EUR/CHF wipeout/margin call ... negative balance ... what to do?

Pentaquark said:
Hi all,

I would like to start this thread as a platform for people who got wiped out in last weeks EUR/CHF move and are unsure on what to do now.

Ok, day 3 after the FX tsunami...I'm one of the suckers who got hit hard by the EUR/CHF floor removal...very hard! When coming back from a meeting I faced myself with a negative balance exceeding 5 times my account size. Took everything together to wait for the rebound...wanted to close the position...not possible due to negative account balance! Called IB, they walked me through on how to close it anyway. Left with a minus on my account exceeding two times the cash I had in it. I'm with Interactive Brokers.

Question:
- Who needs to stand up for the loss?
- Is it the duty of IB to close the position if margin is exceeded to protect their own business interest?
- What if I can't (or don't want to) equalize the account balance?
- What's the normal procedure?
- Can maybe someone who got wiped out in the past elaborate the possible options?

Please make this a constructive discussion. No lectures on what should have been done.

Kind regards and strength to everyone facing the same,
F
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So what have you decided to do?
 
Option_Attack said:
Sorry for your loss, but I'm sure you read IB's Forex Risk Disclosure:


"RISK DISCLOSURE STATEMENT

OFF-EXCHANGE FOREIGN CURRENCY ("FOREX") TRANSACTIONS INVOLVE THE LEVERAGED
TRADING OF CONTRACTS DENOMINATED IN FOREIGN CURRENCY CONDUCTED WITH A FUTURES
COMMISSION MERCHANT OR A RETAIL FOREIGN EXCHANGE DEALER AS YOUR COUNTERPARTY.
BECAUSE OF THE LEVERAGE AND THE OTHER RISKS DISCLOSED HERE, YOU CAN RAPIDLY LOSE
ALL OF THE FUNDS YOU DEPOSIT FOR SUCH TRADING AND YOU MAY LOSE MORE THAN YOUR DEPOSIT."


Not picking on you at all here, just bringing up what will probably be IB's position. And if you say their system failed to get you out, they will surely say you agreed that there is also risk in electronic trading. Systems fail and at the worst times.

But really, have you lost that much? Don't know what your tax situation is, but in general all losses can be carried forward (deducting $3k/year) and netted against future capital gains. Just make sure you have future cap gains! I pay heavy California and Federal taxes, so this helps at least for me.

Good trading to all.
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don't give out tax advice especially without a link.
 
Nobody but those inside the SNB knew the actual day the "peg" would be taken off but many others knew it was only a matter of time.

Sorry for anyone trading a CHF pair but the market always wins in the end - even against a central bank.
 
SunTrader said:
Nobody but those inside the SNB knew the actual day the "peg" would be taken off
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How do you know ? There were plenty of prepositionings in the market on the prior days. In fact I changed direction because of that. I'd say all the banks knew what was going to happen.
 
ExperiencedJoe said:
How do you know ? There were plenty of prepositionings in the market on the prior days. In fact I changed direction because of that. I'd say all the banks knew what was going to happen.
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Did you read each word of the quote you quoted:

Nobody but those inside the SNB knew the actual day the "peg" would be taken off
 
ExperiencedJoe said:
If someone whacks you on the head and then grab your money, would you say you need to learn a lesson, or would you say the robber needs to be locked up ? Just because the robber says to you he will only take what's in your wallet but won't take what you have at your home, because he certainly has that option, does that make it less of a robbery ?
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Robbery? "He who sells what isn't his'n must buy it back or go to pris'n."
 
SunTrader said:
Did you read each word of the quote you quoted:

Nobody but those inside the SNB knew the actual day the "peg" would be taken off
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How do you know ? Someone in SNB told you that ?

As I have said, there were position takings in the market on the prior days. So plenty of people outside of SNB knew about it. I too knew something's up. Although I didn't care what was up. I saw those people going in with their cash, and I followed. I had to take a loss for it and got exceedingly annoyed, because at the time I saw those people going in, I was facing the wrong direction. On hindsight, the annoyance was worth it.
 
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ExperiencedJoe said:
How do you know ? Someone in SNB told you that ?

As I have said, there were position takings in the market on the prior days. So plenty of people outside of SNB knew about it. I too knew something's up. Although I didn't care what was up. I saw those people going in with their cash, and I followed.
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Ok oh wise one. Then how did you know there were some taking positions.

I prefer to make decisions on my own. Not what other so-called "in the know" are doing. The definition of who knows what changes like the weather - on a daily basis. Everest Capital was probably included in the "in the know" crowd till - the fit hit the sham.
 
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