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  • #6,201
  • Jan 20, 2015 2:45am Jan 20, 2015 2:45am
Quoting MoreYummy
{quote} How about Oanda? How much did they lose in this event?
Attached Image (click to enlarge)
Click to Enlarge Name: FXCM - Losses 4.PNG Size: 54 KB

Real time updates - http://forexmagnates.com/forex-industry-battles-eurchf-meltdown-real-time-updates/
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  • #6,202
  • Jan 20, 2015 4:05am Jan 20, 2015 4:05am
WOW: FXCM down over 70% pre market on news that Company agree to be sold if requested by Leucadia (who will receive 50% of up to USD 350mln) in 3yrs


So, what's happening in here?
  • #6,203
  • Jan 20, 2015 5:37am Jan 20, 2015 5:37am
Quoting tim10167
To my fellow trader friends based in Australia: I recently logged an ASIC (Australian Securities & Investment Commission) claim and the progress is very positive. I couldn’t say much more about my case because it is confidential at the moment but I encourage everyone who suffered a negative balance on your account and is chased by your brokers to stand up and report to ASIC. Don’t get scared by the contract you signed with your broker. Why? because government regulatory entities is on top of the contractual law in almost any country. ASIC looks...
what about accounts that are not in negative teritorry but suffered a huge losses as well due to SL orders have not been triggered although placed several months ago?
  • #6,204
  • Jan 20, 2015 5:39am Jan 20, 2015 5:39am
This a very difficult situation for FXCM. On one side they have massive client losses and they say that the retail traders (I bet they were most hit) compose 70% from their client base. On the other side they would have to fill in the cash gap and repay the money that this deal with Leucadia had brought them. Now, if they start chasing after their negative client losses it will make existing clients and future clients go to brokers who managed risk well and have forgiven negative balances as it will ensure them that they cannot lose more than they deposit. So in that case they will lose a chunk of their income. Another thing, I believe those who have negative losses will have difficulty repaying them, since they will probably be broke and FXCM will not be able to liquidate anything or at least not nearly enough. Those same guys will never trade again (they are broke) so another income source is gone.
IMO FXCM will need to make radical changes if they are to survive. Let's be honest, as someone in this thread said, he doesn't care if he's trading through a DD or NDD; he wants as a client to be protected from negative balance and to be certain his SL works, so if it means trading through DD then so be it. My point is FXCM should consider using DD in the future and using it as an income source. Maybe a good move will be to forgive negative losses. As they already claim that everywhere on their site, and as their name popped up everywhere in this business in the past few days, it would be a good PR (Imagine: "FXCM takes 225 million loss to protect its clients" - well, someone with better copywriting skills will certainly make it sound more powerful), and clients (existing and future) will consider using the broker and staying with them as they will prove to be leaders in the market. Also, some of the traders who got burned might recover, and they might be back trading and be again a source of income. But as I said, FXCM will need to make changes (DD, higher margin req, lower leverage, and so on.) to make sure they never lose this kind of money again.
Tough times for employees in FXCM and their clients. I really hope it all works out.
  • #6,205
  • Jan 20, 2015 5:45am Jan 20, 2015 5:45am
Alpari Japan takes a headshot!

http://www.forexfactory.com/news.php?do=news&id=522585
Chasing The Dream...
  • #6,206
  • Jan 20, 2015 5:49am Jan 20, 2015 5:49am
Quoting stoplossmatt
{quote} what about accounts that are not in negative teritorry but suffered a huge losses as well due to SL orders have not been triggered although placed several months ago?
If stop loss failed and the slipperage goes down in a big way that caused you abnormal losses. I encourage you to report as well. Because from the regulator’s perspective, they demand brokers to have various measures in place to provide a more stable environment. If regulator thinks a broker doesn’t have the ability to provide a “more” stable environment, they will simply shut the broker off from business. Please see my previous thread on the two articles on how ASIC shut down brokage companies.
  • #6,207
  • Jan 20, 2015 5:54am Jan 20, 2015 5:54am
Quoting tim10167
To my fellow trader friends based in Australia: I recently logged an ASIC (Australian Securities & Investment Commission) claim and the progress is very positive. I couldn’t say much more about my case because it is confidential at the moment but I encourage everyone who suffered a negative balance on your account and is chased by your brokers to stand up and report to ASIC. Don’t get scared by the contract you signed with your broker. Why? because government regulatory entities is on top of the contractual law in almost any country......
Great work tim! I am also with FXCM Australia though living and trading in another Asian country. I am wondering should I also lodge a report to the ASIC for my huge negative balance with FXCM? However, I have not received any call and email from FXCM yet regarding my negative balance, maybe just because I am too far away from them. However my account is still in negative at the moment.

Do you mind provide me some more information on lodging the report? I will also go through the ASIC website and prepare whatever information I have on hand. Once again, thumbs up for your effort! Cheers mate.

My email: [email protected]
  • #6,208
  • Jan 20, 2015 5:54am Jan 20, 2015 5:54am
To my fellow trader friends based in Australia:

I recently logged an ASIC (Australian Securities & Investment Commission) claim and the progress is very positive. I couldn’t say much more about my case because it is confidential at the moment but I encourage everyone who suffered a negative balance on your account and is chased by your brokers to stand up and report to ASIC.
Don’t get scared by the contract you signed with your broker. Why? because government regulatory entities is on top of the contractual law in almost any country. ASIC looks way beyond the wordings of the contract. They look at numerous things such as how brokerage companies advertise and communicate to their clients, mismanagement of risk to protect their clients….etc. Brokers such as FXCM who advertised “It is their policy to credit retail trading accounts to a zero balance when debit balances occur as a result of trading on FX or CFDs” is clearly a breach of the ASIC regulatory law.
FXCM has no risk management at all. On the other hand, companies like forex.com (Gain Capital) did the right thing with their risk management in the past 12 months by implementing various protective measures.

So, how effective and powerful ASIC is? Please look at the following two articles and see how many FX brokage companies ASIC forced to close in the past year in Australia:
http://leaprate.com/2014/10/asic-tak...federal-court/
http://forexmagnates.com/asic-forces...try-crackdown/

These two articles tells us when we report a claim to ASIC, we should include every possible evidence we can provide because ASIC has a much broader view on how these brokage firms should be regulated. No evidence is too small. Provide everything from your emails, live chats, broker’s advertisement, news articles…….etc.

This is the web link to report to ASIC, let us all work together so we can make a change to protect our rights:
http://asic.gov.au/about-asic/contac...r-trading-etc/

I am not saying we traders shouldn’t bear the risk ourselves. But for account to go into deep negative territory, brokers who failed to have the protective measures in place needs to bear a lot of responsibilities as well.
  • #6,209
  • Jan 20, 2015 6:51am Jan 20, 2015 6:51am
Retail forex broker FXCM Inc (NYSE:FXCM) has just released more details on the $300 million lifeline provided by investment company Leucadia National Corp (NYSE:LUK), which will allow FXCM to remain onside its regulatory obligations after $225 million in losses suffered due to negative client balances in the wake of last week’s Swiss Franc move.
The deal has a somewhat complicated structure, but the key points are:

  1. FXCM will be paying Leucadia interest of 10% on the $300 million loan. But that interest rate will rise by 1.5% each quarter, to a maximum of 17%. (The maximum would be hit in early 2016, if it remains outstanding that long.
  2. Leucadia has the right to force FXCM to sell all its operations in three years.
  3. In the event of a sale of FXCM (technically a new subsidiary called ‘FXCM Newco’, but that’s just structuring), Leucadia will get at least half of the sale proceeds, after being paid back in full on its loan.
  4. If the sale exceeds a certain amount (could vary between $500 million and $680 million), Leucadia gets even more.


Full article: http://leaprate.com/2015/01/fxcm-leu...after-3-years/


Looks like Jefferies will do very well out of this. That's a hell of a repayment structure too, compound interest's a bitch. Must have been desperate.

"Risk comes from not knowing what you're doing." - Warren Buffett
  • #6,210
  • Jan 20, 2015 7:09am Jan 20, 2015 7:09am
Global Shockwaves To Come From Swiss Currency Bombshell

Inserted Video
Chasing The Dream...
  • #6,211
  • Jan 20, 2015 8:46am Jan 20, 2015 8:46am
Jason,

US accounts have a leverage limit of 50 which is good for me. My question is, did the SNB blindside cause US accounts to go negative or was it primarily accounts in other countries that have much higher margin? I have a small FXCM account, but still primarily trade Oanda, but the spread difference makes me want to favor FXCM. At 50 leverage what is my max risk if I use a 10-20 pip SL?
  • #6,212
  • Jan 20, 2015 9:28am Jan 20, 2015 9:28am
Hello, I'm a reporter with The Wall Street Journal and I'm looking to interview anyone who is grappling with negative account balances after trading the Swiss franc through FXCM or other retail brokers. You can reach me via email: james dot ramage at wsj.com
  • #6,213
  • Jan 20, 2015 9:53am Jan 20, 2015 9:53am
Quoting Poolsuckswat
{quote} Hi Jason, welcome back! your standard is way up from $50 to $2000 minimum. i've been with you forever, but moved most of my capital to IB to trade more markets. still have $1600 or so with you (which I don't want to withdraw based on recent hysteria). question: can i trade this amount or do i have to fund it until it covers your minimum? otherwise, does it apply to all accounts or only to people opening an account with you from now on? thanks! and wish you all the best!
Hi Poolsuckswat,

The $2000 account minimum is for opening a new account. It doesn't apply to existing accounts.

Thanks for a being a long-time client of FXCM!
  • #6,214
  • Jan 20, 2015 12:09pm Jan 20, 2015 12:09pm
Bloomberg are reporting that FXCM owners are bankrupt due to SNB move and a sale of the business is being forced... can you comment?

Also, The company's stock is down 86 per cent.
Attached Image
  • #6,215
  • Jan 20, 2015 12:34pm Jan 20, 2015 12:34pm
Quoting TranceTrader
Bloomberg are reporting that FXCM owners are bankrupt due to SNB move and a sale of the business is being forced... can you comment? Also, The company's stock is down 86 per cent. {image}
Under the terms of the loan agreement, a sale can be forced by Leucadia, but as far as I know they aren't being sold just yet. Can you link the story if they are infact being forced to sell?

Edit: just noticed that Leucadia CEO is called Richard Handler. Seriously? Dick Handler?! What were his parents thinking?
"Risk comes from not knowing what you're doing." - Warren Buffett
  • #6,216
  • Jan 20, 2015 12:37pm Jan 20, 2015 12:37pm
You're correct, I seem to have missed the "can" be forced. I can't link sorry I'm just watching bloomberg TV.

The loan terms are crazy, 10% on $300 million due to rise... the market didn't like it, 86% drop, ouch.
  • #6,217
  • Jan 20, 2015 12:38pm Jan 20, 2015 12:38pm
Quoting Spili
{quote} Under the terms of the loan agreement, a sale can be forced by Leucadia, but as far as I know they aren't being sold just yet. Can you link the story if they are infact being forced to sell? Edit: just noticed that Leucadia CEO is called Richard Handler. Seriously? Dick Handler?! What were his parents thinking?

Run for your life!!!

FXCM revealed last night that the interest rate on the two-year loan can rise to as high as 17 percent. On top of that, Leucadia will receive at least half of the proceeds from a sale.
FXCM probably will try to sell itself by April and stockholders would keep 10 percent of the proceeds, Katz wrote in the report. The company faces “punitive” financial terms if there’s no sale by then, he said.


http://www.bloomberg.com/news/2015-0...brokerage.html
Chasing The Dream...
  • #6,218
  • Jan 20, 2015 12:47pm Jan 20, 2015 12:47pm
Yes and yes. - see my post above for the leaprate article - rising interest rate, loan paid off and half the profit from a sale. That's not an agreement, that's an ass raping.
"Risk comes from not knowing what you're doing." - Warren Buffett
  • #6,219
  • Jan 20, 2015 1:01pm Jan 20, 2015 1:01pm
Quoting Spili
Yes and yes. - see my post above for the leaprate article - rising interest rate, loan paid off and half the profit from a sale. That's not an agreement, that's an ass raping.
And if you look at their income statement, it would be impossible for them to pay off the loan. Customers accounts were wiped out (so they have no money to trade), and I would image a lot of clients are fleeing. Especially since they refuse to answer the question if they are going to wipe out the negative balances.
  • #6,220
  • Jan 20, 2015 1:08pm Jan 20, 2015 1:08pm
Quoting TheGrind
{quote} And if you look at their income statement, it would be impossible for them to pay off the loan. Customers accounts were wiped out (so they have no money to trade), and I would image a lot of clients are fleeing. Especially since they refuse to answer the question if they are going to wipe out the negative balances.

Too right! $300m for a brand and a platform. Whilst the terms of the loan are real kick in the balls, you've got to question the logic.
"Risk comes from not knowing what you're doing." - Warren Buffett
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