Margin Call!!

[stock trader]

Hi all

Right ! lets all be honest with ourselves and lets hear from those traders that had really bodged it sometime and had to answer to a ‘Margin Call’. It would be interesting to hear how and where you were contacted to pay up, how did you react and what were your feelings at the time? what adjustments to your trading did you make to recover? …well many of you would think ‘what happened to your Stop Loss’ but inspite of this has any one had to answer a Margin Call?

regards
ST

 

[JonnyT]

Hi ST,

I've had one for over £100,000

JonnyT

 

[NickW]

When I pyramid trade I get margin calls all the time, basically when I'm sure of the trend position trading I max out. I use a spreadsheet to work out when I can buy more, allowing room for a swing against me, and I take some off at the margin call point. I only pyramid when I'm up already and max out early. The last time I did it I was long from 790 in october - so not often.

 

[stock trader]

JT...You Can Not be Serious ma man! is that why you think SB's are for mugs?...but you dont seem to take into account that SB's is the starting point for many a trader cause one can bet small and learn and may be even make a consistent profit. Then again JT, I've got to give it to you mate...it has to be a 'MUG' that gets a margin call for 100k

ST

 

[Dr Mike]

I've had three margin calls from D4F - the first one for £64,000, which I ignored. I assume this was a system glitch - I never heard anything further.

The second one because a telephone bet had been wrongly posted to my account.

I assume the 3rd one was a wrong booking as well, on receiving the call I checked my account and found myself 80 pts in profit on a bet I hadn't placed. So I quickly closed it off before any damage was done.

I never log of D4F now without printing off all my open positions.

 

[farzin]

I had a few margin calls between £10,000 to £30,000. But That's fine if you have a time frame and strategy. On all occasions not only I had my money back after a few days I also made some more money since I added on my positions when market was dip. I think in a volitile market, if you want to be in the game you should have some guts to risk (obviously not burning your fingurs!) otherwise you might get stopped too many times. But I reapt my point again, if you have a strong opinion about the market and can handle margin calls (financially and Psychologically!!) then nothing is wrong with it. Anyone disagree?

 

[mmillar]

You're mad as a hatter Farzin

No matter how confident you are in your position, it only takes ONE time for you to get it wrong and you are history.

For anyone who is right 100% of the time then getting margin calls/averaging down is OK - for everyone else put your stop in and stick to it.

 

[JonnyT]

Hi Stock Trader,

The margin call I had for £100,000+ was a system blip at Deal4Free. I was short ISYS at the time, but for some reason the buy price went up to something like 100,000p instead of 100p.

I tried a cheeky short at that price, but for some reason they didn't accept my kind offer.

Although I complained about the margin call I never even got a simple sorry from them.

As for spreadbets are for beginners, thats fine for FTSE 100 Stocks but simply forget it for anything else unless you want your wallet emptied. Those dice are well loaded.

JonnyT

 

[sidinuk]

Must be something about d4f, I had a margin call last night for £1,584 which should never have happened. It seems that when I closed out my position they doubled my margin requirement instead of eliminating it!

I knew it wasn't right but my girlfriend was on the computer at the time and saw the email, scared the life out of her! I don't think she believed me when I said that they had made the mistake.

 

[NickW]

I've noticed that D4F offers a good deal on FX trades, indeed their spreads are inside those available from Saxo - a fairly major FX broker. Albeit by only 1 pt.

I'm sure that long swing or position trading is a better way to trade with spreadbet firms. Which sounds ideal for FX trading given that FX is widely stated as trending well. I'm just starting to put my money where my mouth is on this one.

Otherwise I'd agree, it's easier to make money trading futures with a real broker - I trade the ES with IB.

 

[farzin]

mmillar
I didn't say that I am 100% right all the time or I don't have a stop loss limit on my trades. What I said was that I have been asked for margins in couple of occasions. I say it again, it really depends on your time frame and how deep your pocket is. If you have a long term position and you look at the daily charts, you might have a stop loss well below/above your traded price and you still keep the position since it hasn't triggered your stop yet. My point is as well as greed which is number one enemy of traders; I think fear also is number 2 enemy. How many times happened to us that the market touched our stop and we have been caught by a big loss and market has gone back to our favour right away?

 

[farzin]

Sorry! Typing mistake I meant greed

 

[Skimbleshanks]

farzin:

at the bottom of your post you will see some buttons - if you click on the Edit button you can amend your post.

Not very many people seem to be aware of this, so I hope you don't mind me mentioning it.

 

[farzin]

right! Thank you. Silly me! I didn't see the edit button.

Cheers

 

[stock trader]

Phew!
Farzin... (talking about deep pockets!) its mind boggling…£10000, £30000 Margin for an independent trader I’d say you must know what you are doing and not only have deep pockets but ‘bottomless ones’ too (good luck to you mate if you can get away with it).

All this takes the wind out of my sails, It goes to prove a lot of things besides greed & fear one surely needs guts…also what Dr Mike, JT & Sid has brought to attention is a fact of life and this can be very scary, something out of a horror movie I’d say, when you know very well that you should not ever receive a margin call… but yet you do because of a ‘glitch’ or what ever it is in the so called state of the art trading system that the brokers own…ok so in your case they acknowledged their mistake…..what if… they decide to stick to their guns and insist that you are responsible and you owe them …how is one expected to get out of that one?…how?. What protection and safe guard do we really have against this…because at the end of the day the onus is on you to prove them wrong!

ST

 

[farzin]

Thank you stock trader.
On broker mistakes point, as you know brokers are all regulated by FSA (here in the UK) therefore they record all phone calls and computer logs etc... In case of not accepting the mistake they should either provide you by your telephone conversation tape or somehow give you a proof. In this occasions the best thing to do is to be calm and instead of argueeing with brokers (even worse, the girl at help desk who perhaps doesn't even know what the meaning of margin is), you should ask for Compliance officer of the firm and you will see very soon how they amend your account