TFX scores own goal with stop loss
All the talk of chasing stop-loss orders reminded me of an incident I was involved in when I was working for Midland NY and demonstrates that it’s not just the sell side who engage in sharp practices. One afternoon, I was watching a stop-loss sell order for a German client of around $100 million in USD/DEM that really shouldn’t have been any problem. But as the level approached, the market suddenly plunged. I didn’t get anything done at the rate and missed the order by more than 100 pips. It was a terrible fill and it left my old muckers at Trinkaus ranting and raving.
I was baffled by how such a small order could have resulted in such carnage. But after a quick ring around, I discovered the answer. The same order had been left with at least 10 other banks, raising the question of who had been unprofessional – the client or me.
I thought knew what the answer was and so I made a promise to Trinkaus that the next time they left another order from the client, it would get the best fill in the market.