📘 Trade Type Explanation: As of Cancel
What is it?
An "As of Cancel" trade type refers to a cancellation of a previously reported trade that is submitted on a different day than the original trade's execution.
When does it occur?
This trade type occurs when a trade needs to be fully cancelled, but the cancellation is processed on a subsequent trading day after the original execution date.
Key characteristics:
- Cancels a trade reported on a previous day
- Removes the trade entirely from historical records
- Used when a trade was erroneously reported or executed and needs to be completely reversed
Impact on trading data:
- Volume: Reduces historical trading volume by the amount of the cancelled trade
- Price: May impact historical high, low, open, or close prices if the cancelled trade had set any of these values
- Other: Can affect various historical trading statistics and require adjustments to past market data
Why it matters:
"As of Cancel" trades are crucial for maintaining the accuracy of historical market data. They allow for the removal of invalid trades from past trading sessions, ensuring that trading records remain as accurate as possible.
Accessibility and restrictions:
- Retail investors: Generally not directly involved, but may be affected by resulting historical data adjustments
- Institutional investors: More likely to be involved in complex trades that might require retroactive cancellations
- Restrictions: Subject to specific rules and potential additional scrutiny due to the delayed cancellation
- Broker-specific considerations: Procedures for handling "As of Cancels" may vary between brokers
Example:
On Tuesday, it's discovered that a trade from the previous Friday was erroneously executed and reported. An "As of Cancel" is submitted on Tuesday to remove the trade from Friday's records.
Technical details:
- SIP Mapping: Often has specific codes to denote "As of Cancel" trades
- Reporting requirements: Must be clearly identified as both a cancellation and an "As of" action, with the original trade date specified
Related trade types:
- As of Trade: Similar timing, but for reporting valid trades rather than cancellations
- Cancelled: Similar purpose, but for same-day cancellations
Common misconceptions:
Some may think "As of Cancels" are always indicative of market manipulation. However, they are a necessary mechanism for correcting genuine errors and maintaining data integrity across trading sessions.
Historical context:
The need for "As of Cancel" trade reporting has grown with the increasing complexity of financial markets and the need for accurate historical data for analysis and compliance purposes.
Regulatory considerations:
"As of Cancels" are subject to regulatory oversight to prevent abuse. Firms must have processes in place to minimize the need for such delayed cancellations and to ensure they are used appropriately when necessary.