Ever wonder if option trades are reversed due to "misreported" news stories? – Answer is no, in this case, we will be treated like the "mere mortals" we are.
It’s Good To Be The King
Courtesy of Adam Warner at Daily Options Report.
Exclusive Daily Options Report photo here of Bill Gross getting word from the Fed about the Frannie bailout.
But for the rest of us mere mortals, what happens when we actually make a mistake?
Like yesterday in UAUA. Apparently it was the Florida Sun Sentinel, "broke" this 6 year old United Airlines story.
Pretty stunning for anyone caught in it.
And sometime between the trading halt and re-open, my trading system blipped by that all option trades from the time period in question will stand.
Which on the surface seems unfair. But in practice, not sure the Options Clearing Corp (The O.C……C) had a choice. As a general rule, I would say there’s a chance trades executed during a computer glitch of some sort may get busted. Just thinking out loud here, but I remember on the AMEX there were times when our screens froze in price, while counter parties could still execute trades against those stale markets. That sort of thing might get busted, although if a bust hoses a "customer", they do think twice. But that’s neither here nor there, my point is that if there was some sort of Exchange technology causing the errors, they may very well bust out.
This United story had nothing to do with technology though, it was a misreported story. An exchange and the OCC will never bust trades under those conditions, frankly because it’s a terrible precedent. It’s very unfortunate many lost a bundle on this, but unless the Florida Sun Sentinel offers to make everyone whole, nothing will happen. In other words, nothing’s happening.
