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FXCM Discussion

  • #5,921
  • Jan 16, 2015 9:06am Jan 16, 2015 9:06am
Can you imagine if someone opened a 10k account with 1:200 leverage shorted EURCHF. 2000*10 = 20000 loses! FXCM has to cover the loses with their assets. It's actually a very sad story. Leverage actually is the tool for retail trades like most of us to make money but it's also a knife that will stabbed our back. It's also the same for the brokers.
  • #5,922
  • Jan 16, 2015 9:07am Jan 16, 2015 9:07am
Quoting goldfinch
{quote} This whole mess will open the debate again about leverage. 50:1 is obviously still too high. An event like this bankrupted quite a few brokers. We haven't heard from hedge funds yet, I will guarantee you that a few went bust yesterday.
i don't think it is the leverage issue. US leverage is lowest among all countries allowed. FXCM was caught with its pants down on their risk management department. They must still had to protect their own interest. They will need to restructure their risk department ASAP.
Trade what you see, not what you think!
  • #5,923
  • Jan 16, 2015 9:09am Jan 16, 2015 9:09am
Quoting ckwong622
Can you imagine if someone opened a 10k account with 1:200 leverage shorted EURCHF. 2000*10 = 20000 loses! FXCM has to cover the loses with their assets. It's actually a very sad story. Leverage actually is the tool for retail trades like most of us to make money but it's also a knife that will stabbed our back. It's also the same for the brokers.
Well what they should have is some type of mechanism in play so that if a currency or commodity gaps a certain percentage, things are halted and stops dealt with so that the system does collapse in 1 minute.
  • #5,924
  • Jan 16, 2015 9:10am Jan 16, 2015 9:10am
Quoting pipster1
{quote} Well what they should have is some type of mechanism in play so that if a currency or commodity gaps a certain percentage, things are halted and stops dealt with so that the system does collapse in 1 minute.
..or just make currency, options, futures, and commodity speculation illegal and normal rates to 5%. I would be happy with this.
  • #5,925
  • Jan 16, 2015 9:10am Jan 16, 2015 9:10am
I really hope FXCM will pull through this. I like their platform and never had much issues with them. If they go under something tells me we will be able to get our equity out. Let's wait and see what they have to say - http://ir.fxcm.com/releases.cfm
  • #5,926
  • Jan 16, 2015 9:12am Jan 16, 2015 9:12am
Quoting OMGtrader
{quote} i don't think it is the leverage issue. US leverage is lowest among all countries allowed. FXCM was caught with its pants down on their risk management department. They must still had to protect their own interest. They will need to restructure their risk department ASAP.
Of course it does, all this plays directly into the hands of the CFTC who wanted to maximize leverage 1:10 a couple of years ago but went along with 1:50.
  • #5,927
  • Jan 16, 2015 9:12am Jan 16, 2015 9:12am
Quoting pipster1
{quote} Well what they should have is some type of mechanism in play so that if a currency or commodity gaps a certain percentage, things are halted and stops dealt with so that the system does collapse in 1 minute.

You can't as an ECN, those trades are long gone and by the time they get filled and get back to you, the deed is done.

A market maker is a different story, that's why today you see all the ECN's in trouble while the MM's are fine.
A contrarian; I always disagree.
  • #5,928
  • Jan 16, 2015 9:12am Jan 16, 2015 9:12am
Quoting goldfinch
{quote} This whole mess will open the debate again about leverage. 50:1 is obviously still too high. An event like this bankrupted quite a few brokers. We haven't heard from hedge funds yet, I will guarantee you that a few went bust yesterday.
You have to remember that 50:1 was the leverage which concerned retail traders no institutions. The main problem now is with covering the gap which FXCM has on their LP accounts and money which are in their disposal on their accounts. The negative balances on their clients accounts will be very hard to retrieve.
  • #5,929
  • Jan 16, 2015 9:12am Jan 16, 2015 9:12am
Quoting pipster1
{quote} Well what they should have is some type of mechanism in play so that if a currency or commodity gaps a certain percentage, things are halted and stops dealt with so that the system does collapse in 1 minute.
That sir is what regulated futures exchanges offer...CME halted trading in USDCHF 10 times for a period of 10 seconds over a 10 minute period. This is called Velocity Logic on CME.
  • #5,930
  • Jan 16, 2015 9:13am Jan 16, 2015 9:13am
http://blogs.barrons.com/focusonfunds/
  • #5,931
  • Jan 16, 2015 9:13am Jan 16, 2015 9:13am
Quoting KeyframeHR
I really hope FXCM will pull through this. I like their platform and never had much issues with them. If they go under something tells me we will be able to get our equity out. Let's wait and see what they have to say - http://ir.fxcm.com/releases.cfm
from their balance sheet, looks like client money are segregated from operating. This means without extra cash FXCM cannot continue to be a broker but the business have enough assets to payoff their debts/creditors. It is a forced closure of the business not a bankruptcy.
Trade what you see, not what you think!
  • #5,932
  • Jan 16, 2015 9:15am Jan 16, 2015 9:15am
Is our fund still safe? what will happen to our opened trades? anyone has any further updates directly from fxcm customer service?
  • #5,933
  • Jan 16, 2015 9:17am Jan 16, 2015 9:17am
Are you able to log in to your trading accounts in FXCM ?
  • #5,934
  • Jan 16, 2015 9:21am Jan 16, 2015 9:21am
Quoting NashvilleFX
Is our fund still safe? what will happen to our opened trades? anyone has any further updates directly from fxcm customer service?
if FXCM shuts down, they you will be forced to close your existing positions, manually or automatically. I do think our funds are safe.
Trade what you see, not what you think!
  • #5,935
  • Jan 16, 2015 9:21am Jan 16, 2015 9:21am
Quoting NashvilleFX
Is our fund still safe? what will happen to our opened trades? anyone has any further updates directly from fxcm customer service?
The live feed is still running...... Missed a beautiful GU short by the way.

Customer service will not say anything. The guy I was talking to mentioned he might be out of a job after working there for many years.

Right now they are in the board room passing around the whiskey bottle, drawing straws to see who has to give the announcement to the press.
  • #5,936
  • Jan 16, 2015 9:21am Jan 16, 2015 9:21am
Quoting OMGtrader
{quote} if FXCM shuts down, they you will be forced to close your existing positions, manually or automatically. I do think our funds are safe.
Dude I hope you are right
  • #5,937
  • Jan 16, 2015 9:22am Jan 16, 2015 9:22am
Quoting tomas.v
Are you able to log in to your trading accounts in FXCM ?
yes
Trade what you see, not what you think!
  • #5,938
  • Jan 16, 2015 9:22am Jan 16, 2015 9:22am
Interactive brokers, account negative balance 120 M usd
Alpari UK is bankrupt.
• FXCM is dealing with negative client equity balances of approximately $225 million, and as a result may be in breach of some regulatory capital requirements.
• Swissquote sets CHF 25 million provision for negative client balances.
• IG Group states that losses could reach £30 million.
• London Capital Group says Swiss Franc losses will not exceed £1.7 million.
• Excel Markets informs clients they are out of business on CHF plunge.
  • #5,939
  • Jan 16, 2015 9:23am Jan 16, 2015 9:23am
login is fine, but much slower than usual. no surprises of the traffic there. trades are still opened...not so sure until when...another drama after being sold by IBFX to FXCM...and...this one is very uncomfortable.
  • #5,940
  • Jan 16, 2015 9:25am Jan 16, 2015 9:25am
Quoting pipster1
I wish they would let me know so I can go short the EU with a 50 lot. Would rather lose it that way, guns blazing, instead of bankruptcy.
This made me laugh

I pictured a guy typing in 50 lot market, hitting sell. then flipping the desk over.
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