Schwab’s online, computer application protects a buyer from making particular transactions of penny stocks that it is not programmed to carry out–no harm, no foul. USAA, however, permits a buyer to enter a fractional cent, limit purchase of a stock from the pink sheets, but its computer application then rounds the limit up to a cent. The transaction occurs instantly, of course, simply because some seller makes a killing off of the buyer courtesy of USAA’s raising the limit. Is that legal? Ought to USAA (or any broker) be liable for the additional cost that it adds to the provide to purchase? If a broker’s computer application can’t handle fractions of cents, it appears at the very least a small misleading to allow a user to enter the lower decimal values.
December 3rd, 2009 at 1:27 am
There is a pop-up confirmation box that you click on to send in the trade. If you click on this box without reading it because you are in a hurry, then it’s not their fault. If you wanted to avoid the time spent clicking this box and turned off the confirmation feature, then it’s not their fault. If you don’t take the time to understand how the trading platform works, then it’s not their fault. Read the instructions and the disclosures.
In the long run, it doesn’t matter. If you are playing with penny stocks, you are treating the market as a video game and you will lose your money. It doesn’t really matter how. You are paying for entertainment, like in a casino.