Lose 20K on trading 212 on one trade

joshua5056

Sorry this is a bit long ,  but I really appreciate if any one could help me on this one .  

 I went in for a short trade on trading 212 on my investment account a few days ago .  Saw a huge volume go in to Clover health stock .  Hoping taking a profit with the run .  

1:33pm , I bought in £40k around $18.50 .Set a stop loss at $17.   Mins later the stock drop below $17.  Stop loss order pending , did not execute .  I clicked on it ,  I clicked cancel ,  it did not work .  I clicked on sale order,  it created another market sale order , that means the stop lose sale order did not take effect , otherwise it will say to sale the share , you have to buy it first ,  then both sale orders are pending , literally stuck , I try click on cancel , it just didn’t do any thing .  I couldn’t do any thing .  Live chat with the customer service , they told they have difficulty with their main broker which is I interactive broker .  They are trying to sort out the issue .

   I couldn’t do any thing , my portfolio went down to 38k , then as the share price going up ,  my portfolio went up to 54k ,  at the point ,  I really want to sell , but still nothing is working .  Then my portfolio went down as the share price going down .  More than an hour later ,   The pending order is executed .  My portfolio went to negative 33k , one min later ,  it went to zero .  Then I check on my balance with only 25k left on my balance .  

Then I check on the order history, I bought 3120 shares at $18.50 at 13:33pm .
14:47pm  they have sold my shares which is 3120 shares twice at $ 17 dollars and & 16.61, the market price at that time is around $21.90 ish .  Then to balance it out , at 14:48pm  they bought back 3120 shares at £21.87.    Causing my lose 20k in on hour .    

First of all , it is a cash account ,  my balance can not go to negative .  Their system malfunction ,  should not sold my share twice .   

Secondly :  when they filled my sale order at 14:47 .  The sold at $17  and $16.61 which is not the market price at 14:47.  With out my consent ,  they bought back the share at 14:48 for the market price $21.87.   

The whole time I have no control .  Any one have suggestion to what I should do ?  I would like file a law suit ,  any one can recommend a good lawyer in this field please ??

csgohan4

Assuming this is a genuine, I hope you knew the risks of trading on individual shares.  I learnt my lesson from biotech recently, although I lost a lot less than you have. Haven't lost sleep because it's an amount I could live with.

Gambling significant amounts of money you clearly can ill afford to lose is a recipe for disaster. 

eskbanker

joshua5056 said:

Live chat with the customer service , they told they have difficulty with their main broker which is I interactive broker .  They are trying to sort out the issue .

[...]

The whole time I have no control .  Any one have suggestion to what I should do ?  I would like file a law suit ,  any one can recommend a good lawyer in this field please ??

Best bet will be to let them get on with 'trying to sort out the issue' and if they fail to do so, then log a formal complaint.  If that doesn't resolve the matter to your satisfaction then you have the option of referring it to the Financial Ombudsman Service - if all that doesn't work, then it's unlikely that the law would help you, unless you have evidence of actual negligence, etc....

joshua5056

csgohan4 said:

Assuming this is a genuine, I hope you knew the risks of trading on individual shares.  I learnt my lesson from biotech recently, although I lost a lot less than you have. Haven't lost sleep because it's an amount I could live with.

Gambling significant amounts of money you clearly can ill afford to lose is a recipe for disaster. 

Thanks for the reply . I thought I was being careful ,  I set a stop lose at $17 ,  the most I could lose was around 8%.  But hey, never see that coming . 

joshua5056

eskbanker said:

joshua5056 said:

Live chat with the customer service , they told they have difficulty with their main broker which is I interactive broker .  They are trying to sort out the issue .

[...]

The whole time I have no control .  Any one have suggestion to what I should do ?  I would like file a law suit ,  any one can recommend a good lawyer in this field please ??

Best bet will be to let them get on with 'trying to sort out the issue' and if they fail to do so, then log a formal complaint.  If that doesn't resolve the matter to your satisfaction then you have the option of referring it to the Financial Ombudsman Service - if all that doesn't work, then it's unlikely that the law would help you, unless you have evidence of actual negligence, etc....

Thank you for replying :  I will refer to financial Ombudsman service . 

I do think the system sold my share twice in a cash account  is lack of diligence on their part .  The system should’ve prevent that happened ,   It is like if you have £100 in your account , and you withdraw £100 , it didn’t work the first time , and try again ,  the machine is not gonna give £200 .   

And also bought back the share at whatever price without my consent .  

I think there is a argument there .  

Any how ,  I will give it a try .  Much Appreciated .  

bostonerimus

The real question is whether or not you have learned anything from this experience? If losing 20k makes you stop such trading and start investing sensibly then it will have been the best 20k you spend in your life.

masonic

It is well known and a general problem with stop losses that if the price takes a nose-dive well below the stop loss it can fail to execute. They should be used with caution for smaller, illiquid shares. In this case your stop loss was executed correctly and at the correct price.

The mess around selling shares you did not own and the balancing repurchase is for them to sort out. Hargreaves Lansdown had a similar problem not so long ago and removed the offending trades in people's accounts.

I have no doubts you'll be put back into the position you would have been in if you bought the shares and had the stop loss triggered when they fell below the specified price, i.e. the 8% loss you were expecting.

barnstar2077

Please let us know the eventual outcome.

joshua5056

Deleted_User said:

If short trading is not supposed to be allowed in the account (I don't know 212's terms), then they should be removing the second sale (which took the account to a short position) and the subsequent repurchase from your account.

You will probably have less luck arguing about the price of the first sale (at $17.00). Where did you get the "market price" from to compare? (Note that many price sources are lagged.)

Setting a stop loss doesn't exactly limit your losses, because it may execute at a lower price than the "limit" you set.

Thank you for replying: trading 212 have three trading account, one is ISA account, one is CFD account. One is investment account which is the one I was using,  it is cash account,  you basically buying the shares , no shorting in this account.   

8th of June , The stop loss sale kicked in 14:41 when the share price fell below $17 dollars.  But it was pending, when the system finally worked at 15:47 , the stop loss order is finally filled at $16.99 , but at that time the market price is around $21.30 to $22 dollar , the funny thing , they sold my share twice at 15:47. At price of $16.99 and $16.61. But 15:48 , they bought back the sale at $21.87.    This is where I have a problem, first of all,  it should not been sold twice,  secondly it is filled at the same time, the sell price is significantly lower than the buy back price.  

I understand Stop loss will not guarantee the sale price, it  could be lower than the price you set. 

Thank you for the advice !

joshua5056

bostonerimus said:

The real question is whether or not you have learned anything from this experience? If losing 20k makes you stop such trading and start investing sensibly then it will have been the best 20k you spend in your life.

Oh I learned a lesson, I am not trading for quick money any more, I will just do fundamental analysis and invest long term from now on .  

 

Thank you very much . 

joshua5056

barnstar2077 said:

Please let us know the eventual outcome.

Will do, at the moment talking to a solicitor . Will discuss details later on .