IG £30 million down this morning... ouch!

f2calv

Experienced member
1,318 278
TIDMIGG

RNS Number : 2929C

IG Group Holdings plc

15 January 2015

IG Group Holdings plc

15 January 2015

Statement on Swiss Franc movement

Following this morning's exceptional announcement by the Swiss National Bank, which resulted in a sudden and extreme movement in the value of the Swiss Franc, IG Group Holdings plc ("The Company", "The Group", "IG") believes it is appropriate to provide an update on the negative financial impact to the Group. The precise level of the impact will be partially dependent on the Company's ability to recover client debts, but in total it will not exceed GBP30 million, from market and credit exposure.

The market exposure occurred where client positions were closed at a more beneficial level than the Company was able to close its entire corresponding hedge due to the market dislocation.

This occurs against the backdrop of very strong recent and current performance and IG's extremely robust financial position.

As scheduled, on 20 January 2015, IG will present its results for the first six months of the 2015 year, and will provide an update on progress on its strategic initiatives.

For further information, please contact:

IG Group

Kieran McKinney

Head of Investor Relations 020 7573 0026
FTI Consulting

Neil Doyle / Ed Berry 020 3727 1141 / 1046
IG is a global leader in online trading, providing fast and flexible access to over 10,000 financial markets - including shares, indices, forex, commodities and binaries.

Established in 1974 as the world's first financial spread betting firm, IG's aim is to become the default choice for active traders globally. It is already an award-winning multi-platform trading company, the world's No.1 provider of CFDs* and a global leader in forex, and it launched an execution-only stockbroking service in the UK and Ireland in September 2014.

It is a member of the FTSE 250, with offices across Europe, Africa, Asia-Pacific and the US, where it offers limited risk derivatives contracts via the Nadex brand.

*Based on revenue excluding FX, published financial statements, July 2014.

This information is provided by RNS

The company news service from the London Stock Exchange

END

MSCUVUSRVRAAAAR

Poor IG... and for that matter poor anyone else on the wrong side of that move :/
 

tokyojoe

Established member
874 289
I spoke with their desk, they were unable to obtain price feeds for a long while, even by telephone. This is a classic reminder to us all that you could lose your shirt (& pants) in nano seconds, but not know wtf is going on for ages
 

Pat494

Legendary member
14,625 1,575
Poor IG... and for that matter poor anyone else on the wrong side of that move :/

I really don't understand your sympathy for IG. Surely they make money on commission, not trading for themselves ? Why should they care if the market spikes and takes out a lot of stops.
 

highbury fx

Well-known member
338 114
I really don't understand your sympathy for IG. Surely they make money on commission, not trading for themselves ? Why should they care if the market spikes and takes out a lot of stops.

IG make their money in 4 ways:

They run a risk book that will internalise trades from B book clients

They will capture both sides of the spread from clients trading on the same pair in different directions

They make money from the overnight financing they charge

They make slight differences in spread (commissions) from A book clients who are hedged in the market


This is the model that all 'Dealing Desk' CFD and Spreadbet firms use and they will all generally make money from all 4 revenue streams.

Every so often they'll get caught with their pants down and this is one of those moments. Everyone (including the brokers) was short the CHF and why wouldn't you be if the SNB has support at 1.2000, its your guaranteed stop. Or it was until this morning.....
 

timsk

Legendary member
7,477 2,234
This isn't directly relevant to IG, but it's another aspect of the same issue. I wasn't affected either way, but I am an ETX customer - hence the e-mail just in . . .

"Dear Tim,

Please be informed that due to today’s exceptional market movement in CHF crosses, we have been filling clients’ orders and positions in an extremely illiquid market.

As such, we are now reviewing all executed fills and we will amend them to more accurate levels. This may result in a worse execution rate than the originally filled level.

Please keep in mind that, therefore, the balance in your account(s) might change and your trading activity be affected.

Should you have any questions regarding our market trading hours please contact 0800 138 4582.

Kind Regards,

ETX Capital"


Call me an old cynic but, reading between the lines, I think they're saying that had I been short throughout, ETX would be clawing back my profits. The big question in these circumstances is - had I been long - would they be so willing to compensate me for my losses? Or have I got that completely wrong?!
:p
Tim.
 
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donaldduke

Experienced member
1,665 257
Call me an old cynic but, reading between the lines, I think they're saying that had I been short throughout, ETX would be clawing back my profits. The big question in these circumstances is - had I been long - would they be so willing to compensate me for my losses? Or have I got that completely wrong?!
:p
Tim.

If you had been short throughout (before the announcement and still short) you would be ok.

They are saying they going to butt*uck everyone who got a fill in the minutes after the news.

They will widen the spread in hindsight. To 100, 200 or 500, or 1000 whatever pips they choose.

This way they can screw both the long and short customers who got filled in that time.
 
Last edited:

neil

Legendary member
5,167 747
This isn't directly relevant to IG, but it's another aspect of the same issue. I wasn't affected either way, but I am an ETX customer - hence the e-mail just in . . .

"Dear Tim,

Please be informed that due to today’s exceptional market movement in CHF crosses, we have been filling clients’ orders and positions in an extremely illiquid market.

As such, we are now reviewing all executed fills and we will amend them to more accurate levels. This may result in a worse execution rate than the originally filled level.

Please keep in mind that, therefore, the balance in your account(s) might change and your trading activity be affected.

Should you have any questions regarding our market trading hours please contact 0800 138 4582.

Kind Regards,

ETX Capital"


Call me an old cynic but, reading between the lines, I think they're saying that had I been short throughout, ETX would be clawing back my profits. The big question in these circumstances is - had I been long - would they be so willing to compensate me for my losses? Or have I got that completely wrong?!
:p
Tim.

Their attitude is akin to those of the Bankers :When they screw up they screw you (the public).
 
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counter_violent

Legendary member
11,029 2,921
The difficulty for IG or any other outfit for that matter is simple to understand. They will be relying on their customers who went negative balance to stump up the wonga owed, and there is no question that these customers do owe IG this money. The only customers who will be spared any clawback will be the ones using guaranteed stops.

This is all part of trading folks and you cant go around blaming anyone else for your actions.
 

tar

Legendary member
10,443 1,313
c'est la vie

A couple of bookies lost money , who cares ? I even wont call them brokers .
 

tar

Legendary member
10,443 1,313
Early on January 15, 2015, the Swiss National Bank (SNB) sent global financial markets into turmoil with a surprise move to eliminate its three-year-old cap on the franc (CHF).

In the wake of this unprecedented market event, OANDA demonstrated its ongoing commitment to doing right by its clients. Despite suffering losses and vanishing liquidity in the institutional hedging market, OANDA remained true to its 14-year legacy of transparency, integrity and fairness to our clients. OANDA did not re-quote or amend any CHF cross client trades. We even took the further step of forgiving all negative client balances that were caused when clients could not close out their positions fast enough (where permitted by regulations).

As a very well capitalized broker, we are proud to report that it is business as usual at OANDA: client trading, deposits and withdrawals are processing normally.

OANDA is proud of its strong reputation for fairness and integrity. We thank our customers for their continued loyalty and welcome new traders who want to experience outstanding service and execution.
 

itspossible

Senior member
2,795 563
The difficulty for IG or any other outfit for that matter is simple to understand. They will be relying on their customers who went negative balance to stump up the wonga owed, and there is no question that these customers do owe IG this money. The only customers who will be spared any clawback will be the ones using guaranteed stops.

This is all part of trading folks and you cant go around blaming anyone else for your actions.
Very good point.priase the lord for demos;)
 

neil

Legendary member
5,167 747

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donaldduke

Experienced member
1,665 257
Guaranteed stops are only as good the solvency of the bookie.

If IG losses had been big enough and they declared insolvency then guaranteed stops could be reneged on and your account wiped out.

Scary thought and something to keep in mind before overleveraging in future.
 
 
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