DOW - Breaking 11,000 can't be that easy, right?

10,785.14 +404.71 +3.90%

NEW YORK - US stocks racked up their biggest one-day gain in over a year on Monday as an agreement on a US$1 trillion emergency rescue package from the EU quelled fears a new credit crisis would derail European economies.

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Investors Hurt by Stock Freefall May Have to Live With Losses

By: Reuters

Investors caught on the wrong side of trades in last week's market freefall may have to live with their losses.

Rules to slow trading on the New York Stock Exchange last Thursday drove orders to all-electronic exchanges that do not have such curbs. The stock markets' plunge briefly wiped 998.5 points from the Dow Jones industrial average and drove shares of such presumably sound companies as Accenture [ACN 41.05 0.73 (+1.81%) ] and Boston Beer [SAM 59.10 4.05 (+7.36%) ] down to just pennies.

While Nasdaq and others canceled trades on more than 200 largely NYSE-listed companies whose shares fell or rose more than 60 percent, experts said investors unlucky enough to have sold depressed shares of other companies that fell less—including Procter & Gamble [PG 62.42 2.11 (+3.5%) ]—have little recourse.

"You might feel bad for people who sell at the bottom," said Jill Fisch, a professor at the University of Pennsylvania School of Law. "That's part of being in the market."

Firms that manage exchange-traded funds said they have received numerous complaints from investors about the 60 percent trigger to cancel trades. More than two-thirds of securities affected by Thursday's gyrations were ETFs.  (Createwealth8888: Wake up! Those who still believe that ETF is low risk. The managers for ETF are not those investment savvy type. So the  truth is ETF is LOW COST but definitely not LOW RISK.)

Some investors may have trouble recovering if they directed brokers to place "market" orders, which go through at whatever price the market is at, rather than "limit" orders, which allow only certain trades. For these investors, it may be a case of buyer—or seller—beware.

"I suspect lawyers will circle around the situation, and the idea that trade cancellations cannot be appealed will get thoroughly tested in the courts," said James Angel, a finance professor at Georgetown University's business school.

You may have a negligence case against your broker for mishandling your order," he said. "But if you put in a market order and it happened to be filled at the wrong time, such as at a penny, you're stuck."