Could This Be The End For FXCM
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Thread: Could This Be The End For FXCM

  1. #1
    Http://nypost.com/2015/01/20/punitiv...fxcm-on-ropes/

    One currency broker is paying a high price for money.

    FXCM, which saw itself on the wrong end of the Swiss franc trade a week when the currency made unprecedented gains against the euro, consented to a two-year deal with Leucadia National that hikes up the interest rate every quarter and limits how it can pay the loan, a regulatory filing Tuesday revealed.

    The ”punitive” deal, which uses the company's assets as collateral, can force the company into bankruptcy, said Rich Repetto, an analyst at Sandler O'Neill. ”[Leucadia is] looking to be sure they protect themselves and make a good return.”

    If FXCM doesn't pay back the loan early, the 10 percent interest rate rises by 1.5 percentage points every three months to a 17 percent cap, according to the filing. The broker can only pay back the loan from trading profits.

    The broker will probably try to sell itself by April, according to an analyst report put out by Citigroup.

    Leucadia is the parent company of Jefferies, the bank that purchased Knight Capital after the broker went awry at 2012.

    FXCM shares plummeted almost 88 percent on Tuesday to $1.60, its first trading day since the franc soared.

  2. #2
    Quote Originally Posted by ;
    http://nypost.com/2015/01/20/punitiv...fxcm-on-ropes/ One currency broker is paying a high price for money. FXCM, which saw itself on the incorrect end of the Swiss franc trade a week when the currency made unprecedented gains against the euro, consented to some two-year agreement with Leucadia National that climbs up the interest rate each quarter and limits how it can pay the loan, a regulatory filing Tuesday revealed. The ”punitive” deal, which uses the organization's assets as security, could induce the firm...
    appears . .and traders planning to depart fast Particularly with the manner alpari is dealing with things..nobody May Want to get money locked up

  3. #3
    Quote Originally Posted by ;
    quote looks so . .and traders planning to leave fast especially with the manner alpari is dealing with things..nobody May Want to get cash wrapped up
    SAD

  4. #4
    I believe that is miserable!

    Few options left for well-known brokers that are regulated in the united kingdom and STP/ECN. I am not too keen to open an account with brokers loed in Cyprus or some other Isle but really the options are slim now with Alpari gone and FXCM looking like they can sold (client accouts at least).

  5. #5
    One question I always asked is why are some brokers highly affected by the effect of CHF while others aren't affected? Can you clarify the gap please.

  6. #6
    Quote Originally Posted by ;
    One question I asked is why are some brokers highly influenced by the effect of CHF while other aren't affected? Please can you clarify the difference.
    They were running a B-book and cashed on on customer's losses.

    Or

    They were running a proper a-book or A/B hybrid vehicle and balanced / hedged their risk correctly. They cashed in or limited their losses relative to their entire cashflow and reserves.

    Or

    They had been running a-book and so were over-leveraged to their own liquidity providers. This then produces a state where today the losses which the client cannot pay should come from their pockets. Plus any penalties incurred with inadequate margin. That is the reason Excel Markets went bankrupt, despite the fact that they had A-book/STP. They were supplying 1:400 leverage across all of currency pairs (including CHF pairs) with no top balance limitation.

    It's also possible to run a b-book and be about the 'wrong side', but that could have been improbable.

  7. #7
    WTF happened ? I withdrew all of my money from oanda 7days before the CHF incident, and Alpari,fxcm are gonna bankrupt? Any other broker gonna down can someoone inform me what the hell happen now? I'm grateful that I don't trade anymore but kinna sad that the Forex retail gont collapse

  8. #8
    Quote Originally Posted by ;
    WTF happened ? I withdrew all of my money from oanda 7days prior to the CHF incident, and Alpari,fxcm are gonna bankrupt? Any other broker gonna down can someoone tell me what the hell happen now? I'm glad that I don't trade anymore but kinna sad that the Forex retail gont collapse
    it's important to stress that FXCM isn't insolvent, hasn't registered for any sort of bankruptcy, and is also in compliance with all regulatory capital requirements in the jurisdictions in which we operate. That means our clients continue to trade, deposit, and draw which traders are mentioning in our main discussion thread: https://www.forexforum.co.za/general...ents-euro.html

  9. #9
    Quote Originally Posted by ;
    One question I asked is why are some brokers highly influenced by the impact of CHF while others aren't affected? Please can you explain the gap.
    There is no fantastic man in this circumstance.

    Bucket shops like Forex.com cleaned house. They were kind enough to simply settle for their client's entire account rather than going through the trouble of pursuing them to get negative balances. Because they use their own money to trade contrary to their customers they're not accountable to outside sources such as FXCM was. They could easily simply forgive the negatives. You see Oanda setting up advertisements bragging about how they forgive negative balances when you know that it's just luck and could have gone another way on them.

    The actual question is why did FXCM have this type of risky business model? Why did not they make a bargain with their liquidity supplier (Pretty sure it had been Citadel) they could only have a max of their client's full account? Was that possible? Didn't they see all of the morons loading up levered into the hilt on which they thought was a risk free eurchf long? If they're trying to play broker why did not they hedge their customers positions if they were exposed to such huge losses? Black swan events happen and the excuse that it is an action of God is foolish. I doubt they recover much from going after customers to get negative balances. Occasionally it's nobody's fault but your own.

  10. #10
    Men anyone having problems with withdrawing funds from FXCM account?

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