FXCM Major Currency Broker In Trouble

[jjgold]

NEW YORK, Jan. 15, 2015 (GLOBE NEWSWIRE) -- FXCM (NYSE:FXCM) an online provider of forex trading and related services worldwide, announced today due to unprecedented volatility in EUR/CHF pair after the Swiss National Bank announcement this morning, clients experienced significant losses, generated negative equity balances owed to FXCM of approximately $225 million.
As a result of these debit balances, the company may be in breach of some regulatory capital requirements.
We are actively discussing alternatives to return our capital to levels prior to today's events and discussing the matter with our regulators.
Earlier on Friday, Business Insider's Mike Bird outlined the problems facing currency brokers around the world in the wake of the surprising decision from the SNB.
As Bird outlined on Friday:
Brokers can go out of business on big moves like this because they give their clients access to leverage. For example, an account holder might have $1,000 with the broker, but hold positions worth $10,000 in currency markets. That doesn't matter so long as the holder's losses are covered by the initial amount.

The market is still digesting the SNB's actions and waiting for what happens next.
News from FXCM could one of the first shoes to drop.

[BIGDAY]

US Bonds are exploding.. Interest rates will remain low. Another bubble coming.

[mcdonae101]

Thats one thing I never understood with some of the currency brokers. 10X leverage is ridiculous

[jjgold]

selling short US Bonds might be the single greatest play in recent financial markets memory

[boomer62]

Currency's are where the Big Boys play. Not for the faint of heart.
As for the Swiss frank, it always was a place for a save haven but now are FUKED because of being tied to the Euro. All these Central Banks and are great FED manipulating interest rates is very dangerous.

[Sam Odom]

Illuminati headed by the Rothschilds are fukking us all

[RudyRuetigger]

JJ this is not fukkin players talk material

JJ half of your threads are copy/paste news

JJ if i want to view the fukkin news, ill go to a fukkin news page. Got it chief???

[jjgold]

I post very good stories only

This is very gambling related

Rudy watch and learn from me

[Sam Odom]

JJ

Why do you make these type posts but will NOT participate in the FHM Sexiest Woman one

http://www.sportsbookreview.com/forum/players-talk/3038455-wager-fhm-sexiest-woman-2015-odds.html

[jjgold]

Sammy this is GAMBLING SHIT

I am involved in FOREX

[boomer62]

JJ this is not fukkin players talk material

JJ half of your threads are copy/paste news

JJ if i want to view the fukkin news, ill go to a fukkin news page. Got it chief???

take it easy on the drinking and on JJ. It's refreshing to have stimulating intellectual conversation on here every now and then instead of the simple minded and childish posting that goes on.
Not to be a dick, but if you want players talk, here's something : not to smart betting Brooklyn in a 5 team parlay on the ML as a 10 point underdog against Washington. FYI, owner in the red big time and looking to sell the team. Looking to cut payroll and trade Lopez, this teams is going to tank like the Knicks. Buyer beware, my player talk. Best of luck with your wager though.

[jjgold]

Another massive firm in the United Kingdom call Alipari is in trouble


It just goes to show even great firms with lots of money can go bankrupt in any form of business and or gambling

[Ghenghis Kahn]

well aren't alipari and fxcm partners?

[jjgold]

No

Interactive Brokers of United States lost 2.5 their capital but luckily they're very well-funded so they're fine

Let's put this into perspective FX CM probably 10 times safer than pinnacle and 10 times more money

I think they're getting a bail out of 300 million because of massive customer base

Supposedly a few big traders sank FXCM with large positions on the Swiss Franc

[Ralphie Halves]

FXCM client here. And they're fine. Rescued by Leucadia.

http://www.forexlive.com/blog/2015/01/16/leucadia-to-give-fxcm-300m-in-financing-cnbc/

There were 70 traders long EUR/CHF for every 1 short. What did people think was going to happen?? Big institutions were going to pass on the chance to take all of that money? Shit.

I'm just glad FXCM is fine, because they're my #1 out, and that I can actually trade the Swiss Franc again.

[jjgold]

Good report Ralphie

I wonder if they can get money from clients that lot tons of money??

<org value="NYSE:FXCM" idsrc="xmltag.org">FXCM</org> (NYSE:FXCM) an online provider of forex trading and related services worldwide, announced today due to unprecedented volatility in EUR/CHF pair after the Swiss National Bank announcement this morning, clients experienced significant losses, generated negative equity balances owed to <org value="NYSE:FXCM" idsrc="xmltag.org" style="color: rgb(40, 53, 69); font-family: Verdana, Geneva, sans-serif; font-size: 12px; line-height: 21px;">FXCM</org> of approximately <money style="color: rgb(40, 53, 69); font-family: Verdana, Geneva, sans-serif; font-size: 12px; line-height: 21px;">$225 million</money>

[Russian Rocket]

just-released COT data shows large specs were most short CHF since 05/2013

[Russian Rocket]

The premium on strongly bearish bets/hedges on USDCHF is at its largest since at least 1999

[boomer62]

FXCM client here. And they're fine. Rescued by Leucadia.

http://www.forexlive.com/blog/2015/01/16/leucadia-to-give-fxcm-300m-in-financing-cnbc/

There were 70 traders long EUR/CHF for every 1 short. What did people think was going to happen?? Big institutions were going to pass on the chance to take all of that money? Shit.

I'm just glad FXCM is fine, because they're my #1 out, and that I can actually trade the Swiss Franc again.

Hey Ralphie, heard the same thing. I think I read from a post awhile back you had a trading business. You day trade or have a company? Had a buddy that had his own trading company and had guys working for him. Good to see the volatility come back in the market. You know currencies?

[Ralphie Halves]

Hey Ralphie, heard the same thing. I think I read from a post awhile back you had a trading business. You day trade or have a company? Had a buddy that had his own trading company and had guys working for him. Good to see the volatility come back in the market. You know currencies?

I do, I'm a prop trader by day, and I'm starting a financial services website due to open in March. Currencies are the only thing I trade. And yeah, volatility is back, almost at uncomfortable levels now, but it's better than what we were dealing with in the summer. That was brutal.

[Ralphie Halves]

Good report Ralphie

I wonder if they can get money from clients that lot tons of money??

<org value="NYSE:FXCM" idsrc="xmltag.org">FXCM</org> (NYSE:FXCM) an online provider of forex trading and related services worldwide, announced today due to unprecedented volatility in EUR/CHF pair after the Swiss National Bank announcement this morning, clients experienced significant losses, generated negative equity balances owed to <org value="NYSE:FXCM" idsrc="xmltag.org" style="color: rgb(40, 53, 69); font-family: Verdana, Geneva, sans-serif; font-size: 12px; line-height: 21px;">FXCM</org> of approximately <money style="color: rgb(40, 53, 69); font-family: Verdana, Geneva, sans-serif; font-size: 12px; line-height: 21px;">$225 million</money>

I don't think they can. I was looking at the agreement you sign when you join, and it only mentions losing all of the money in your account. It's up to your broker to give you a margin warning and then a margin call, so you only lose what you put in when something extraordinary happens like this and you were on the wrong side. When you hit zero, you hit zero. If your broker doesn't do their part, you can't expect them to come after you for money you never intended to invest.

If I'm reading it right, that's the big to-do here. Not the money in the losers' accounts, but since the trades were never closed, the money the clients lost beyond that.

[jjgold]

Many forex shops have auto close outs when your margin level drops below a certain amount

With FXCM it sure did and all positions would close meaning you cannot go into the red

So what happened here??

[boomer62]

I do, I'm a prop trader by day, and I'm starting a financial services website due to open in March. Currencies are the only thing I trade. And yeah, volatility is back, almost at uncomfortable levels now, but it's better than what we were dealing with in the summer. That was brutal.

Cool, mucho respect, have to know your shit to be in currencies! Best of luck with the business. I don't totally understand but do know trouble is a coming, just a matter when. Can't have all these countries printing money and devaluing their currencies. ECB about to do what we been doing but they are a little too late to the party. China is about to do theirs. We have our own debt problems not dealt with and we are still at zero interest rates. Going to be a big problem for the fed. Seems like trouble ahead or the future with all of us now in a global economy and a big debt crisis. Am I wrong?

[Ralphie Halves]

Many forex shops have auto close outs when your margin level drops below a certain amount

With FXCM it sure did and all positions would close meaning you cannot go into the red

So what happened here??

Again, I'm guessing, but it may have happened so fast, that they couldn't close it all out in time. A pure guess. I could dig deeper, but so could you.

Bottom line is it looks like they're going to be fine, and Leucadia is banking on the hope taht something this extraordinary will not happen again, or if it does, FXCM will be better prepared. Brilliant move IMO, got a big piece of one of the world's top brokers for cheap.

[Ralphie Halves]

Cool, mucho respect, have to know your shit to be in currencies! Best of luck with the business. I don't totally understand but do know trouble is a coming, just a matter when. Can't have all these countries printing money and devaluing their currencies. ECB about to do what we been doing but they are a little too late to the party. China is about to do theirs. We have our own debt problems not dealt with and we are still at zero interest rates. Going to be a big problem for the fed. Seems like trouble ahead or the future with all of us now in a global economy and a big debt crisis. Am I wrong?

Thanks for the kind words.

What China is doing is not sustainable, but they keep BS-ing their way through it, so good for them. I don't trade the Yuan, and as China becomes more self-sufficient and finishes over-building, they won't be as tied to the Aussie and the Yen, which I do trade, so I don't care too much about what ends up happening there.

Even if things collapse, the forex market will keep right on spinning. That's the great part about it. You trade one currency against the other. It will either up up or down, and going down doesn't mean things are crashing, it just simply means the quote currency (the second one listed) is stronger than the first one listed. That's it.

The problem that occurred with the EUR/CHF is that the Swiss National Bank pegged their currency to the Euro and made a floor, in essence saying that one CHF was not to be worth any more than 1.2 Euro. It stayed that way for three years, so once price got down to that area, tons of traders set their EUR/CHF trades long, thinking that they were safe and their trades were highly probable, so much so that most of them didn't even set a stop loss. Problem was, too many people did that, and the balcony gave way.

Either the large financial institutions were going to reward all of those people who thought they were slick and reward those traders with their money, or they could simply break the floor and make billions in one day. Which one would you do if you were them?

[byronbb]

Thats one thing I never understood with some of the currency brokers. 10X leverage is ridiculous

FX has 100x as standard.

[jjgold]

It proves how government should not intervene in financial markets

[Ralphie Halves]

FX has 100x as standard.

50X in the USA

And leverage can be good. It allows people who don't have enough money to make a real dent in stock trading to be profitable and prosperous in forex. Like anything, if you abuse it and be stupid about it, you'll get what you deserve at some point.

[kmarinouofm]

No

Interactive Brokers of United States lost 2.5 their capital but luckily they're very well-funded so they're fine

Let's put this into perspective FX CM probably 10 times safer than pinnacle and 10 times more money

I think they're getting a bail out of 300 million because of massive customer base

Supposedly a few big traders sank FXCM with large positions on the Swiss Franc

Who The FUkk Are You ?

Which Shift JJ knows how to read the Wall Street Journal .

Unreal Coach

[jjgold]

Kmaroux I fuk around with currencies and futures

put a late position in today short usd/jpy and late position short dow futures

Kid I contacts globally

FXCM should of auto closed many of those positions but like some say something went wrong or price changed too quick to react

[kmarinouofm]

Kmaroux I fuk around with currencies and futures

put a late position in today short usd/jpy and late position short dow futures

Kid I contacts globally

FXCM should of auto closed many of those positions but like some say something went wrong or price changed too quick to react

You contact globally ? What does that even mean?

I am guessing you have a satellite phone in Ocala? Or do you just get on chat roulette and wave your pecker at some poor souls and call it a meeting with your broker?

You firing away on your Sharebuilder.com account from the Trailer ?

Take it easy Gordon Gecko

[Optional]

Kmaroux I fuk around with currencies and futures

put a late position in today short usd/jpy and late position short dow futures

Kid I contacts globally

FXCM should of auto closed many of those positions but like some say something went wrong or price changed too quick to react

A gap in the market means they can't close out. And if they chose to close out immediately when they could, as it bottomed, it would be even more disastrous for them now. They had no choice but to hold and hope for the usual bounce after a gap.

[Russian Rocket]

coach forget the currency brokers...this move in Franc destroyed a well known hedge fund

http://mobile.bloomberg.com/news/2015-01-17/swiss-franc-trade-is-said-to-wipe-out-everest-s-main-fund.html

[Sam Odom]

RR, how many Rubles are you holding ?

[Russian Rocket]

RR, how many Rubles are you holding ?

none...why would anyone hold rubles right now?