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FXCM Discussion

  • #7,881
  • Jul 23, 2015 1:09pm Jul 23, 2015 1:09pm
Hi Jason, any comments will be appreciated.
Fresh questions about the massive broker
Shares of FXCM were devastated by the Swiss National Bank debacle and the lack of risk controls at the company. Shares fell 88% after a bailout and a few days of panic selling but found support around $1.30-$2.30 since.
At least until the past two days. The company announced a 1-for-10 reverse stocks split with shares at $1.29. Officials said it was to avoid falling below the NYSE de-listing threshold of $1.00.
The market took that as a sign that company executives weren't confident in the share price and began selling. Shares fell 11% yesterday and followed that with another 11% fall today to break the post-collapse low to $1.02.
http://az705044.vo.msecnd.net/20150723/fxcm.png
  • #7,882
  • Jul 23, 2015 1:19pm Jul 23, 2015 1:19pm
Quoting M967
Hi Jason, any comments will be appreciated. Fresh questions about the massive broker Shares of FXCM were devastated by the Swiss National Bank debacle and the lack of risk controls at the company. Shares fell 88% after a bailout and a few days of panic selling but found support around $1.30-$2.30 since. At least until the past two days. The company announced a 1-for-10 reverse stocks split with shares at $1.29. Officials said it was to avoid falling below the NYSE de-listing threshold of $1.00. The market took that as a sign that company executives...
Hi M967,

While I'm not authorized to comment on our stock, all publicly available information can be found on our Investor Relations website.

As our CEO Drew Niv stated: "The execution of this reverse split represents an important step in achieving several significant corporate objectives, including FXCM's continued listing on the New York Stock Exchange. Remaining a NYSE-listed company is an important objective for FXCM. The NYSE requires certain standards be met to continue as a listed company on its exchange, and while we currently satisfy all of those obligations and do not anticipate that changing, a reverse stock split will only serve to help strengthen our status and protect the company and its shareholders."

Being a publicly listed broker on the NYSE provides financial transparency for our traders that is not available with many of our competitors. As of our most recent quarterly earnings release, FXCM had $328 million in operating cash and $1.0 billion in customer equity. Furthermore, our regulatory capital surplus of over $200 million is as strong as it has been in recent years.
  • #7,883
  • Jul 23, 2015 1:29pm Jul 23, 2015 1:29pm
Thank you Jason,
That' s a big question of confidence, if FXCM will be kicked out from NYSE.
  • #7,884
  • Edited 2:39pm Jul 23, 2015 1:42pm | Edited 2:39pm
@JASON:

Every Listed company at the NYSE has to provide for the government and general public (Via FoI act) the up-to-date quarterly financial situation.

Could you please provide us that PDF and the link on the US Gov site where your company is listed?

This is from EDGAR from 2014 before the CHF ka-boom.
http://www.sec.gov/Archives/edgar/da...140930x10q.htm

From Google Finance:

FXCM:
Key stats and ratios

Q1 (Mar '15) 2014
Net profit margin -292.48% 4.24%
Operating margin -58.78% 8.44%
EBITD margin - 20.30%
Return on average assets -122.39% 0.85%
Return on average equity -1774.37% 6.33%
Employees 850 -

It lost 93% of the stock value in 6 months. That can only mean one thing. This stock is probably gonna go to zero. Apply simple logic from there.

Good luck with these numbers.
Best regards, Zef
  • #7,885
  • Jul 23, 2015 1:54pm Jul 23, 2015 1:54pm
Quoting ZeF
@JASON: Every Listed company at the NYSE has to provide for the government and general public (Via FoI act) the up-to-date quarterly financial situation. Could you please provide us that PDF and the link on the US Gov site where your company is listed? From Google Finance: FXCM: Key stats and ratios Q1 (Mar '15) 2014 Net profit margin -292.48% 4.24% Operating margin -58.78% 8.44% EBITD margin - 20.30% Return on average assets -122.39% 0.85% Return on average equity -1774.37% 6.33% Employees 850 - It lost 93% of the stock value in 6 months. That...
Wow, that's really tough!
  • #7,886
  • Jul 23, 2015 4:17pm Jul 23, 2015 4:17pm
Quoting bobbyspider
Hey Jason, just curious if you know when the next update will come as to how the loan repayment to Leucadia is going? thank you! also as far as the class action lawsuit, is there any way you could estimate the minimum or maximum financial damage that could cause?
Hi Bobby,

Our goal in the near-term is to pay down a majority of the loan. That said, we make all updates on loan repayments through SEC filings and press releases which can be found on our Investor Relations website.

There has been no such update since the last earnings call‎, when our CEO Drew Niv said the following: "FXCM is pleased with how our debt reduction plan is proceeding. We are ahead of plan and the results of the FXCM Japan sale exceeded our expectations. With all the increased attention to our other properties, we are expecting robust and competitive auctions for the other non-core assets we have targeted to sell."

You can listen to the May 11 earnings call for more details on our plan: http://edge.media-server.com/m/p/f6ky95fb

In regards to your other question, unless an official statement has been made, I'm unable to comment on any legal matters.
  • #7,887
  • Jul 23, 2015 4:23pm Jul 23, 2015 4:23pm
Quoting ZeF
@JASON: Every Listed company at the NYSE has to provide for the government and general public (Via FoI act) the up-to-date quarterly financial situation.
Hi Zef,

It seems like you may already be familiar with finding information on public companies since you linked to the Edgar database. It's a publicly available website for all exchange listed companies. However, your post does highlights the benefits of FXCM being public while many of our competitors are not, since it means details regarding our financials are readily available. Here are the key stats from of our latest quarterly reports:

  1. Adjusted Q1/15 revenues of $98.8 million and EBITDA of $14.5 million
  2. $329 million in operating cash
  3. $1.0 billion in customer equity
  4. 196,964 active retail FX accounts
  5. Regulatory capital surplus of $200.6 million

Our most recently monthly metrics were released last week, and our clients transacted $363 billion in volume for June. You can sign up for email alerts on our Investor Relations website to get updated on our next earnings release.

  • #7,888
  • Jul 23, 2015 4:24pm Jul 23, 2015 4:24pm
Quoting M967
Thank you Jason, That' s a big question of confidence, if FXCM will be kicked out from NYSE.
As our CEO said, we currently satisfy all the obligations to continue as a listed company on the NYSE and we don’t anticipate that changing. A reserve stock split will only help to strengthen our status. And while I can’t comment on our stock price, you’re welcome to contact our Investor Relations department with any related questions.

We know that FXCM clients value the financial transparency our public listing brings. That’s why it’s important to note that despite the events of January 15th, our capitalization remains at levels similar to before the SNB event: http://bit.ly/10Pq5FJ
  • #7,889
  • Edited Jul 24, 2015 6:28pm Jul 23, 2015 6:45pm | Edited Jul 24, 2015 6:28pm
Dear Jason,

Correction:
1. SL = 193.652
2. EP = 193.852
3. TP = 194.052
4. CLOSED PRICE = 193.352
5. TRADE AMT. = 0.18
6. CLOSED AMT. = -69.81

Question: Why the trade was closed at 193.352 instead of SL 193.652?

BRGRDS,
ST 888
  • #7,890
  • Jul 23, 2015 11:27pm Jul 23, 2015 11:27pm
I am not sure why I am getting requotes in mt4
newzTrader
  • #7,891
  • Edited 2:49am Jul 24, 2015 2:38am | Edited 2:49am
Dear Jason, you suggested several times to NOT use MT4 on FXCM. I start to understand now WHY !
I asked in an online chat what the big spread (difference between bid and ask line on my chart) meant. They answered : "Don't worry it is a bug in the platform and we are working on it". Also they pointed my attention that the Market Watch panel is showing the correct quote ... and NOT THE CHART !!!!!!
So once more: HAPPY BACK TESTING ON FXCM MT4!!!
Attached Image (click to enlarge)
Click to Enlarge Name: the fxcm mt4 mess2.jpg Size: 53 KB

If the spread is less. The yellow lines show the real Bid Ask lines. Than the price never went as low (on this bid chart) as the underside of the shadow of the candle would suggest. The consequences are BIG !!!
The question of seatrader888 is also related to this: The chart shows a price that has never existed !
  • #7,892
  • Jul 24, 2015 12:36pm Jul 24, 2015 12:36pm
Quoting seatrader888
This trade should have been closed at the price of 193.852 which was my SL set point, NOT at 193.372. Please tell me why it was closed at 193.372 instead of 193.852? I should have been charged for about $30+ dollars only for that trade, but not $69.81. Please find attached files for further reference. Brgrds
Hello Seatrader888, (For your security, it's best to edit your post to remove your full name and account number.)

While only the Trade Services Team can conduct a formal audit of your trade, I used the information you provided to pull up a chart of the time in question. Note that like your MT4 server, the chart below uses the time zone GMT+3 in order to have New York Close charts. That means 11:30 on MT4 corresponds to 8:30 GMT.

Attached Image (click to enlarge)
Click to Enlarge Name: gbp jpy gap 2015 July 24.png Size: 35 KB


As you can see, the price of GBP/JPY moved down sharply at the time your stop loss (SL) was triggered. It's important to note that when a stop order is triggered it becomes a market order. That means it will get filled at the best available price in the market which may not be the original price you requested. This is not a bad thing. Imagine the alternative. If a stop loss order could only be filled at the price you requested and that price was not available in the market, then your trade would remain open even if the market continued to move against you further and further resulting in even greater losses.

When an order gets filled at a different price than you requested, that is called slippage. It's worth noting that unlike with some other brokers, slippage with FXCM can be either positive or negative. Positive slippage is when your order gets filled at a better price than you requested. A study of over 43 million orders executed through FXCM during a twelve-month period revealed the following:

  1. 76.2% of all orders had NO SLIPPAGE.
  2. 13.5% of all orders received positive slippage.
  3. 10.2% of all orders received negative slippage.
  4. Over 58% of all limit and limit entry orders received positive slippage.
  5. 52% of all stop and stop entry orders received negative slippage.
  6. Over the course of that year, FXCM clients benefited from over $21 million in positive slippage.

Note that with FXCM, positive slippage is more common than negative slippage. It's only that positive slippage is more common with limit orders, while negative slippage is more common with stop orders. That's due the momentum of price movement when such order types are triggered.

Furthermore, slippage can increase during news events, and the DailyFX Economic Calendar shows that UK Retail Sales data were released at the time your stop was triggered causing the market to move sharply.

Attached Image (click to enlarge)
Click to Enlarge Name: dailyfx calendar 2015 July 24.png Size: 119 KB


However, as I mentioned earlier, only the Trade Services Team can conduct a formal audit of your trade. If you still have questions, please use this online form to file a trade inquiry. The Trade Services Team can then perform a thorough investigation of what happened, and if there was any error in our trade execution, FXCM will make the appropriate correction to your account.
  • #7,893
  • Jul 24, 2015 12:48pm Jul 24, 2015 12:48pm
Quoting newzTrader
I am not sure why I am getting requotes in mt4
Hi newzTrader,

There are no re-quotes with FXCM. Please tell me more about what's happening on your platform. What's the exact error message you received, and what time did this happen? Also, what value did you set for your Maximum Deviation?

Thanks,
Jason
  • #7,894
  • Jul 24, 2015 1:01pm Jul 24, 2015 1:01pm
Quoting CatMan
Dear Jason, you suggested several times to NOT use MT4 on FXCM. I start to understand now WHY !
Hi CatMan,

The reason I suggested for to you try another platform is because your earlier comments revealed that you are struggling with MT4.

Quoting CatMan
Downloading data from FXCM (or any other MT4 broker) is a real work of patience.
Therefore, I thought you might be interested in knowing that FXCM offers you multiple platforms from which to choose.

Quoting CatMan
The question of seatrader888 is also related to this
Seatrader888's question is unrelated. You can see my response to him in this post: http://www.forexfactory.com/showthre...99#post8399799
  • #7,895
  • Jul 24, 2015 11:56pm Jul 24, 2015 11:56pm
Quoting Jason Rogers
{quote} Based on CFTC Regulation 5.16 no Retail Foreign Exchange Dealer, Futures Commission Merchant or Introducing Broker may in any way represent that it will guarantee against losses: http://www.ecfr.gov/cgi-bin/text-idx...5_116&rgn=div8 This rule applies to all US-regulated forex brokers. So if you're trading forex in the US, the capitalization of your broker becomes all the more important. Below are the latest capital figures for US-regulated forex brokers (RFEDs) as reported...

Hi Jason,

Thanks for your reply. My question was actually why did FXCM offer negative balance protection for so many years but stop it now? Looking at the link and regulation you provided, the regulation was in effect since 2010 but FXCM is only stopping the negative balance protection now? It seems more like a company decision to stop offering it to US traders only?
  • #7,896
  • Jul 25, 2015 2:53am Jul 25, 2015 2:53am
I noticed that FXCM made announcements on FXCM Investor Relations website about the update to its negative balance policy for FXCM AU and FXCM UK. But none for FXCM US? Any reason for that?
  • #7,897
  • Jul 25, 2015 4:25am Jul 25, 2015 4:25am
Quoting Jason Rogers
{quote} Hi CatMan, The reason I suggested for to you try another platform is because your earlier comments revealed that you are struggling with MT4. {quote} Therefore, I thought you might be interested in knowing that FXCM offers you multiple platforms from which to choose. {quote} Seatrader888's question is unrelated. You can see my response to him in this post: http://www.forexfactory.com/showthre...99#post8399799
Thanks for your answer Jason, but you don't answer the core of my question:
Due to the spread being much smaller actual than on the chart is shown ... The bars show a price LOW that is incorrect. Is that acceptable ? This has also a negative impact on BT results. Using an other dealstation than MT4 is not an option for me. FXCM should make MT4 work properly, like most other brokers manage to do. And like they promised to do. Correct me if I am wrong.
  • #7,898
  • Edited 8:15am Jul 25, 2015 7:56am | Edited 8:15am
Quoting tasco
{quote} Hi Jason, Thanks for your reply. My question was actually why did FXCM offer negative balance protection for so many years but stop it now? Looking at the link and regulation you provided, the regulation was in effect since 2010 but FXCM is only stopping the negative balance protection now? It seems more like a company decision to stop offering it to US traders only?
Any negative balance is basically you defaulting on that loan which the broker gave to you (i.e. leverage). You are bankrupt the moment you do that. Since that loan is not collateralized, they have no call over it so they can only bully you with an action in a court of law, etc. Imagine how many clients default on them daily ... it's in the hundreds probably. I highly doubt that they will actually sue you for it, and these trials often last many many years, by that time FXCM will certainly cease to exist. Their stock is headed to zero and we all know what that means for a company. Even if you're found liable for returning their fake negative balance, tell me how they gonna execute you if the loan was not guaranteed by anything? This is ridiculous in itself.

If you're worried about this anyways, I would suggest trading options as your loss is limited there.
Best regards, Zef
  • #7,899
  • Jul 27, 2015 8:19am Jul 27, 2015 8:19am
Quoting ZeF
{quote} Any negative balance is basically you defaulting on that loan which the broker gave to you (i.e. leverage). You are bankrupt the moment you do that. Since that loan is not collateralized, they have no call over it so they can only bully you with an action in a court of law, etc. Imagine how many clients default on them daily ... it's in the hundreds probably. I highly doubt that they will actually sue you for it, and these trials often last many many years, by that time FXCM will certainly cease to exist. Their stock is headed to zero and...
Good point Zef. Take note that EVERY US business has at least one lobby group in Washington DC who pushes for more favorable conditions and punishes when they do not get it form politicians. Every industry except Forex lobbies on their own behalf. Comparing the CME lobby powers with forex lobby powers is like comparing Emperor Hugeouos Dickkus Maximus to a Little Forex Broker Mouse Dickkie Wickkie Mini-me. US brokers are paranoid when it comes to standing up to the NFA and for lobbying for better forex conditions for themselves and their customers. Point blank is they will run scared from the CFTC and NFA. US brokers would rather jump out of their skin than confront their big bully NFA. If they were not paranoid, then they would create a powerful Washington DC lobby, just like all the other business weenies out there. Mentally speaking, US brokers are running late for the train. This is all US brokers, not just FXCM.
  • #7,900
  • Jul 27, 2015 9:07am Jul 27, 2015 9:07am
Quoting PipShot
{quote} Good point Zef. Take note that EVERY US business has at least one lobby group in Washington DC who pushes for more favorable conditions and punishes when they do not get it form politicians. Every industry except Forex lobbies on their own behalf. Comparing the CME lobby powers with forex lobby powers is like comparing Emperor Hugeouos Dickkus Maximus to a Little Forex Broker Mouse Dickkie Wickkie Mini-me. US brokers are paranoid when it comes to standing up to the NFA and for lobbying for better forex conditions for themselves and their...

The retail brokers have no common ground and will rather dig each other's shallow grave fighting for scraps than get their act together and become a strong interest group with legitimate lobbying activities. This is one of the reasons why they go to places like Cyprus to look for "regulation" from dickless CySec Liliputians.

A bunch of scammers (absolutely all of them) who will cry wolf when some retail smug hands them the same coin back. These FXCM dudes have the balls to show up and say their company is doing better than ever when their stock is at freaking ZERO and operating margin is -58.78%. Profit margin is -292.48%.

Attached Image (click to enlarge)
Click to Enlarge Name: e8f0d2f421fc7b003d89f2cb3b9f5759.1000x503x1.jpg Size: 94 KB
Best regards, Zef
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