Ally Invest Market Volatility Disclosure
Market Order Delays
In a fast-moving market, attempts at canceling an existing order and replacing it with a new one may result in an execution of multiple orders. In such situations, customers are wholly responsible for each executed trade and any resulting losses. High volumes of trading at the market opening or intra-day may cause delays in execution and executions at prices significantly away from the market price quoted or displayed at the time the order was entered. Market Makers may execute orders manually or reduce their size guarantees during periods of volatility, causing delays in order execution, resulting in possible losses. Using limit orders is highly recommended to avoid executions at prices significantly different from the prices quoted at the time of order entry.
Quotes
In times of high market volatility, significant price discrepancies may exist between the real time or delayed quote received by the customer and the price at which the trade is executed. In addition, the size of the quote (number of shares available) at a certain price may change rapidly, affecting the likelihood of obtaining the full order at the quoted price. Short-term strategies, such as day trading, enhance the risk of loss in volatile market conditions.
Order Execution
We are required to execute market orders fully and promptly without regard to price. While a customer may receive a prompt execution of a market order, the execution may be at a price significantly different from the current quoted price of that security. Limit orders are executed only at a specified price or better. While the customer receives price protection, there is the possibility that the order will not be executed.
You increase the risk of executing substantially away from the market price when placing market orders for initial public offering (IPO) securities trading in the secondary market, particularly those that trade at a much higher price than their offering price, or in "hot stocks" (those that have recently traded for a period of time under what is known as "fast market conditions," in which the price of the security changes so quickly that quotes for a stock do not keep pace with the trading price of the stock). By placing a limit order, you can significantly reduce this risk by including a cap (or floor) with the order, above (or below) which the order is not to be executed.
Access
Technology disruptions can inhibit access to place orders, causing you to suffer losses during periods of volatility. Customers trading on-line may have difficulty accessing their accounts due to high Internet traffic, systems capacity limitations, or interruptions in connectivity. During periods of market volatility, when on-line trading has been disabled or is not available because of systems limitations, customers may have difficulty reaching account representatives on the telephone. While we make every effort to ensure the availability of electronic systems and brokers, we cannot guarantee access during periods of exceptionally heavy activity. In addition, system response and account access times may vary, or service may be interrupted due to other conditions, including system performance, Internet traffic levels, and other factors. Ally Invest's Business Continuity Plan contains procedures for responding to these access problems.
Ally Invest Market Volatility Disclosure v4 20230929