Cancelled oil trades

whenwilljack

Junior member
15 0
Hi all,

Last Friday morning I had an unusual situation occur. I was watching the oil markets and noticed volatility increase. I wasn’t aware of why this was happening but noticed that, while price movements were volatile and jumpy, they were fairly consistent and repetitive. I've attached a chart to show what I'm talking about. This presented me with a viable strategy of selling towards the top of the range and buying towards the bottom, which is what I went on to do. Over the next hour or so I made just under £18k doing this.

Now of course it seemed unusual to me (my hourly rate is a little less than this normally!), but I was surprised when my broker froze the markets for a while. This was quickly followed by an email from them to say they had cancelled the trades and taken away all associated profits. Their reason for this is that they are claiming a data error and that they are entitled to cancel the trades under the 'manifest error' of their T&Cs. I don't have any evidence that prices were wrong - as you can see the prices being quoted didn't differ widely from preceding price action - but assume the broker wouldn't lie about it. I don't want to name the broker at this stage as I'm not trying to unduly muddy their name but they are a large UK based firm.

I wondered if anyone had a similar experience at all, or any knowledge of this 'manifest error'? I genuinely don't know what the correct outcome should be here which is why I'm asking for advice. My gut feeling is that they probably have covered their backs in the endless T&Cs, but I can't get away from the feeling that this is their mistake but I am the one bearing the cost. I also think about when a shop offers a price wrong they honour it, except when price is so obviously wrong it has to be a mistake. I think (hope!) the manifest error should be there to cover this type of scenario (e.g. their systems offering gold at $1.4 instead of $1,400 which would bankrupt them), rather than oil merely being priced a few cents incorrectly. What do you guys think?

The other thing is that I was assuming risk on each of the trades. Had the market moved against me on the first trade giving me a loss would the broker have been emailing me to say they were refunding me? I doubt it. I'd love to know how many other trades, particularly losers, were cancelled in oil during this time period. To think i undertook this risk for nothing leaves a bitter taste in my mouth.

Few final points:

- they offered me £25 (rising to £50 when I told them it was insulting) goodwill gesture. Does anyone else find this insulting?! It had the feeling to me of give the guy some loose change in the hope he'll go away. Maybe I'm wrong and it was a genuine goodwill gesture but acted more like a kick in the balls after they took £18k from me. They also removed the gesture entirely when I told them (politely) it was insulting which I thought was petty
- I've had their final response (basically 'screw you') and submitted a claim to the UK financial ombudsman. Don't hold much hope but no harm in trying
- I can post the email conversation i had with them if people are interested
- I'm gonna post this in a few places so apologies if you see it elsewhere

Any opinions/ experiences welcomed?

Thanks,
WWJ
 

Attachments

  • Brent_14.6.13.png
    Brent_14.6.13.png
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ffsear

Senior member
2,169 447
Need more info. Can you post the actual trades that have been cancelled? So we can see the exact time you dealt and the price you dealt at? Then we can see if a manifest error is applicable
 

ffsear

Senior member
2,169 447
Moved to spreadbetting forum
 

whenwilljack

Junior member
15 0
I've attached the trade log.

I'm not certain what month to be honest. The symbol for the chart is WTISB so there's no letter to represent the month. I would assume it was July though?
 

Attachments

  • Oil trade log.doc
    149 KB · Views: 195

ffsear

Senior member
2,169 447
Having had a quick look it looks right to me. E.g 10.10am You have sold at 96.86, however my data shows a price range of 97.15--97.25
 

whenwilljack

Junior member
15 0
The chart you have posted is Brent Crude, but your trades relate to WTI us ?

The majority of trades were US crude but I switched to Brent after the US market froze/ was shut down. The price action was similar on both. I've attached the WTI chart
 

Attachments

  • USCrude_14.6.13.png
    USCrude_14.6.13.png
    57.7 KB · Views: 111

ffsear

Senior member
2,169 447
i'm afraid it does look like a manifest error to me. My broker is actually missing data for that whole part of the morning. Shame, that would have been good for a mornings work.
 
Last edited:

Hakuna Matata

Well-known member
357 209
yer looks like there was a problem with their data pal, the mkt wasn't trading anywhere near those levels in the futures.
 

whenwilljack

Junior member
15 0
Having had a quick look it looks right to me. E.g 10.10am You have sold at 96.86, however my data shows a price range of 97.15--97.25

Sorry, when you say it looks right do you mean the prices look right or the manifest error looks to have been applied right? Also the data you may have compared to might be wrong as this broker quotes the time as GMT+1 for some reason
 

whenwilljack

Junior member
15 0
yer looks like there was a problem with their data pal, the mkt wasn't trading anywhere near those levels in the futures.

When you say 'anywhere near those levels' how far away are we talking? Could you post a chart if possible? I compared it to another broker's feed and it didn't look far off to me (few cents difference only)
 
 
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