Technical Issue: Bought Share Amount miscalculated.

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1

Hi Trading 212 Community,

I hope you are having a good day.

8th of January 2021 I bought 15,000 Euro worth of shares on the market opening ticker symbol $IVFH. The order was pending for quite some time until after 9 minutes of market opening 15:39 (+1 GMT Amsterdam). The amount of shares showed me 38,668 which was completely overbooked showing an €20,346.11 initial investment in the stock which should’ve been 15,000 euros to be exact because that was all I had in my free funds at the time. I took a screenshot of the matter. (Knowing this had to be a technical issue that immediately seemed odd.)

7 Minutes later the amount of stocks I had bought seemed to be fixed back to 15k initial investment. Which then showed me 21,939 shares on my account. (Look at the second screenshot included).

$IVFH dropped 20% later that day and I was willing to sell my $NAKD shares in order to lower my Average cost basis on $IVFH however the sold stocks as I described in the chat earlier with Mihail and Mario were lost in a ‘$0,00 Free funds’ on my account.

Looking at this situation as you’ve described it in your support response, it seems that right now there are 16.729 shares lost that are not shown on my account because my initial investment was 15k not 20k as seen in the difference between the two screenshots.

There currently shouldn’t be a debt on my net cash since those 16,729 shares of $IVFH aren’t on my account and I never had paid for them in the first place, the T212 system must have mistakenly done so.

I even tried adding 1 dollar from my bank to the portfolio to try and see if that would ‘un-glitch’ the net balance on my account but didn’t work.

Now we’re 3 days further and still no clear update on this matter. Other than an email response explaining the the overly booked shares was my mistake. –

Trading 212 on the matter.
“After carefully reviewing the matter, I would like to inform you that the reason behind the fact, that you are not seeing the free funds is because you have more money invested in your positions than net cash. Hence this, profits are staying locked until those 2 values are evened out.”

I would like to shine light on this case through the community forums since it has been bothering me all weekend.

To the T212 team I friendly request to please make sure to really look further into this matter since I have a clear evidence of the technical issue that happened Friday the 8th due to the high demand of the $IVFH stock being purchased in bulk. Right now I am missing the earned money from my $NAKD stock which I would prefer seeing back in my account by the start of the upcoming trading week.

Thank you all very much for your time and I hope this matter will be solved as soon as possible.

Best regards,

Neptune

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2

I think I understand.

You wanted to buy ~€15,000 worth of shares and set a market buy order.

The price gapped up (from ~0.4 near ~0.84) and the order was filled to you got 38,668 for €20,346.11 rather than ~€15,000.

The system I assume then automatically sold 16729 immediately so you weren’t €5k+ in debt.

I think this is the key reason you can’t place more than 95% of free funds to allow for market orders where you get it filled much higher than anticipated.

@Rumen can you help?

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3

I think the issue isn’t what happened, rather his account still has the debt in it even though it should have been cleared, but I’m struggling to understand what happened.

@Neptune if you go to withdraw funds, it will tell you how much you have available to withdraw and restricted funds. Maybe this will show your negative balance to see what it looks like.

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Thank you for helping me out guys! Yes indeed the account shows -$206,96 and is glitching between that number and $0. I wonder where this debt is coming from since I placed the market order of $IVFH exactly on 15k.

5

Did you place a value order of 15k, or did you place a market order (whatever shares it showed could buy with ~15k) ?

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I placed a market order which in that time seemed the fastest way to get in. I already solved the issue by taking the 206 loss :frowning: Thanks for your help guys

7

I think I spotted @Rumen typing on this earlier so he might be able to help confirm what went on.

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@Neptune When you place a value order, it specifies the number of shares that correspond to the value you have input at the time when the order has been created. As @phildawson pointed out, there is a 95% limitation on the amount of your free funds that you could invest via a single order. The reason is simple (this applies mainly to market orders) - between the time you place the order and the actual fill, the price could change drastically.

Again, I must say that the explanation of @phildawson is pretty accurate. Between the time you have submitted your order (14:32:53 GMT) and the actual fill (14:38:11 GMT), the price has risen by roughly 0.4 USD. It was a market order and in most cases, if you do not have sufficient funds, the order gets rejected. However, in this case, IB had already routed the order for execution and by the time it got filled, its value was drastically higher than the one you have input when you created the order.

As you can see in the order history tab, our system has sold a substantial part of your exposure to prevent you from going into a negative balance. Nevertheless, there was still a discrepancy until your last sale.

Bear in mind that OTC stocks are quite volatile and low liquidity, as well as extreme volatility, often accompany the execution of the orders. There is no guarantee of what price you would get if you use market orders when investing in such instruments.

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Whilst the explanation is correct, why should customers lose money on the spread from poor systems of t212 and IB?

The reality is that through no fault of the customer’s your system has allowed a significantly higher order through than should have been possible and then to compound the issue the forced sale on such a stock is at a significant spread. T212 does not benefit from that spread but it isn’t the customer’s fault in the first place.

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Without defending T212 theres not anything they could do or even Interactive Brokers once the order is sent to the exchange.

With a market buy you are essentially saying I want 38,668 shares at whatever your best price is. The order gets completed and that’ll be 20k thanks

T212 then goes hold up you only have 15k, we’ll need to sell 5k of 20k worth immediately to recoup the loss.

The only thing T212 could do is either be very nice about it and give a grace period for providing the additional funds before it auto sells. Obviously that would be a huge risk to the business. I’m not sure but I think negative balances need to be rectified same day as a FCA rule.

T212 could certainly add a warning “are you sure blah blah” for any market orders placed before open. That would save retails customers a lot of money where they haven’t realised there is a pre-market, or that yesterdays ask won’t be what they get.

If T212 had access to pre-market then they could potentially detect massive gap ups and down too.

If @Neptune had placed a value order of 15k instead then T212 does handle this and would arrange exactly that, and would have got the ~22,000 shares and whatever fraction.

If they had used a limit order of say 0.5 instead then it just wouldn’t have filled (unless it came back to that).

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