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  • #6,481
  • Jan 23, 2015 11:53am Jan 23, 2015 11:53am
Quoting Tom_D_Trader
{quote} Yep. Think it is time to move on, nothing unusual happened and perhaps think of buying FXCM stocks .
It is situations like this that we learn a lot about people: do they laugh at adversity and figure out a way to "adapt and overcome" or do they endlessly complain about it and wait for someone to fix it for them? Unfortunately, the second option seems to be the most popular.
  • #6,482
  • Jan 23, 2015 11:55am Jan 23, 2015 11:55am
I am only going to say one thing - counterparty risk management. The clever ones of you will understand what I mean and what is coming here.
  • #6,483
  • Jan 23, 2015 11:58am Jan 23, 2015 11:58am
Quoting Kanzler
{quote} I was thinking the same thing when I saw it at almost a dollar in an article but it's gone up already some since then. The company is still a quality company, they've secured their short term future with the loan, and the worst that can really happen is they sell out to another firm this year in which case your shares are certainly not going to be worthless. Buy when people are freaking out, sell when they're giddy with greed.
Still worth pennies . I actually dont have my futures and stocks account yet, thinking of it as long term investment and hoping I can manage it within a week.

4zznbrm: Screw em, they´r gonna calm down soon, just a Greece left, then business cash flow, few speeches and in few weeks market and these morons settle down.
"I know one thing, that I know nothing." Sokrates
  • #6,484
  • Jan 23, 2015 12:07pm Jan 23, 2015 12:07pm
Let me be clear that anyone who has a negative balance with FXCM will end up winning in Court.

A contract can be abusive or even illegal. And even if the contract is legal, the SNB decision and its consequences constituting a Force majeure event is really legally debatable.

Finally, no matter what the verdict will be regarding their force majeure point, the advertising material specifying the "no balance policy" will prevail. In all countries (in Europe at least,not sure about America) when it comes to retail clients protection the Financial professional party has to be as clean as white snow to hope to win. And it certainly ain't the case with FXCM. As a pro you just can't win when you are half lying, not matter the small lines.

I shall add that FXCM holds a fair share of responsibility in not preventing the loss sustained by most of its clients. When some competitors took measures to protect their clients by :

 

  1. releasing specific warnings about the risk that the peg might break and that the liquidity might vanish to a point that stops wouldnt be triggered. That negative balances might occur. That such break would constitute a force majeure if it was to happen
  2. reducing the leverage (as they are doing now),
  3. increasing the margin requirements (as they also are doing now)
  4. or by making the trade unavailable (FXCM did it for not long ago for the USD/RUB).


How come they did nothing when they had so many clients at risk in their book? How come they are the one who suffered the most from this event?

Legally Financial professionals have all those above responsibilities toward their clients. and in Europe many Courts would condemn FXCM for such lack of anticipation and lask of warnings and lack of measures to prevent the losses. Retail clients are idiots and are treated as such by Courts. FXCM had no right to be near as idiot as their clients. And they have.

  • #6,485
  • Jan 23, 2015 12:12pm Jan 23, 2015 12:12pm
Quoting n_aftab
My question is a UK based trader i have been with fxcm for some time now and never had an issue with them.. but should alarm bells be ringing now they have had a bail out with big interest rate payments tagged on? Are other people leaving to go elsewhere or are the majority staying and continue to trade with them? I know its a sensitive time for some ... i am not here to provoke or cause argument for anybody just wanted a discussion about the above.
Hi N_Aftab,

FXCM is in compliance with all regulatory capital requirements in the jurisdictions in which we operate, and FXCM is open for business. That means our clients continue to trade, deposit, and withdraw which traders have been mentioning on the thread For those that have chosen to wait and see, we will be here ready to help once you're ready to trade again.

As you can see from the chart I posted yesterday, FXCM clients have traded over 5 yards (5 billion Euros) in 4 out of the last 7 trading days in EUR/USD alone and are on pace to do so again today.
  • #6,486
  • Edited 12:39pm Jan 23, 2015 12:20pm | Edited 12:39pm
Quoting Kanzler
{quote} And let's take a look at the facts right now. First off, FXCM is not "turn[ing] out their lawyers" on you. I wouldn't be sitting here writing this reply in their defense if they were. They did have an agreement that they would credit to zero and I expect them to uphold that promise. If and when they choose to ignore that promise, then you will have the right to be angry and I will be angry alongside with you, even though I do not hold any negative balances. What you have is a letter "requesting" funds. The company is in some pretty bad shape...

So, FXCM transferred money from traders' positive accounts to cover some of the negative equity is these traders' underwater accounts but we still don't know if FXCM is going after clients beyond the total amount they have deposited in all their accounts. Yes, the email urges those people (only people who experienced transfer of equity from one account to another seem to have received it) to deposit more funds to cover the remaining negative equity ( if any), but let's wait to see if this is just a case of "if you chip in more we will appreciate it very much" or they will go after you for real
  • #6,487
  • Jan 23, 2015 12:26pm Jan 23, 2015 12:26pm
Quoting Kanzler
{quote} As someone else pointed out, FXCM didn't have enough to cover the losses while other big brokers did. Why? Because they weren't profiting from trader losses like some of the others were apparently. If they had been, they would have seen a huge windfall as all their clients went bust. Sure they make money on fees and commissions but let's get real, it's a company and it's out to make money. That's how the world works. For a broker, they really weren't making the killing you would expect if they were doing unethical things. The real question...
Apparently they have been inadquately capitalized to absorb a shock like this. Maybe if they didnt pay 15M dividend each year and overlever their balancesheet with pointless m&a and didnt offer 200:1 they would be fine? If Drew Niv and the rest of the board survives this clusterfk, it would be a HUGE joke.
  • #6,488
  • Jan 23, 2015 12:54pm Jan 23, 2015 12:54pm
Quoting Bilstein
{quote} Yeah, if I were a broker and 98% of my clients were long the EURCHF during the crash and I was trading against them, I'd forgive their negative balances too. Forget the 10 million you owe me in negative balances, the 20 million I siphoned from your losses is enough to buy me dinner, lol.
no broker will keep all their client positions on their book. Even DD brokers will hedge most of the risk above certain threshold otherwise they will blow up if market moves a lot in clients favor. So all brokers hedge their exposure - just DD will keep some on their book under a threshold - may be something like 1-5mm.

so no, DD brokers dont make a lot in this situation. brokers who didnt get hurt much in this are the ones who actively reduced CHF exposures by increasing margin or otherwise discouraging CHF positions. Also this was long one big gap - price moved fast but still there were trades done on prices from 1.20 to .85 (for EurCHF).
Think : Trade : Live Life
  • #6,489
  • Jan 23, 2015 1:10pm Jan 23, 2015 1:10pm
Its interesting to see that the word on the street is that Brokers do not go after clients. Its frowned upon in the industry and I would be shocked if FXCM decided to go this route. A cursory Google search on brokers going after clients provides no case studies ( other than a real estate broker asking for their commission). That said, its extremely uncommon if not impossible to have the negative balance situation escalate to court, collections or the like. Think of how many clients might claim FM and ask for their investments or losses back. Anyway, this is interesting to me and even though I have a manageable negative balance I will hold FXCM to their no debit policy responsibilities as stated in all the documentation they have.

Indecently, fm must hold up in litigation and most courts hold corporations to a high standard to agree to that. In fact, an article from a legal journal points to the high unlikelihood of courts such a ruling. Basically, most of those who exercise fm do so to get out of their contractual obligation.
  • #6,490
  • Jan 23, 2015 1:29pm Jan 23, 2015 1:29pm
Quoting Jason Rogers
{quote} Hi N_Aftab, FXCM is in compliance with all regulatory capital requirements in the jurisdictions in which we operate, and FXCM is open for business. That means our clients continue to trade, deposit, and withdraw which traders have been mentioning on the thread For those that have chosen to wait and see, we will be here ready to help once you're ready to trade again. As you can see from the chart I posted yesterday, FXCM clients have traded over 5 yards (5 billion...

Hi Jason,

thanks for the response, very unfortunate circumstances, hope it gets sorted in a fair manner for all.

N
  • #6,491
  • Jan 23, 2015 1:50pm Jan 23, 2015 1:50pm
Jason, i have a question regarding the Directional Real Volume indicator of the fxcm trading station.

I've attached below an image of eurchf, 4h chart.

We can see, the famous crash, the indicator show around 1,7 Million contracts (k) of net positive volume on that 4h candle, that should be around 17000 Lots (impressive!).

We know in such time a lot of stoplosses were hitten, so "SellStops" orders, i presume the number is the one above.

The question then is, shouldn't the indicator show 1.7M net negative volume (as it was all about sellstop orders being executed, aka sells, and not buys)?

Thank you very much
Attached Image (click to enlarge)
Click to Enlarge Name: Untitled.png Size: 29 KB
  • #6,492
  • Jan 23, 2015 2:35pm Jan 23, 2015 2:35pm
I thought I would share this article : http://www.dailyfx.com/forex/fundame...-in-Focus.html

This is directly from fxcm and this event was indeed anticipated; hardly a fm!
  • #6,493
  • Jan 23, 2015 2:44pm Jan 23, 2015 2:44pm
Quoting euler123
I thought I would share this article : http://www.dailyfx.com/forex/fundame...-in-Focus.html This is directly from fxcm and this event was indeed anticipated; hardly a fm!
I'd say that's pretty strong evidence against the slim chance they had of claiming fm
  • #6,494
  • Jan 23, 2015 3:15pm Jan 23, 2015 3:15pm
Quoting Profit Daily
{quote} I'd say that's pretty strong evidence against the slim chance they had of claiming fm
a 2000 pip drop was pretty unexpected .. even by the big banks .. not sure can be called a fm though .. no doubt they will try though,

But fxcm could see the massive build up of 1 sided longs on this so they could have hedged it better perhaps.
  • #6,495
  • Jan 23, 2015 3:58pm Jan 23, 2015 3:58pm
Quoting spaceduck
Jason, i have a question regarding the Directional Real Volume indicator of the fxcm trading station. I've attached below an image of eurchf, 4h chart. We can see, the famous crash, the indicator show around 1,7 Million contracts (k) of net positive volume on that 4h candle, that should be around 17000 Lots (impressive!). We know in such time a lot of stoplosses were hitten, so "SellStops" orders, i presume the number is the one above. The question then is, shouldn't the indicator show 1.7M net negative volume (as it was all about sellstop orders...
You're right, Spaceduck. The DRV should display as net negative in this case. This issue is currently being investigated by our programmers.
  • #6,496
  • Jan 23, 2015 4:36pm Jan 23, 2015 4:36pm
Quoting Jason Rogers
{quote} Hi N_Aftab, FXCM is in compliance with all regulatory capital requirements in the jurisdictions in which we operate, and FXCM is open for business. That means our clients continue to trade, deposit, and withdraw which traders have been mentioning on the thread For those that have chosen to wait and see, we will be here ready to help once you're ready to trade again. As you can see from the chart I posted yesterday, FXCM clients have traded over 5 yards (5 billion...
Hi Jason! Please keep us up to date about about how things are going on at FXCM. Seeing monthly metrics and infomration on how much has been traded over the last days is encouraging. As a devoted FXCM client, (that did not trade CHF and never had any issues with the company), I have every interest in ensuring that your company survives. Good luck. I am cutting my exposure a bit, but not withdrawing my funds. Watching, hoping...
  • #6,497
  • Jan 23, 2015 4:43pm Jan 23, 2015 4:43pm
Quoting Jason Rogers
{quote} Hi N_Aftab, FXCM is in compliance with all regulatory capital requirements in the jurisdictions in which we operate, and FXCM is open for business. That means our clients continue to trade, deposit, and withdraw which traders have been mentioning on the thread For those that have chosen to wait and see, we will be here ready to help once you're ready to trade again. As you can see from the chart I posted yesterday, FXCM clients have traded over 5 yards (5 billion...
FXCM open for business is a correct statement.

Now " in compliance with all regulatory capital requirements" I'm not so sure!!

The lawyers are looking into it, so we have to wait and see.

I don't think any incarnation of Jason Rogers popping here to answer questions have a clue about what is going on FXCMs very top.

I hate to see this happening to FXCM because I had a very good experience with them. I had to withdraw, and I'm out until the dust settles, but I hope to do business with them again.
So, you think you have rights? LOL
  • #6,498
  • Jan 23, 2015 5:34pm Jan 23, 2015 5:34pm
http://www.forexlive.com/blog/2015/0...tive-balances/

Not sure why this article hasn't been posted in the news but it seems pretty obvious that FXCM may leave the US in favor of the deregulated anything goes wild west
Asia for their profitability. If you go on youtube and check out
Inserted Video
this is what the trend has been. North America keeps shrinking while Asia has like 500 brokers and high leverage. Totally unfair.
  • #6,499
  • Jan 23, 2015 5:39pm Jan 23, 2015 5:39pm
Hello Everyone.

Before I head out for the day, here's an FXCM business update we just released:

Strong Operating Metrics


Through Thursday, January 22, FXCM's month-to-date retail customer trading volume, which includes all retail FX and CFD volume, is $406 billion* with 30% coming from the last 5 days alone, which included a U.S. bank holiday. Average retail customer trading volume per day during this period is $27 billion.* As of January 22, tradable accounts were 224,547, and client equity was $1 billion.


"A week after the unprecedented movement of the Swiss Franc, and our financing agreement with Leucadia, FXCM continues to operate in the normal course of business. All of our entities have capital in excess of regulatory requirements. As our month-to-date metrics show, FXCM continues to be a global leader in retail FX with volumes on pace to set a record. We are especially thankful for our customers' loyalty and support," said Drew Niv CEO of FXCM.


Niv continued, "The financing we received from Leucadia has strengthened our balance sheet and gives us the opportunity to grow our core business while reducing our debt through the sale of non-core assets. We anticipate that the proceeds from these sales and continued earnings, we can meet both near and long term obligations of our financing, while preserving the strength of our franchise."


Richard B. Handler, Chief Executive Officer, and Brian P. Friedman, President of Leucadia, commented: "We view FXCM as our next opportunity to work with an investee company to create long-term value for all stakeholders, including FXCM's dedicated employees and customers. We look forward to assisting Drew Niv and his team to develop the liquidity opportunities to repay last week's emergency financing and then, as the long-term investors we are, to exercising the patience and diligence needed to maximize the value of FXCM over time as we strive to do for every investment in our portfolio, many of which we have held for the long term, and, in some cases, for over a decade."


*Amount excludes volume generated by clients with negative balances following the Swiss National Bank's decision to abandon the maximum exchange rate of 1.2 Swiss Francs per Euro.


Full statement: http://ir.fxcm.com/releasedetail.cfm?ReleaseID=892716


As our CEO Drew mentioned, thank you to our traders for your continued support. I appreciate your patience while we work on answers to your most pressing questions, and I will continue to provide more information as I am able to.

Have a great weekend!

Jason
  • #6,500
  • Jan 23, 2015 6:32pm Jan 23, 2015 6:32pm
Ouch. Customer equity was $1.3bn in early Jannuary, so down about 25% in a week.
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