Slippage on a Guaranteed stop order at correct price

M

MikeYass

Member
Messages
53
Likes
2
A couple of months ago I was deliberately slipped on a GUARANTEED stop order. I complained to the firm in question and their "independent" compliance compartment rejected my complaint. They upheld that their terms and conditions allowed them to do this as and when they pleased.

I am not going to give out a name of the organisation that did this in case it jeopradises future complaints. I didn't lose a fortune but I think that it is simply not fair for a spread betting company to get away with this behaviour.

Does anyone think that I should get the FSA involved?
 
I thought guaranteed stops attracted additional premium (usually in the spread cost)
In other words...a form of insurance premium or waiver charge so that the customer who uses them is guaranteed a fill at the agreed price.
Guaranteed stops are not supposed to operate in the same way as stops...otherwise what are they charging for!

Yes if you are correct then the matter should be pursued.

Perhaps someone who has had this experience and resolved it could post a course of action.
 
Hmmmmmm,well, prima facia, the use of the term "Guaranteed" would imply that something is, er, guaranteed! As counter_violet says, I assume the only way that firms can offer this is for some sort of premium to be paid on the order by the client.

Any chance of posting the relevent t&c's that they feel allowed them to dismiss your claim.

Plus a bit of background on the whole issue would bit useful.

Can't see for a second that posting more info here is gonna jepordise any potential FSA investigation
 
Yeah the three salient Qs here are;

1) What are the T's and C's for the guaranteed stops?
2) Was there an additional premium payable?
3) What were the market circumstances surrounding the trade in question?
 
Thats really strange ! If it is a guaranteed stop then u shouldnt be slipped whatever happen in the market , normal stops yes u could have slippage ...
 
counter_violent said:
I thought guaranteed stops attracted additional premium (usually in the spread cost)
In other words...a form of insurance premium or waiver charge so that the customer who uses them is guaranteed a fill at the agreed price.
Guaranteed stops are not supposed to operate in the same way as stops...otherwise what are they charging for!

Yes if you are correct then the matter should be pursued.

Perhaps someone who has had this experience and resolved it could post a course of action.
Click to expand...

Some firms charge a premium but not all , for example Shorts and longs i guess they have free G stops also ggmarkets as well ...
 
GammaJammer said:
Yeah the three salient Qs here are;

1) What are the T's and C's for the guaranteed stops?
2) Was there an additional premium payable?
3) What were the market circumstances surrounding the trade in question?
Click to expand...

1) this is an extract from the terms and conditions: "“Guaranteed Stop Loss Order”: This is a type of compulsory Automated Stop Loss Order (ASL – see above) that is executed at the precise level the order is placed. This type of order is not available for every market and its availability is dependent on the size of the trade in question."

At the time I was trading I was below the maximum value up to which they were proposing to execute guaranteed stops.

2)No. I agree that it would add weight to my case if I had paid a premium. However, I understood from their T&C's that they would fill my guaranteed stop at the correct level. They violated their T&C's and subsequently are in breach of a legally enforcable contract.

3) The trade was on Switzerland Index futures. An overnight move against me caused me a loss. I was relying on the guaranteed stop to protect me against this. Otherwise I would have not traded in a large size (for me!) of £13 per point
 
Jack Hughes said:
Complain to the FOS first, but be warned that it'll be months before anything happens.
Click to expand...

I am definitely considering it. I don't mind waiting, I just want to see justice done! I have posted the situation on here to get other trader's feedback on the matter.
 
How much did you *lose*? Please don't give me the; "it's the principal" line...
 
MikeYass said:
1) this is an extract from the terms and conditions: "“Guaranteed Stop Loss Order”: This is a type of compulsory Automated Stop Loss Order (ASL – see above) that is executed at the precise level the order is placed. This type of order is not available for every market and its availability is dependent on the size of the trade in question."

At the time I was trading I was below the maximum value up to which they were proposing to execute guaranteed stops.

2)No. I agree that it would add weight to my case if I had paid a premium. However, I understood from their T&C's that they would fill my guaranteed stop at the correct level. They violated their T&C's and subsequently are in breach of a legally enforcable contract.

3) The trade was on Switzerland Index futures. An overnight move against me caused me a loss. I was relying on the guaranteed stop to protect me against this. Otherwise I would have not traded in a large size (for me!) of £13 per point
Click to expand...

" ASL ", ok they r ggmarkets , sorry to mention the name of the firm but everyone should know about them ...
 
MikeYass said:
1) this is an extract from the terms and conditions: "“Guaranteed Stop Loss Order”: This is a type of compulsory Automated Stop Loss Order (ASL – see above) that is executed at the precise level the order is placed. This type of order is not available for every market and its availability is dependent on the size of the trade in question."

At the time I was trading I was below the maximum value up to which they were proposing to execute guaranteed stops.

2)No. I agree that it would add weight to my case if I had paid a premium. However, I understood from their T&C's that they would fill my guaranteed stop at the correct level. They violated their T&C's and subsequently are in breach of a legally enforcable contract.

3) The trade was on Switzerland Index futures. An overnight move against me caused me a loss. I was relying on the guaranteed stop to protect me against this. Otherwise I would have not traded in a large size (for me!) of £13 per point
Click to expand...

Sorry mate, but I think they've got you on this one; although it's called a "Guaranteed" stop loss, it doesn't seem to be the fill price thay they're guaranteeing, rather the execution price - that is, they wouldn't execute your order if the stop price was only bid/offered and never traded, that is the way I interpret it.

Also, your order was most probably a STOP -> MARKET order, rather than a STOP -> LIMIT (maybe they did execute a stop limit order but because the SMI gapped down you got a margin call instead?)

Moreover - I can't think of a straightforward way they can hedge this out. If the market is closed, where are they going to execute the offsetting part of your order? For the most part part you can send orders that can have only one of price or volume as the primary condition of the order, and not even that in some cases - LIMIT orders, where you specify the PRICE (or better)at which you are willing to deal, but you don't know in what volume (if any) you will get filled, or MARKET orders, where you specify the VOLUME you want, but can't be sure of the price you get 'em at (if there exists enough orders to fill it in the first place, a bit of a technicality really)

So, misleading - yes, but the order you thought you were getting doesn't exist for most punters. There might have been other bells and whistles thrown in too, for example your order might have had priority on their inventory of contracts over "regular" orders (i.e. they hedge you off = close your order first), but I'm sorry to say I reckon they've got you by the short and curlies.
 
MrGecko said:
Sorry mate, but I think they've got you on this one; although it's called a "Guaranteed" stop loss, it doesn't seem to be the fill price thay they're guaranteeing, rather the execution price - that is, they wouldn't execute your order if the stop price was only bid/offered and never traded, that is the way I interpret it.

Also, your order was most probably a STOP -> MARKET order, rather than a STOP -> LIMIT (maybe they did execute a stop limit order but because the SMI gapped down you got a margin call instead?)

Moreover - I can't think of a straightforward way they can hedge this out. If the market is closed, where are they going to execute the offsetting part of your order? For the most part part you can send orders that can have only one of price or volume as the primary condition of the order, and not even that in some cases - LIMIT orders, where you specify the PRICE (or better)at which you are willing to deal, but you don't know in what volume (if any) you will get filled, or MARKET orders, where you specify the VOLUME you want, but can't be sure of the price you get 'em at (if there exists enough orders to fill it in the first place, a bit of a technicality really)

So, misleading - yes, but the order you thought you were getting doesn't exist for most punters. There might have been other bells and whistles thrown in too, for example your order might have had priority on their inventory of contracts over "regular" orders (i.e. they hedge you off = close your order first), but I'm sorry to say I reckon they've got you by the short and curlies.
Click to expand...
This is a G stop not normal stop it doesnt matter if they can hedge it or not they should honour the stop , and if they cant they shouldnt offer it from the first place , we r talking about SB here not direct access market .
"We offer guaranteed auto‐stop losses on many of our markets. These
guaranteed stops are absolutely free and protect against an adverse movement
in the underlying market by closing out your open trade at precisely the level
that you specify. The GSMS value represents the maximum trade size that is
eligible for guarantee. For example, a GSMS value of 50 means that we will
guarantee every auto‐stop below (and including) a trade size of 50. Any autostops
that have a trade size greater than 50 would not be eligible for a
guarantee and would be treated as non‐guaranteed (subject to slippage).
Please note that not all products are eligible for the free guaranteed stop
feature."
 
Agree 100% with tar,

Question : For what reason did their compliance department reject your complaint?
 
I have never set a 'guaranteed' stop in SB. I always took the view that 'guaranteed' did not mean 'guaranteed under all circumstances regardless of any and every circumstance', and that therefore, the time when I would most need a 'guaranteed' stop would be when the small print would allow the SB firm to avoid activating it.

Of course, I have had some non-guaranteed stops occasionally not activated when I think they should have been - but over many trades, that has sometimes been to my financial advantage anyway that the position was left open.
 
You must log in or register to reply here.

Similar threads

bangkoker
FTSE100 index : gaps,slippage and guaranteed stops.
Replies
1
Views
2K
bangkoker
bangkoker
lurkerlurker
CMC Limit Order Slippage?
Replies
18
Views
7K
zoo
Z
R
Guaranteed stop loss?
Replies
2
Views
2K
itspossible
itspossible
fxwinner22
The Slippage Thread
Replies
5
Views
2K
Phil Mibbutz
P
R
Trading NFP Numbers with Guaranteed Stops
Replies
9
Views
3K
Sambar
S
Top