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Everyone makes mistakes, but I certainly hate it when I am the object of the mistake. This past week, I had placed a stop on my expensive shares of Google (GOOG) with a one triggers other (OTO) order to buy to close my covered calls on the stock in the event the stop was hit and the shares of GOOG sold. In that way, I would be out of the stock position in the event it dropped to my stop and I would have closed the covered call position automatically. Slick.

Monday morning, when I opened my account on the broker's website I was shocked to see that they had given away 100 shares of my $470 Google stock. That's right, it showed a sale of 100 shares of GOOG at $0, zip, nada and a buy to close my call position at over $65 a share as well. I am reasonably well off and I do give to charity, but I had no intention of giving away $47,000 that morning.

I phoned my broker immediately and they promptly busted the trade of my GOOG shares, but the buy to close of the covered calls remained. I called again and asked that the BTC (buy to close) trade also be busted. Shortly thereafter I got another email advising that they had bought yet another contract to close the call so now instead of being short a call, I owned a call. I went from owning 100 shares of stock with a covered call to owning no stock (my shares were reported to have been given away) but owning a contract of calls. Each of my phone calls was answered by a different polite, business-like but unapologetic person. The problem was corrected within a short time and my heartbeat gradually returned to normal. Shortly after the problem was fixed, I received a pleasant email from a VP apologizing for the problem. My broker was decidedly professional throughout as I would expect.

I make mistakes and maybe you do as well. There is no reason to believe that my broker also will not make the occasional error. The important thing is that they fix it promptly. In my case, they did just that. While the mistake was upsetting when I first discovered it, the resolution was quick and relatively easy as it should be. What each of us should take from this little vignette, however, is that we need to look at our accounts. Of course, since I trade for my living, it is the rare day when I fail to review my account, but many investors do not look at their accounts with any degree of regularity. A problem cannot be fixed unless we know it exists so let me suggest that you check your account regularly just in case someone inadvertently gives away your Google.

Good Trading!
Bill Kraft

Mr. Kraft's past articles are posted on our website for your review.

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