Ok, here’s the post that we’ll keep as a central place to file all the news under. Anything to do with brokers etc we’ll post individually then file in here after. If you receive any news from your brokers that you feel we should share then drop it in the comments and we’ll add it.
Under no circumstances will we accept any unsubstantiated rumours and any info will need to be backed up with a link or an official mark, i.e email with company logo.
Any views that we may give to our own personal circumstances will not be the basis for any legal representation, i.e if i say I’m going to tell XYZ broker to go whistle for their money, that’s not a cue for you to do the same
There are going to be some hard and trying times for you and your money and you should take whatever action you deem necessary to keep that money safe. Ask any questions you like but be aware that we’re not lawyers nor have we the finite knowledge of the regulations.
This thread is designed to help people who are probably a little scared right now and unsure what to do. This thread will be used for constructive and helpful comments only. Any comments that don’t fit that parameter will be deleted instantly. This will not be the place for the ‘I told you so”s and the trading hindsight wizards.
Here’s the run of stories so far;
- Expect a long wait over the retail mess in Swiss positions 15/01
- All open trades being pulled from retail trading platforms 15/01 (relates to Alpari)
- SNB move could cause liquidation in popular trades 15/01
- IG drops a potential £30m after SNB drops 1.20 floor 15/01
- The tide has gone out for FX brokers after the EUR/CHF collapse 15/01
- Forex broker Excel Markets calls it quits on SNB shocker 15/01
- GAIN Capital says ‘no material impact’ from Swiss franc 15/01
- EUR/CHF – Saxo Bank says will revisit Swiss franc trades, clients may suffer 16/01
- FXCM warns it may be in breach of capital requirements in wake of CHF volatility 16/01
- More on FXCM warning it may be in breach of capital requirements in wake of CHF volatility 16/01
- Alpari UK enters insolvency – Rtrs 16/01
- London Capital Group says company is well capitalised. CHF forex movements have had no material impact 16/01
- Saxo bank’s risk holds – Forexmagnates 16/01
- CMC markets sustains losses on SNB move but with no material impact on group 16/01
- Dukascopy, FXTM sound the all clear, FXOpen ceases CHF trading 16/01
- FXPro solidly capitalised, Avatrade not materially affected after SNB chaos 16/01
- FXCM under the gun with shares halted 16/01 Update: Statement being issued around 2pm ET
- Interactive Brokers shares fall 7% after $120m client loss, Oanda and others add to the “all clear list” 16/01
- Alpari UK to start “program of financial recovery” 16/01
- Swissquote activates CHF25m provisions, bank remains solid
- Leucadia to give FXCM $300m in financing
- Statement: FXDD open for business, minimal impact from CHF
- Broker XTB says it’s business as usual, takes a shot at SNB
- Citigroup said to lose more than $150m on currency moves
- Oanda wins points for quickly forgiving negative balances
- Forexmagnates has a list of others
- Forex Crunch does as well
- Why Gain and Saxo deserve some extra credit 17/01
- Orbex says operations not negatively affected by Swiss franc
- Alpari administrator says Alpari UK holds $98.5m in retail client money 19/01
- Dukascopy clears negative client balances
- Interest rate on FXCM bailout could hit 17% – Still no word on negative client balances 20/01
- Saxo to raise CHF trading margin by 15%
- Administors release advice to Alpari UK customers – Will be looking to recover negative client balances
- Major European hedge fund takes a hit on SNB fallout 20/01
- Alpari shareholder wanted to wind up parent company in January 2014 21/01
- Here’s a list of brokers forgiving negative balances and those not or undecided
- Gain Capital says it will forgive negative client balances
- FXCM raises forex margins, no word on negative balances
- Law firm launches investigation into FXCM 22/01
- Margin requirements raised by the NFA for Swiss Franc, Swedish Krona and Norwegian Krone
- Saxo bank chasing negative balances while brokers try to entice Alpari clients
- Iron FX confirms it’s making a bid for Alpari UK
- Oanda enters the race to buy Alpari UK 23/01
We’ve got several main issues that are unclear so I’ll try to address them. These are just my thoughts and how I’m looking at dealing with things. The other chaps may want to add their own thoughts.
Q1. What’s happened to my trades and the fills I have received on stops?
That’s a big question and one that is unclear right now. Many of you (me included) have been filled at levels way off of our original stop levels. As I’ve said often make sure you read your broker’s terms and ses if you have grounds for complaint. As far as I can tell the retail market doesn’t really have a clue where any fills are or what levels are real or not. This move is unprecedented and will take a while to sort out. When it becomes clear then I’m going to start questioning fills. That might lead to nothing but I’m going to make sure I have the best info available from the market. I’m not saying I’m refusing to accept, or am trying to wriggle my way out of a loss, but that I want to make sure I’m being dealt the correct hand.
Q2. My account has been smoked and is in a loss and I owe the broker money. What do I do?
I’m in the same boat on one of my accounts. It’s showing a big red negative number. I had all my trades closed yesterday, even ones that we’re in different currencies and in profit. Until I get a clear indication from the broker as to what is going on I’m doing nothing. Under no circumstances will I be paying any demands to clear the loss until I’m satisfied that the amount is correct and I’m happy with all fills and that the broker has fulfilled their duties correctly.
Q3. I didn’t have Swiss trades but I’m worried about my money and my broker being solvent, should I pull all my money?
I’m actually a little shocked that firms like Alpari and FXCM have had troubles. I was expecting a raft of smaller brokers to go belly up but not to see such problems at the big boys is a concern. It just shows the magnitude of the problem and it’s going to take a while to sort out. I’m not going to tell anyone to pull all their money out and go running to the hills but it’s your money and only you should make the decision how best to safeguard it. Check out your broker’s regulatory position and make sure your funds are segregated and what protection you have from your financial authority and/or government. What we are likely top see over the coming days and weeks is an upheaval in the retail industry. There are brokers that have come through unscaved and so will gain a reputation for security. Irrespective of that this is an opportunity to do your homework on brokers and find the ones you feel safe with. Not all brokers are bandits and not all brokers are after your life savings. Making sure you pick a regulated and safe broker is solely down to you. Search the web (trade2win.com forums is a good place to start) and speak to other people.
Q4. Help, my broker has gone bust, what do I do?
Check your brokers regulatory listing and all communication. I don’t actually know what happens when a broker goes bust as fortunately I’ve never had that experience. My main swiss trades were with Alpari so I’m in a bit of limbo too. As I’ve stated above if I get any demands for monies they’ll get short shrift from me until I’m happy the account is correct. If anyone tries to threaten or intimidate I’ll tell them to speak to my lawyer. If you get the same reaction then I would suggest that your own seek legal council before paying any money. Don’t give in to any threats as that’s not the way things work, in this country anyway.
Q5. What could I have done to avoid this?
In reality, not a lot. Due to the nature of this event the market completely disappeared from under us all, retail, institution, interbank etc. It is unprecedented but it is also the nature of the beast. It can and probably will happen again. Unless you get guaranteed stops then we have to live with what we’ve got. There are ways to minimise any detrimental affects. A lot is made of leverage and that’s going to be one of the blame words for this situation. Leverage is fine if you use it to your benefit. I use leverage purely so I don’t have to put a big whack of money into a broker account. I can keep all my money safe in my bank and keep a bare minimum needed for margin in my trading account (usually around 5-10%) and I then use the leverage as my trading margin. If you have 10k and you put it all into an account and use leverage to trade as if you have 100k you’re asking for trouble. I use leverage as a money management tool for my hard earned cash. In the case of my Alpari account, my money is sitting in my bank and I’ve potentially only lost a small percentage. It also means that the big loss sitting on there now is their money not mine. Again, that’s not me refusing to fulfil my obligation to my losses but that they will be chasing their money instead of me trying to claw back any of mine. This is not advice in how to do things yourself but just how I approach things. You should make any judgement for yourself but ask yourself some serious questions before you commit your money to trading.
Q6. Is this the end of trading for me?
Of course not. For some it’s a realisation that this isn’t the game for them. For others it will bring greater caution. For all of us it’s a wake up call. You all know how I was playing the swiss trade for the last few years. I traded it always with the understanding that the SNB could do this. To me the SNB cap lowered the risk of the trade and I was happy to play against that. Of course I was never expecting this type of reaction to it being pulled. A big reaction yes, but not to this scale. That unfortunately is the market though and there is no black and white outcome except we win or lose. The confidence has taken a knock but I’ve been here before and the trading outside of CHF was doing fine, so I’m largely indifferent to this event affecting me overall.
I’ll repeat that these are my thoughts and my possible actions on this matter and it is up to you to seek advice of your own.
I hope that many of you haven’t been put off trading and that you haven’t lost too much money or that any losses are sensibly adjusted. If you have any questions then fire away and just as importantly, if you have any advice for other readers then add that too.
I’ll keep updating this post so please use it for your information
Update 16/01 12.20: Something to bear in mind as we bring the news out. If we report that a broker has declared themselves fit and well it does not mean that there haven’t been issues with trades at that broker. That’s an issue you have to take up individually. At the very least it’s some comfort that they are still operational.