[CANSLIM] OFF TOPIC, stop order question

From: Mo <mosspp@yahoo.com>
Subject: [CANSLIM] OFF TOPIC, stop order question
Date: Thu, 20 Mar 2003 14:22:37 -0800 (PST)

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I have had several stop orders rejected by E*Trade
recently and would like to know if other brokers have
the same restrictions.  E*Trade requires the stop
price to be:

at least Ask + $0.10 for a buy order
at most  Bid - $0.10 for a sell order

Further aggravating the situation, my rejected orders
were placed after the market had closed when
(according to E*Trade) the Bid and/or Ask prices are
essentially undefined.  Has anyone had a similar
experience with other brokers?


My correspondence with E*Trade follows:

I tried to place a stop order on 3/19/03 at approx.
1:00 am EDT, clearly after the market had closed.  The
order I wanted to place was:

Buy 500 PWI, STOP @ $16.98

The order was rejected so I tried a market order for
the same security.  The confirmation page for the
order (which I canceled) showed the following for PWI:

Price: $16.80
Bid:   $13.12
Ask:   $33.76

I assume that my stop order was rejected because it
was not outside of the bid/ask price range.  Where did
these prices for the bid/ask come from??!!  The ask
price is 70% higher than the 52-week high for PWI!

I experienced a similar problem the day before on an
order for DAKT.  The price spread was not as
unbelievable as the one for PWI but my order was still
rejected.

E*Trade's response:

The skewed Bid/Ask that you see when the market is
closed is simply information that the market maker
reports once the market is closed.  It is not
indicative of any actual Bid or Ask for that very
reason.  As such, it means that most stop orders have
to be placed when the market is open as the orders
need to be at least $0.10 above the Ask for a buy
order and $0.10 below the Bid for a sell order.

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