I was curious about what recourse a registered broker has if they put on a bad trade. What I am trying to say is what if you meant to trade MCD(McDonalds) and accidentally typed in MDC(M.D.C. Holdings) and the trade goes through? In the case that I'm referring to, a mistake similar to the above example resulted in a $700,000 error. My question is who pays for this? Does the individual broker have to pay for his error out of his own pocket, the company he works for? Or is there some kind of insurance that covers such mistakes? I remember having to be insured and bonded before I could start trading. It was mandatory but at the time I didn't fully understand what the insurance was for. Is that insurance there to cover any errors I make while trading? One more question, how long or how much time do you have before a trade is legally completed, and is there any way to stop a trade after you push the enter button in the case of an error? Thanks in advance.

Here is all I know. I a good friend was a broker for a big firm in Memphis. He sold some stock for a guy who was on the board of a company so extra paperwork had to be filed. My buddy was new to the game and thought he could go ahead and sell the stock without knowing the paperwork had to come back froom the SEC beforehand. The guy's stock would have appreciated another $50,000 if my friend had waited to sell at the proper time. The firm split the cost with him and he paid out of pocket. Another guy at his firm did the same thing for $200,000. They split it with him as well and did automatic withdrawals out of his paycheck. Hope this helps answer one question.