Bad experience with City Index

On Friday evening I came home from work to find a msg had been left by City Index on my answering machine at 9:15 am stating: "margin call on my account
unless funds were received by 4pm that day my trades would be cancelled".


City Index had closed my trades!

Surely it can't be right that they can do this? I've held an a/c with City Index for several years and previously i've always made good on margin calls
I cannot understand why at least 48 hrs notice was not given just from looking at my a/c it would be obvious that I traded just part time- trading in the evening so it would be unlikely for me get the msg in time.



I believe my trades were good trades placed only recently after the market crashed :long open till March on AQP and Cairne .Stocks I believed to be oversold and down on the Friday because of volatility and even if I'm wrong the downside risk is very limited
because the stocks have fallen so much.



Has anyone else been treated like this by City Index - Is it possible to get trades reinstated?

How and where do you go report/complain about this sort of behaviour?


Regards


Nibot1

Hi Nibot1 - I don't trade with City but the rule generally is if you want to trade you have to have the margin - you can't let the profits provide the margin after the event. The Finspreads trading platform has a facility that shows you the margin amount you are incurring, against the trading capital available. If you have less capital than margin, you will get the call. But, its like an overdraft, its your resonsibility.

Yep gotta agree with tomorton.

It's a mistake to think it'll be ok because the prices will rise again. What happens if they fell again overnight and your account was negative? What if you didn't have the money to pay City Index back?

Margin calls are there to protect City Index - not you.

margin call

Sadly theres not much recourse.
the small print with all the firms, is quite specific regarding margin call requirement, and you agree to it when you sign on the dotted line!

I have had a margin call with IG Index but they made every effort to contact me and when they did I sorted it out immediatly. There really is little recourse and as stated you did agree to the Ts&Cs.

Guys,


This is totally unbelievable.

I am now going to give some great advie that will stop this stupidity.

There is another guy on here complaining about the same problem, his name is dreamer.


Now listen:

First thing first:

It's your responsibilty to cover margin, getting/recieving a call is not a necessity from the broker or spreadbet company. Especially when they have tried calling you and you have not responded.


Now, here's the important bit that you should know that seems to begger belief that you dont already:


When you place a trade, you place a stop loss....yes.....If so, you know immediately whether you will get a margin call BEFORE it hits your stops....right.....So, set your stop within your margin requirement and you WILL NOT get a margin call.

If you do not know this simple equation then you should not be trading...simple.
It's THE most basic requirement of money management.

Good traders DO NOT get margin calls. Rookies do, and they often go bust very quickly then complain it was someone or something else.

Your trade, Your responsibility.

hedge funds forced liquidation through margin calls has often happened in the last few weeks which is why there can be big spikes about 3pm usa time. margin call clerks will just dump the position on the market regardless of the price. it doesn't matter who you are individual or institution- no margin covered by the time set on the day? position dumped.

This is the sort of foolish trading and then trying to blame the spread bet co that gives them a bad name. The truth is newbie traders get stung and then don't take responsibility. No sympathy, entirely your own fault...

margin calls

have to agree. you cant blame the sb.
At some time or another its happened to every one of us. You know where you stand whoever you trade with its in ALL their terms and conditions. It protects them, and you!
2 options, work out your stops or human stop if you can sit in front of a screen all day!
At the end of the day if youve been margined out, the trade has gone against you and you dont like it because it hasnt gone your way! thats human nature. one of the basic rules of trading! dont let emotions cloud you!

Some exelent posts here, Top Marks to Lee Shepard for his comments.

In the bad old days when i had an account with Finspreads, I noticed my stops got hit exactly to the point even when the market never reached that level.

When I requested an explanation , there answer in writting was,

We ' Quote our Index prices to follow the relevent Futures market, but when this figure is not matching the actuall level of the index we then adust our quotes to match the underling Index.

They claim this is not price manipulation simply action taken to keep there quotes in line.

Im my opinion Its just unfortunate that if custermers have stops at or around either side of the bracket Quote there stops get hit and postions closed.

Well done Finspreads for admiting there pricing structure.

Its very frustrating for FTSE100 traders like me to find that the SB FTSE100 quotes track the market very closely all day from 8 to 4:30, then swing +/- 100, 200 or 300 points during the early hours of the morning. Sometimes they go off 200pts and return to just where they were at the close. These sots of fluctuations trigger all my stops in the area and have also hit my buy/sell orders on meaningless price spikes that never print on the FTSE100 index chart. I am pondering cancelling SB stops overnight but leaving limit orders in place to see if they can capture profits on spikes.

I think yo will find they will take your stops on these spikes but not fill your limits on profits for one reason or another.
Genarally its the way these Firms Work.
But then good luck in emptying your account with them.