📘 Trade Type Explanation: As of Correction
What is it?
An "As of Correction" trade type refers to a transaction that both corrects a previously reported trade and is submitted on a different day than the original trade's execution.
When does it occur?
This trade type occurs when an error is discovered in a previously reported trade, but the correction is made on a subsequent trading day.
Key characteristics:
- Combines aspects of both "As of" trades and corrections
- Modifies details of a trade reported on a previous day
- Aims to rectify historical trading data
Impact on trading data:
- Volume: May adjust historical trading volume if the trade size was reported incorrectly
- Price: Can update historical high, low, open, or close prices if the price was reported incorrectly
- Other: May impact various historical trading statistics and require adjustments to past market data
Why it matters:
"As of Correction" trades are essential for maintaining the accuracy and integrity of historical market data. They allow for the rectification of errors in 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 corrections
- Restrictions: Subject to specific rules and potential additional scrutiny due to the delayed correction
- Broker-specific considerations: Procedures for handling "As of Corrections" may vary between brokers
Example:
On Monday, a trader discovers that a trade from the previous Thursday was incorrectly reported with the wrong price. On Monday, they submit an "As of Correction" to fix the price for Thursday's trade.
Technical details:
- SIP Mapping: Often has specific codes to denote "As of Correction" trades
- Reporting requirements: Must be clearly identified as both a correction and an "As of" trade, with the original trade date specified
Related trade types:
- As of Trade: Similar timing, but doesn't involve correcting a previous trade
- Correction: Similar purpose, but for same-day corrections
Common misconceptions:
Some may think "As of Corrections" indicate attempts to manipulate historical data. However, they're often necessary to fix genuine errors and maintain data integrity across trading sessions.
Historical context:
The need for "As of Correction" 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 Corrections" are subject to regulatory oversight to prevent abuse. Firms must have processes in place to minimize the need for such delayed corrections and to ensure they are used appropriately when necessary.