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FXCM Discussion

  • #6,321
  • Edited 6:30pm Jan 21, 2015 6:19pm | Edited 6:30pm
Quoting Digitalis
Hi Jason. I trade DAX and FTSE Indices so thankfully/hopefully it seems these new margin requirements don't apply to me? However, reading the Updated Margin Requirements document sent out today with the warning email, they talk about leverage profiles A,B,C and D and imply that looking at Simplified Dealing Rates in TS2 will tell me what margin requirements are. All I see there is the current MMR of 6.00, no "profile" information. How do I know which leverage profile the accounts I trade fit into? Thanks.
Reference your MMR 6.00 against its associated FX pair in the referenced document and identify which column it falls under..

Margin profiles appear to be as follows:

eg. EURUSD - USD denominated accounts

A: 1/300 ($3.50)
B: 1/200 ($7.00)
C: 1/100 ($14.00)
D: 1/50 ($28.00)
TSLA: 30-Dec-22 123.18 // 16-Jun-23 260.54 **111.51%**
  • #6,322
  • Jan 21, 2015 6:31pm Jan 21, 2015 6:31pm
Quoting Naddmer
Seems like FXCM now enters the Rouque-Broker-Bucketshop-Mode while their LPs are drying them up. EURAUD FXCM above - EURAUD OANDA amidst - EURAUD RTFX below. {image} {image} {image} Pity - it was fun while it lasted.
yeah, i also checked eur/aud with other brokers and none have recorded that spike.
kind of weird.
  • #6,323
  • Jan 21, 2015 6:38pm Jan 21, 2015 6:38pm
Quoting hatzius
{quote} yeah, i also checked eur/aud with other brokers and none have recorded that spike. kind of weird.
Nope - not weird at all.

I can well imagine that they're now cut off from their LPs due to their dire situation and are running the shop as a MM now.

That's why I said:"It was fun while it lasted"
  • #6,324
  • Jan 21, 2015 6:45pm Jan 21, 2015 6:45pm
Quoting Naddmer
{quote} Nope - not weird at all. I can well imagine that they're now cut off from their LPs due to their dire situation and are running the shop as a MM now. That's why I said:"It was fun while it lasted"
jesus! if it's true!
  • #6,325
  • Jan 21, 2015 6:46pm Jan 21, 2015 6:46pm
Quoting Phylo
{quote} Reference your MMR 6.00 against its associated FX pair in the referenced document and identify which column it falls under.. Margin profiles appear to be as follows: eg. EURUSD - USD denominated accounts A: 1/300 ($3.50) B: 1/200 ($7.00) C: 1/100 ($14.00) D: 1/50 ($28.00)
Many thanks for trying to help me out Phylo. As I only trade (well, spreadbet) indices I'm thinking/hoping none of these margin changes affect me.
Of course if they don't now, it doesn't stop me wondering how big a snowball is gathering further up the mountain...
Full-time trader and loving it!
  • #6,326
  • Jan 21, 2015 6:47pm Jan 21, 2015 6:47pm
here's another article going into further details about the valuation of the company:

http://seekingalpha.com/article/2838...e-to-from-here

one excerpt:

An important factor to look at when trying to determine eventual sale value is what will happen with operations going forward. FXCM management owns 34% of the company and therefore has plenty of incentive to stay and to try to work this situation out as best as they can for their benefit and the benefit of all shareholders. But other employees who do not hold a significant stake will either leave for other more stable firms of their own volition or they will get poached by them. Recruiting new sales people to fill that void will be an exceptionally difficult challenge. A similar situation will unfold with clients. Margin rates are very likely to rise, which could reduce the competitive advantage of trading through FXCM. Legal and collections expenses are likely to be significant. Interest on the Leucadia loan will be a function of collections, but in any likely scenario, it will be significant. I therefore expect a marked reduction in assets under management and a quick deterioration of operating results going forward.

This brings me to my final point: collections. It is extremely difficult to know just how FXCM will do on collecting negative account balances from their customers. Dr. Duru in his Seeking Alpha article on the same subject concluded that FXCM does in fact have the right to collect those negative balances and that the client is on the hook for the debit. Clearly, FXCM has a significant incentive to collect as much of those receivables as soon as possible to reduce the loan owing to Leucadia.
  • #6,327
  • Jan 21, 2015 7:13pm Jan 21, 2015 7:13pm
Quoting hatzius
here's another article going into further details about the valuation of the company: http://seekingalpha.com/article/2838...e-to-from-here one excerpt: An important factor to look at when trying to determine eventual sale value is what will happen with operations going forward. FXCM management owns 34% of the company and therefore has plenty of incentive to stay and to try to work this situation out as best as they can for their benefit and the benefit of all shareholders. But other employees who do not hold a significant stake...
Honestly with all due respect... dr. duru is an idiot. NO, FXCM does NOT have the right to claim or collect any negativ balance. Why? Because they clearly claim on several different occasions, that they guarantee a no debit policy, you cannot owe FXCM any money. Thats a fact and thats the big difference between them and lets say alpari, alpari for example is clearly stating, that you can lose more than your initial deposit. They clearly state this on several occasions and in their Risk Warning, they are not letting any room for speculation, FXCM on the other hand, is clearly advertising themself as a broker which you cannot owe any money, and thats the key.

And now everybody is entitled to have a guess, why they are not officially claiming that all clients with a negative balance should pay this minus money back to them, because they know for a fact that they cant officially do this because they have a no debit policy. So what they are doing, is contacting clients, and asking them inofficially and probably trying to intimidate them and offer some kind of "deal" as a solution to pay this so called "debt" back.

So dont let them intimidate you, stand your man, you have nothing to owe to them. This is a clear case of misleading clients, if they advertise one way and write something completly different in their contracts, they will not be able to officially and legally ask for this money, because their RISK WARNING is a part of the contract you sign, and in their Risk Warning its clearly stated that they have a no debit policy for clients, without any exceptions.
  • #6,328
  • Jan 21, 2015 7:26pm Jan 21, 2015 7:26pm
i have used fxcm for 2 years+ , and they were not bad, but the mmr changes this time really disappoint me...i seriously want to change to a new broker..
  • #6,329
  • Jan 21, 2015 7:33pm Jan 21, 2015 7:33pm
Quoting Face'
{quote} Honestly with all due respect... dr. duru is an idiot. NO, FXCM does NOT have the right to claim or collect any negativ balance. Why? Because they clearly claim on several different occasions, that they guarantee a no debit policy, you cannot owe FXCM any money. Thats a fact and thats the big difference between them and lets say alpari, alpari for example is clearly stating, that you can lose more than your initial deposit. They clearly state this on several occasions and in their Risk Warning, they are not letting any room for speculation,...
hope you're right (for whoever lost more than they had)!
personally, having seen arguments on both sides, i must declare myself ignorant to all the legal intricacies related to fxcm collecting money from customers.

on the other side, i warn everyone still using fxcm to reduce their accounts before the 19th of february when cftc & nfa will have the board meeting and decide to punish us with new regulations. it's like having inside information in respect to fxcm's revenues. less leverage, less income, less value to their earnings, more struggles to pay back leucadia. i'd rather trade the stock than trade with them anymore (with no segregated accounts for US).
  • #6,330
  • Jan 21, 2015 8:06pm Jan 21, 2015 8:06pm
Also looks like they've decided to start demanding margin in each direction too. As in... if you had an open long and hedged it with a short, they sting you for the short now as well. Wasn't like that for Aussie customers an hour or two ago and certainly wasn't mentioned in the email they sent out, so watch out.

That quadrupling of margin that they brought on us today is therefore an 8-fold increase for bi-directional position traders. The 8-fold increase on the weekend is actually a 16-fold increase. If you are using just 7% of your margin, you will get margin called

Nice one FXCM.
  • #6,331
  • Jan 21, 2015 8:17pm Jan 21, 2015 8:17pm
Quoting TheMadMonk
Also looks like they've decided to start demanding margin in each direction too. As in... if you had an open long and hedged it with a short, they sting you for the short now as well. Wasn't like that for Aussie customers an hour or two ago and certainly wasn't mentioned in the email they sent out, so watch out. That quadrupling of margin that they brought on us today is therefore an 8-fold increase for bi-directional position traders. The 8-fold increase on the weekend is actually a 16-fold increase. If you are using just 7% of your margin, you...
.....yet the muppets will still be queuing up for a piece of the action.
"Risk comes from not knowing what you're doing." - Warren Buffett
  • #6,332
  • Jan 21, 2015 8:19pm Jan 21, 2015 8:19pm
Quoting TheMadMonk
open long and hedged it with a short

The madness will never stop
  • #6,333
  • Jan 21, 2015 8:30pm Jan 21, 2015 8:30pm
Ngh.. I take it back. The extra margin is showing in the open positions tab but isn't showing in the accounts tab.

*backs away from the high horse*

Nothing to see here.....
  • #6,334
  • Jan 21, 2015 9:01pm Jan 21, 2015 9:01pm
I have been a FXCM customer since 2004 however after 10 years I shall now be looking elsewhere.

Going from 200:1 to 50:1 within the space of 24 hours is really poor form and shows there are serious instabilities with this broker.
There are plenty of alternative brokers out there so shopping around will be rather easy.

Here is a complete list of trading pairs

A) Previous margin
B) Interim margin for a short period (2 days)
C) Long term margin to be set from the 24th of January.
Attached Image (click to enlarge)
Click to Enlarge Name: FXCMmargin.JPG Size: 170 KB
  • #6,335
  • Jan 21, 2015 9:06pm Jan 21, 2015 9:06pm
Let's be clear, its about absorbing more cash at this dire situation. Forcing customers to deposit by increasing margin is the fastest and most legitimate way.
  • #6,336
  • Jan 21, 2015 9:32pm Jan 21, 2015 9:32pm
Figured I'd inject a little levity ... . The caption says it all:

Attached Image
Fireworks are fun ... as long as you don't blow your fingers off.
  • #6,337
  • Jan 21, 2015 9:37pm Jan 21, 2015 9:37pm
Quoting mindscream
Let's be clear, its about absorbing more cash at this dire situation. Forcing customers to deposit by increasing margin is the fastest and most legitimate way.
As a customer how would you feel if they did that to you?

I know i am not happy and it has made me lose confidence in their business.
  • #6,338
  • Jan 21, 2015 10:49pm Jan 21, 2015 10:49pm
Anyone hear anything from FXCM re: negative balances yet? I'm either adding to my account and resume trading if the negative balances are wiped out as they promised or I will walk away and open a new account elsewhere. I will not give them a single penny based on principle. So much documentation, and the reason I chose to go with FXCM in the first place was their stated limitation of losses limited to the amount deposited. It will be interesting to hear where this goes.
  • #6,339
  • Jan 21, 2015 11:11pm Jan 21, 2015 11:11pm
They havent waived neg balances yet since theyre still trying to request politely to those affected to top up.

They cant announce anything public because the no-debit-balance policy and client-never-owe-money policy are all over their PDS, risk disclosure, promotional videos etc.

Legally, they cant force clients to pay..if they go to court, theyd lose and they get bad publicity.

Ive been lookin for a new broker. No more fxcm or anything with their ceo (niv) related institition for me.
  • #6,340
  • Jan 21, 2015 11:16pm Jan 21, 2015 11:16pm
Quoting Dafonz
{quote} As a customer how would you feel if they did that to you? I know i am not happy and it has made me lose confidence in their business.
I reallly think FXCM is dead.

1. They've taken on a loan they can't possible pay off

2. They refuse to answer the question about wiping out negative balances, when it's a "yes or no" question and most other brokers have answered it

3. Jason is MIA... this thread is 317 pages, pull up any page before last week, and Jason's posts usually take up 1/2 of the page, now he's MIA

4. They are publicly traded, and yet seem to be getting away with not informing shareholders of what they are doing to correct their poor risk management

5. They are raising margin requirements through the roof
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