

Re: Dealer's Remorse at Schwab

Post by sport »

My response would be to tell them that the dealer's mistake is not your problem. You should expect them to honor the terms they offered to you.
Topic Author
skepticalobserver
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Re: Dealer's Remorse at Schwab

Post by skepticalobserver »

sport wrote:My response would be to tell them that the dealer's mistake is not your problem
This did cross my mind after I lectured the rep. However, I thought I'd bank some goodwill. Although most everything I do is perfect this might help in my once-in-a-lifetime mistake.
jfave33
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Re: Dealer's Remorse at Schwab

Post by jfave33 »

skepticalobserver wrote:
sport wrote:My response would be to tell them that the dealer's mistake is not your problem
This did cross my mind after I lectured the rep. However, I thought I'd bank some goodwill. Although most everything I do is perfect this might help in my once-in-a-lifetime mistake.
Unfortunately 'Schwab' is a company with lots of people involved. They do no have a file on you that says this guy did a good thing so help him out next time. There is no goodwill - you just let a mistake go that you shouldn't really have. They should honor the deal or at the very least let you unwind it if you decide it is not worth it any more.
GoldenFinch
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Re: Dealer's Remorse at Schwab

Post by GoldenFinch »

The only weird thing that happened to me using Schwab was when an automatic investment in a Roth IRA went through even though there was no more money left in the account to invest (usually it just doesn't go through). So they took the money from MARGIN (I have NEVER bought on margin)!

I called and asked them to reverse the trade and the young person (sounded like they were 23 years old) scolded me like I was 12, told me she would do it this time, but never again and that these kind of mistakes happen when one manages their own investments :shock: . It was a ridiculous conversation. The trade was reversed and I turned off the automatic investment (this had never been a problem before, the trade just would not have occurred when no funds were present).
bberris
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Re: Dealer's Remorse at Schwab

Post by bberris »

sport wrote:My response would be to tell them that the dealer's mistake is not your problem. You should expect them to honor the terms they offered to you.
i'm guessing that the 59 page document you (OP) digitally signed when you opened your account allows the broker to correct mistakes.
kaneohe
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Re: Dealer's Remorse at Schwab

Post by kaneohe »

skepticalobserver wrote:................................ T-bill from the secondary market at 99.867. .............................. should have been 99.8845. .................................). Ooops, less interest for me!

..................................................
What is the practical effect of this? I know sometimes the guess I'm given as to pricing is somewhat different than the actual....but the numbers look similar /close to my untrained brain. Perhaps I'm missing something...........
Topic Author
skepticalobserver
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Re: Dealer's Remorse at Schwab

Post by skepticalobserver »

kaneohe wrote: What is the practical effect of this?
.0175 can add up. On $100,000 it's $17.50; with a multiple of that it's a few Chinese dinners.

In the short run, an annoyance. For the bigger picture it makes me wonder. Unlike Fidelity, Schwab does not show the bid/ask or let you do an online sale. Also, unlike Fidelity Schwab charges $25 for the sale.

With the advent of book-entry you're married to the broker.
kaneohe
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Re: Dealer's Remorse at Schwab

Post by kaneohe »

skepticalobserver wrote:
kaneohe wrote: What is the practical effect of this?
.0175 can add up. On $100,000 it's $17.50; with a multiple of that it's a few Chinese dinners.

I..............................
Thanks for that. You're an order-of-magnitude higher than my style so maybe that's why it's never bothered me.
The Schwab guy did seem serious when he said the final numbers were a bit different than quoted and that I could
back out if I wanted.
john94549
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Re: Dealer's Remorse at Schwab

Post by john94549 »

I'd give it a pass. Schwab is basically reputable, and (all things considered) it's basically a hand-wash.
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alpenglow
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Re: Dealer's Remorse at Schwab

Post by alpenglow »

I have no idea of how the bond market trades, however, when I was a full-time NASDAQ trader, that kind of pricing would come nowhere close to a "clearly erroneous" trade, subject to breaking.
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alpenglow
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Re: Dealer's Remorse at Schwab

Post by alpenglow »

I think grok is a professional bond trader. Maybe he will chime in with some insight here.
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