Personal EURCHF losses

[Splitlink]

It really is a shame people have lost really large chunks of cash on this. But I just don't see how most people can hope to claim the money back.

If you had a guaranteed stop, and the terms of agreement say that stop will be honoured, you have a case. I am sure a lot of the spread betters will be updating their terms to something more akin to 'best efforts' rather than guaranteed stops.

If on the other hand your point is that it moved more than you expected and you can't pay, well unlucky.

Screenshots of a market data system showing particular levels tell you nothing. In a normal market, if a particular level is trading, you can usually reasonably expect to be able to trade at or very near that level.

However in this case, there simply wasn't a market. Even if, say, EUR 1 mio traded at 1.1950, that doesn't mean there was the liquidity to trade 10 or 20 mio EUR. The next price was 1.10. Then 1.05. Etc. That is the nature of these things when you get so far out of range. Saying "it traded at 1.1950 so they could have cut me out" is idiotic and shows no understanding of the nature of the market in that half hour.

If you had it the right way round, you'd expect whichever spread better or broker to pay you your profit, so why should you not pay your loss? (Again with the caveat above regarding guaranteed stops).

I am not a wheeler dealer. I have a relatively small stake in my trades because it is a pastime for me- I have enough common sense to know what the markets are like and take my chances with Black Swans. I was not trading forex at the time and I feel sorry for those who lost money but, in all honesty, I cannot blame the SCB for looking after their own interests. They had a strong currency and were tied to one that may take drastic measures this week with QE. What choice did they have? Frankly, I would have done the same in the same position.

I remember the crash of 1987. I had options, then, and my broker would not pick up the phone. What did I do? Goodbye, option trading! Brokers are no different to SB firms when the stakes are down, believe me.

 

[Jack o'Clubs]

IG had its results call this morning and commented that they've 'begun the process of collecting' on client debts although it's not clear what that means in practice or how aggressive they will be. I would have thought that the business risk of forcing individual punters into bancruptcy and thereby precipitating a major regulatory clampdown on the industry to protect clients from themselves in the future is much greater than simply writing off debts that are hard to collect. The FT is already starting to agitate about lax supervision in the industry and the FCA doesn't like to be seen as having been asleep at the wheel. 100x leverage is so key to the retail FX model that brokers will be very reluctant to goad the regulators by initiating hordes of hard luck stories. Maybe the BBC would even do a sequel to that appalling 'Millions by the Minute' programme they did a few months back. They could call it 'bancruptcies by the bucket load'.

 

[tmilligan]

IG had its results call this morning and commented that they've 'begun the process of collecting' on client debts although it's not clear what that means in practice or how aggressive they will be. I would have thought that the business risk of forcing individual punters into bancruptcy and thereby precipitating a major regulatory clampdown on the industry to protect clients from themselves in the future is much greater than simply writing off debts that are hard to collect. The FT is already starting to agitate about lax supervision in the industry and the FCA doesn't like to be seen as having been asleep at the wheel. 100x leverage is so key to the retail FX model that brokers will be very reluctant to goad the regulators by initiating hordes of hard luck stories. Maybe the BBC would even do a sequel to that appalling 'Millions by the Minute' programme they did a few months back. They could call it 'bancruptcies by the bucket load'.

Possibly true although that poses an asymmetric risk similar to that which the world's banks have enjoyed.

Have a punt. If it goes well, you're quids in. If it goes (really) badly, someone else mops up.

Surely not a good message to present?

 

[Jack o'Clubs]

Possibly true although that poses an asymmetric risk similar to that which the world's banks have enjoyed.

Have a punt. If it goes well, you're quids in. If it goes (really) badly, someone else mops up.

Surely not a good message to present?

Moral hazard is endemic since the 2008 crisis. Responses have continually shown that pragmatism trumps 'doing the right thing'. If it's a choice between killing the Golden Goose or writing off a few million in bad debts, it makes more sense to do the latter. Unless they think tighter regulation will come anyway.

 

[Forexmospherian]

This needs now to be the standard to judge a FX Broker - ECN or just a spreadbetting company - see link

http://forexmagnates.com/covered-brokers-forgive-negative-balance-following-chf-crisis/

Sophisticated punters nowadays have a lot of choice. I am no gambler and only trade FX but know all the possibilities and angles available etc elsewhere.

For example if you bet on a football accumulator with a proper modern "bookie" - your risk is no more than your stake - and if you are lucky are do your homework the results can be very much in your favour.

Only this weekend its been reported 1 punter made £30k of a £5 bet on 7 football matches - another made £26k off a £10 bet with him cashing out before the finish off his last bet - ie Everton to beat West Bromwich in the Premiership. If that had happened instead of winning only £26k - he would have pocketed £48K. He played safe as it was a draw .

Their exposures was just £5 and £10k

We all know the Banking and Finance Industry is awash with smart a8ses who want it all their way etc - but customers are KING - and they can make or break a business or even industry.

The sooner all FX Brokers have a cover any negative balance position set in stone - the better.

The customer is KING - Bankers / Brokers / Politicians / Central Banks etc etc need to shown a lesson and not expect everything all in their favour.

I suggest all IG customers change brokers - TODAY - or only stay with them when the conform to new agreements

Jack o clubs - tar mentioned are you a "banker" or working in the industry ? You make some very good points but I guess you are not English - as its bankruptcy - not the French or Spanish bancruptcy word ?

Only my own opinion

Regards


F

 

[Jack o'Clubs]

Jack o clubs - tar mentioned are you a "banker" or working in the industry ? You make some very good points but I guess you are not English - as its bankruptcy - not the French or Spanish bancruptcy word ?

Only my own opinion

Regards


F

Tar posited that I was a 'banker' presumably because I was taking a position in support of the SNB action. He knows nothing about me. Apologies for the spelling mistake. You're right, it's linguistic. I'm English but work in a French speaking office.

 

[scholfield]

its bankruptcy - not the French or Spanish bancruptcy word ?

For someone who calls second charts ''tick charts'', surely you of all people could forgive him this error!!

 

[Forexmospherian]

For someone who calls second charts ''tick charts'', surely you of all people could forgive him this error!!

Actually i was more interested to see if he was a UK banker - but if he's working in a French speaking office then can understand more.

As you know FX is not identical to indices and I will always continue to call all time frame charts under 1 min as tick charts - what ever they are based on.

If other experts disagree - well let them ;-))))

Good trading

F

 

[tmilligan]

As you know FX is not identical to indices and I will always continue to call all time frame charts under 1 min as tick charts - what ever they are based on.

If other experts disagree - well let them ;-))))

F

Agreed - in an FX context, I've only ever heard of tick charts. (Not that I believe in any form of charting!).

 

[spinola]

Agreed - in an FX context, I've only ever heard of tick charts. (Not that I believe in any form of charting!).

Hi Tmilligan. Off topic, but as you're here ! Do you think the regulators/ authorities can stop institutional traders conspiring to target resting orders that have been reported in news last year etc..

How endemic do you think that practice is ? And what solutions will end that practice ?


Cheers.

 

[tmilligan]

Hi Tmilligan. Off topic, but as you're here ! Do you think the regulators/ authorities can stop institutional traders conspiring to target resting orders that have been reported in news last year etc..

How endemic do you think that practice is ? And what solutions will end that practice ?


Cheers.

I presume you're referring to the practice of traders actively either trying to knock out stops or prevent certain levels trading due barrier options they have in place, for example.

It would be very hard to prove what was, say, a natural selling interest and what was someone trying to force the market (not that that is particularly easy in FX these days).

Arguably the only way you could do so is to only allow back-to-back trading. Which clearly is not possible.

As ever with these things, the stated desire of the regulators is far removed from the practicalities. We have seen this over the last few years with the botched Dodd-Frank act and the resultant SEF regulations.

 

[tar]

I didn't say that Jack is a banker ...

 

[tar]

I doubt that IG has a case here , seriously this betting not real trading . Move on IG you suck at risk management your fault not mine .

 

[tar]

Why do you say that mate...their T&Cs are water tight. The only thing that could be against them would be the actual law itself overiding T&Cs, The law is based around the FCA requirements....and the FCA require next to nothing from them

They provide an artificial market - spread betting - they are not brokers , i cant see how can a betting shop manages to collect millions from thousands of punters , just because the market that they had a bet on suddenly gaped against them . Its a game after all that's what IG actually is .

 

[tokyojoe]

They provide an artificial market - spread betting - they are not brokers , i cant see how can a betting shop manages to collect millions from thousands of punters , just because the market that they had a bet on suddenly gaped against them . Its a game after all that's what IG actually is .

Tar does have a very good point. One way to use the likes of IG IMHO is to trade standard market hours, using market hours data, then work out at the point of entry if the price offered is as close as possible to DMA current price.

I have days where I can see IG do follow DMA very closely, then days where their price quotes are skewed too much for me to trust the price offered.

My main take from this whole debacle is not to over leverage (I have been there)

All brokers are spivs at the end of the day, the house will take all your money if you willingly give it to them with too much size

 

[tar]

A couple of years ago my IG account went few hundreds in the negative , we kept sending emails quoting - both of us - T&C back and forth for 9 months , i complained to their legal department twice , at the end they closed my account and cleared the balance . And they asked me to confirm if i accept that decision , i said i will accept but as a gesture of goodwill from me .

 

[wallstreetwarrior87]

this is the market we move in .............its brutal and when a big big move occurs people win and many people lose

trust no-one and never expose yourself to substantial losses
read the small print on broker contracts
make sure that you are watertight on stop slippage - legally

this is not a game .........

sorry to here about anyone who is being hit for stop slippage but this is not kindergarten.....

not what the slick vendors tell you is it ?...they say everything is fine and dandy ......

this is why if you look through all the posts and theads at T2Win you will see many of the more experienced traders urging people to undertake this at their own risk and with due diligence

and by due diligence we mean EVERYTHING ....not just your trading plan.........you have to understand the risks of dealing with other parties like brokers ....

we mean that ..........we are not saying it just for our own benefit

sorry again to here of the issues some have - you will need legal council to understand your positions

N

Also the real issues regarding true leverage, and the serious outcomes that happen due to an event such as this never really seem interesting, until the event does actually occur.

 

[tar]

Mostly the legal fights will be around "best execution" , what best means ? Is closing positions at 1.00 or 1.05 is the best ? Dont quote me EBS or whatever , i am trading IG prices - dont they always say that - , so IG price algos caused punters to owe them millions and they now want to collect ?!

 

[tmilligan]

Presumably anyone using IG (or indeed any other platform) agreed to the terms and conditions. Presumably they also didn't really read them or think about them - who does?!

Fairly early on in the summary of IG terms is the following:

Our policy cannot provide a guarantee, however, that when entering into Contracts with you or executing Transactions on your behalf, the price will always be better than one which is or might have been available elsewhere.

That is even assuming there was a better price elsewhere. As ever, showing graphs or data saying it traded at a particular level does not prove there was liquidity for every market participant to trade at a given level.

I fear there is a fundamental lack of understanding of how these things work. Sometimes there simply isn't a price to trade on - such as at 9.32am on the 15th Jan!

Summary here... seems pretty clear:

http://a.c-dn.net/c/content/dam/pub...m/uk/files/account/order_execution_policy.pdf

 

[spinola]

Tar does have a very good point. One way to use the likes of IG IMHO is to trade standard market hours, using market hours data, then work out at the point of entry if the price offered is as close as possible to DMA current price.

I have days where I can see IG do follow DMA very closely, then days where their price quotes are skewed too much for me to trust the price offered.

My main take from this whole debacle is not to over leverage (I have been there)

All brokers are spivs at the end of the day, the house will take all your money if you willingly give it to them with too much size

And what about suing IG or a bookie, if they fail to properly represent the underlying at all times. Sue for damages and losses .

I mean OK so your price is not the underlying, in fact it may be different from the underlying, so if they fail to provide a bookie price, no matter how they derive it's value, then hasn't a customer got a legal claim to sue for negligence and any damages because of the firms bad practice ?

Just thinking out loud !