IG Index dispute - advice welcome!

This is a discussion on IG Index dispute - advice welcome! within the Spread Betting & CFDs forums, part of the Commercial category; Originally Posted by defender110 I'm now in overall profit, although it's in the 100's not 1000's. I suppose they we're ...

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Old Mar 23, 2011, 8:56pm   #65
 
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Re: IG Index dispute - advice welcome!

Quote:
Originally Posted by defender110 View Post
I'm now in overall profit, although it's in the 100's not 1000's. I suppose they we're egar to allow me to continue trading in the hope I loose this back.

I was reading an article on this site that apparently over 90% traders loose money via SB. I do not know if this is true but it would explain why IG index is currently valued at 1.7 billion - and that's sterling!

I hope to continue trading the news when events occur, appears to me the safest way to make money. I would have been laughing if they hadn't blocked me from selling my stock (by not answering the phone!), would have been quids in but their big and i'm small - and there's nothing I can do about it
Yup, 90% chance you will lose your money back to IG in the long run!
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Old Mar 24, 2011, 7:43am   #66
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Re: IG Index dispute - advice welcome!

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Originally Posted by tar View Post
Electronic trading suspension , what u r talking about is something different it happens when there is suspension in the underlying market and the stock couldnt be traded any more ...
I disagree - When you trade with a spreadbetting firm you are trading against their price in their market. A firm may well suspend their market if the underlying becomes unavailable. However, this is not the only reason which a firm may use to suspend it's market. The various reasons are listed in the Client Agreement. In this particular case I'd agree with the earlier poster - the market was clearly suspended and this suspension went beyond a suspension of internet trading (phone only) as the firm stated to the client that it would not be possible to add / modify / open / close orders even via the telephone... In other words there was absolutely no access to the firms market by any method.
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Old Mar 24, 2011, 7:53am   #67
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Re: IG Index dispute - advice welcome!

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Originally Posted by Mata Nui View Post
I had a quick look at the T&C and my interpretation is that if they suspend trading as they did they will either close bets at current value or void trades. Either way according to thier own T&C they shouldnt have let the trade continue so without doubt they were in the wrong.

Question is (as someone else pointed out) they would have also had customers on the other side of the trade, what did IG do about those trades? My thinking is they would have voided the trade straight away but it would be interesting to know.

It just proves the point that like most compainies (not just SB firms) IG will happily try it on if they think they can get away with it. The fact they settled so fast IMO does not reflect well on them as it adds weight to the argument that they knew they were in the wrong but tried it on anyway.
My reading of the firm's T&Cs is slightly different.

If you read them carefully you'll see that the word "may" is used quite a lot. In other words, in plain English, the firm are never obligated to take any of the actions or entitlements which it lists in those particular terms. Instead they can decide if they wish to invoke a particular term. On that basis you wouldn't be able to claim that the firm should have done x,y or z because the firm could simply defend itself by saying that on the particular occasion in question they decided not to invoke that term. On that basis there appears no obligation for the firm to either "void trades" or "close the bet at current values" although the firm have that option if they wish to exercise it.
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Old Mar 24, 2011, 9:45am   #68
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Re: IG Index dispute - advice welcome!

Quote:
Originally Posted by stevespray View Post
I disagree - When you trade with a spreadbetting firm you are trading against their price in their market. A firm may well suspend their market if the underlying becomes unavailable. However, this is not the only reason which a firm may use to suspend it's market. The various reasons are listed in the Client Agreement. In this particular case I'd agree with the earlier poster - the market was clearly suspended and this suspension went beyond a suspension of internet trading (phone only) as the firm stated to the client that it would not be possible to add / modify / open / close orders even via the telephone... In other words there was absolutely no access to the firms market by any method.
They didnt say he couldnt close his trade by the phone , he cant add/modify , but he can close his trade ofcourse , my point was this is not the suspension that requires IG to void bets or close them at the current price :
" ... . We also reserve the right to Suspend a specific
Bet that you have open with us. If we Suspend a Bet, it means that: you will generally
not be permitted to increase your exposure to us under the Suspended Bet, but
you will be permitted to close, part close or reduce your exposure to us under the
Suspended Bet
; in relation to the Suspended Bet, you will no longer be permitted
to deal with us via our Electronic Betting Service, rather you will be required to deal
with us via the phone ."
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Old Mar 24, 2011, 10:57am   #69
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Re: IG Index dispute - advice welcome!

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Originally Posted by tar View Post
They didnt say he couldnt close his trade by the phone , he cant add/modify , but he can close his trade ofcourse , my point was this is not the suspension that requires IG to void bets or close them at the current price :
" ... . We also reserve the right to Suspend a specific
Bet that you have open with us. If we Suspend a Bet, it means that: you will generally
not be permitted to increase your exposure to us under the Suspended Bet, but
you will be permitted to close, part close or reduce your exposure to us under the
Suspended Bet
; in relation to the Suspended Bet, you will no longer be permitted
to deal with us via our Electronic Betting Service, rather you will be required to deal
with us via the phone ."

They didn't 'suspend his bet'. Instead they suspended their market. A 'bet suspension' is relavent to an individual client. A 'market suspension' is relavent to all clients. This is covered under Section 22 of the Client Agreement titled "Force Majeure Events" which is what firm told the client when he finally contacted them by telephone. Obviously the firm cannot claim a 'force majeure event' against one client whilst allowing other clients to carry on trading the same market - A 'force majeure event' is an event which effects a particular market and not an event which effects an individual client.

Whilst I understand the point which you're raising, it isn't actually relavent to this particular situation. If you read post #10 then you'll see that the firm advised the client that they wouldn't have been able to deal (or alter stops etc) even if he had managed to get through. This is because it was the market that was suspended, not the client. If, as you set out, it was purely the client then he would have been allowed to close his positon or insert stop loss via the phone.
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Old Mar 24, 2011, 11:21am   #70
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Re: IG Index dispute - advice welcome!

"
22. Force Majeure Events
(1) We may, in our reasonable opinion, determine that an emergency or an
exceptional market condition exists (a “Force Majeure Event”), in which case we
will, in due course, inform the FSA and take reasonable steps to inform you. A Force
Majeure Event will include, but is not limited to, the following:
(a) any act, event or occurrence (including, without limitation, any strike, riot or
civil commotion, act of terrorism, war, industrial action, acts and regulations of
any governmental or supra national bodies or authorities) that, in our opinion,
prevents us from maintaining an orderly market in one or more of the Indices in
respect of which we ordinarily accept Bets;
(b) the suspension or closure of any market or the abandonment or failure of any
event upon which we base, or to which we in any way relate, our quote, or the
imposition of limits or special or unusual terms on the trading in any such market
or on any such event; or
(c) the occurrence of an excessive movement in the level of any of our Indices
and/or any corresponding market or our anticipation (acting reasonably) of the
occurrence of such a movement;
(d) any breakdown or failure of transmission, communication or computer
facilities, interruption of power supply, or electronic or communications
equipment failure; or
(e) the failure of any relevant supplier, broker, agent or principal of ours, exchange,
clearing house or regulatory or self-regulatory organisation, for any reason to
perform its obligations.
(2) If we determine that a Force Majeure Event exists we may at our absolute
discretion without notice and at any time take one or more
of the following steps:
(a) increase your Deposit or Margin requirements;
(b) close any or all of your open Bets, other than any Controlled Risk Bet, at such
Closing Level as we reasonably believe to be appropriate (and, in the case of a
Controlled Risk Bet, where there is no quotation available, we may close any such
Bet at the time when we reasonably believe that, but for the existence of the
Force Majeure Event, the level set by you for closing the Bet would have been
reached);
(c) suspend or modify the application of any or all of the Terms of this Agreement
to the extent that the Force Majeure Event makes it impossible or impractical for
us to comply with the Term or Terms in question; or
(d) alter the Determination Date for a particular Index. "


anyway he took his money back
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Old Mar 24, 2011, 1:51pm   #71
Joined May 2001
Re: IG Index dispute - advice welcome!

Yes, agreed, IG acted very fairly on this one.

I was making my series of points for one reason; that people should be aware of what the T&Cs actually state. If people are planning on trading for the longer term then they should be aware that these kinds of 'black swan events' do occur in the markets from time to time. Over the years I've found quite a few occasions when firms stop following what the client agreements set out when particular situations suit them.

Steve.
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Old Mar 24, 2011, 5:53pm   #72
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Email from Igindex

I emailed the dealing desk and i asked them about this matter and here is their response , which is more than fair , i didnt know that the futures market wasnt trading at the time ...

"Dear Sir

Thank you for your email. Please let me provide the context to our decision to suspend trading on our Japan 225 (Nikkei) markets last Wednesday evening. Firstly, the most important thing to note is that at the time we were acting as market makers because no futures markets were trading. We were making our price according to the volatility seen in other markets and client business that we were seeing. I am sure that you are already aware, but to expand on this further, USD/JPY had just dropped 3.5% in a matter of minutes. There was also news emerging from Japan that the Government would intervene imminently in order to try and weaken the Yen, and rumours that the Nikkei would not reopen as scheduled.

With all this in mind, we felt we had no option but to stop making a price for the short period until we could establish a firm market price when the underlying futures market opened. I am afraid that during this period we were unable to quote prices either online or over the phone to open new bets or close any that were existing. We resumed quoting as soon as we possibly could, around 30 minutes later.

Please understand that these circumstances were very unusual as market conditions of this nature occur very rarely. I hope the information above clearly explains our decision.

If you have any further queries please do not hesitate to contact me.

Kind regards,

Alex Moore
Dealing Support Desk
"
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