2

Suppose I placed a buy order for a stock, and my stock brokerage firm told me that the order was executed. Is it ever possible that I fail to receive the shares even though the order was successfully executed? In other words, is it possible for an order to succeed, but for the settlement to fail? If so, how does this situation occur? Would I receive a refund for the amount that I paid for the shares?

Improve this question

2 Answers 2

Reset to default
3

Stock exchanges in the US have T+2 settlement, which means that when you buy stock it's actually delivered to you (or more usually your brokerage account) two days later. Occasionally the counterparty turns out not to have the stock, and the trade fails. This isn't your broker's fault and is typically due to some internal glitch at the selling broker, like the stock was lent to someone who was shorting it and didn't return it in time.

They're moving to T+1 probably later this year which should make trade failures slightly less common.

Improve this answer
1

It's possible that your broker could tell you that your order was executed when in fact it was not. In that event, they'd notify you of the error and you would not get the shares (busted trade).

In the bigger picture, the markets have rules regarding trades. The Clearly Erroneous Transactions Policy might be applicable in some situations.

Improve this answer
3
  • "It's possible that your broker could tell you that your order was executed when in fact it was not." — Why are brokers allowed to do that? Aren't the brokers lying to their clients if they do that?
    – Flux
    Commented Oct 14, 2022 at 0:26
  • 4
    Is human error lying?
    – Bob Baerker
    Commented Oct 14, 2022 at 16:10
  • 1
    Remember that they don't make money unless the trade goes through. They have no reason not to execute. But errors occur.
    – keshlam
    Commented Mar 1, 2023 at 16:38

You must log in to answer this question.

Not the answer you're looking for? Browse other questions tagged .