Don't Have the foggiest idea (DK)

What Is Don't Know (DK)?

"Don't have the foggiest idea (DK)" is a shoptalk articulation for a out trade that is involved when there is a disparity in the subtleties of a trade. Otherwise called a "DK'd trade," the articulation alludes to a situation where no less than one of the gatherings included claims to lack information on some part of the trade or "doesn't have any idea" the trade.

The purpose of an exchange —, for example, the New York Stock Exchange (NYSE), Nasdaq, and the London Stock Exchange (LSE) — is to guarantee an organized and efficient marketplace where buyers and sellers can trade financial instruments like stocks, commodities, and derivatives. At the point when an exchange gets a DK'd trade, it can't execute the trade as a result of inconsistent data associated with the trade. The exchange's clearing house can not settle a DK'd trade on the grounds that the terms of the trade are clashing or conflicting.

Figuring out Don't Know (DK)

At the point when a trader submits a request to buy or sell a security, the settlement or completion of the trade doesn't happen naturally. A clearing house acts as an intermediary that accommodates the order between the executing parties, transferring the securities to the buyer and the cash to the seller. This interaction can require several days or longer to complete after the original placement of the trade. Now and again, the trade might fail to clear completely.

A DK'd trade can result when one of the gatherings to a trade has a dispute or rejects a trade for quite a few reasons. They might not have the trade in their records or there might be a disparity with the price, number of shares, or CUSIP number. At times it could be due to misled directions from one party to the next. Once in a while, a party might utilize this strategy to escape a trade when the market moves against them, which has been noted as a deceitful strategy in the financial sector.

The SEC Rules for DK'd Trades

The Securities and Exchange Commission (SEC) gives certain rules and procedures to DK'd trades done on the Nasdaq stock market in its Uniform Practice Code. The rules determine that any contract that has been DK'd by a contradicting party or that has been considered DK'd under the rules of service might be closed out by the party that presented the contract with no notice during normal trading hours.

The rules proceed to state each party must present a Uniform Comparison or Confirmation inside a business day and these comparisons or confirmations will be compared to decide whether any inconsistency to be sure exists with respect to the DK'd trade. If by some stroke of good luck the claiming party submits a comparison or confirmation, the other party can be informed and has four business days to answer. On the off chance that they don't, then the claiming party has no further liability on the DK'd trade.

A confirmation or comparison must incorporate specific data framed by the SEC. This incorporates a description of the security, the price at which the transaction was made, and whatever other specific expressions that assist with deciding the subtleties of the trade.

Assuming that traders are trading through an electronic trading platform, generally they will be told by means of the platform's specific code that a trade has been DK'd.

Illustration of Don't Know (DK)

There are numerous ways a trade can be noted as DK'd. For instance, firm XYZ buys 1,500 shares of ABC stock from firm X. At the point when firm X conveys the stock to firm XYZ, firm XYZ could dismiss the trade (DK it) if the terms of the delivery (price, quantity, or specific security) don't match their records, or on the other hand in the event that the trade isn't on their records by any means.

Features

• A "don't have any idea" trade happens when one of the gatherings disputes or rejects the trade due to quite a few reasons, like an irregularity in the price or number of shares.
• "Don't have the foggiest idea" is a trading articulation used to portray a trade that can't be executed on the grounds that there is an error in the subtleties of the trade.
• The Securities and Exchange Commission (SEC) frames rules of strategy when a trade is DK'd.
• This strategy is some of the time utilized as an untrustworthy move to escape a trade when the market conflicts with the trader.