Pentaquark & Snbmess - I am in the same boat as you are, but for a much larger multiple of my initial deposit (and probably a larger absolute sum as well). Please contact me directly for more info - I have been consulting with several lawyers on this issue.
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EUR/CHF wipeout/margin call ... negative balance ... what to do?
- Thread starter Pentaquark
- Start date
Good luck with that mate. On the surface it sounds like you might have a valid argument. This is what the thread is about, people helping each other thru sharing information.Hi,
I am in the same situation as you. Negative balance exceeds 3x my initial money.
I tried to do 50/50 agreement but the they told me they are looking for a full amount and that I should deposit significant upfront payment this week.
I had the same position with other broker who covered my negative balance. So next time I open an account I will go for DUKASCOPY or OANDA.
I also found out that my order to sell half of the position at 1.2011 was not filled, but when I exported the historical quotes from IB, there was a high of 1.201135 that week so order should have been filled. That would significantly impact my position.
I will write a complaint to IB and I am going to find a lawyer who can help me.
I think all of us with negative balance should file a joint compaint.
Good luck
Cheers John
"Only when the tide goes out do you discover who's been swimming naked."
I think this was more like a Tsunami. The water recedes more than usual, fish are flopping around, and then huge waves come in destroying everyone and everything in their path.
I think this was more like a Tsunami.
As The Economist puts it, "IN THE world of central banking, slow and predictable decisions are the aim."
Three days before "the Tsunami" on Jan 12, "We took stock of the situation less than a month ago, we looked again at all the parameters and we are convinced that the minimum exchange rate must remain the cornerstone of our monetary policy," Jean-Pierre Danthine, SNB
If a company behaved like this there'd be lawsuits from all directions.
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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.
Here in Canada with Oanda it is worded in such away that they are promising the integrity of their own system to close you out before your account goes negative. I would wonder if Canadian investors could argue that Oanda is forced to cover a negative balance and isn't really being honourable at all by offering to cover chf related negative balances.
Check carefully the risk disclosure for your country and for your broker.
http://fxtrade.oanda.ca/legal/risk-warning
I actually was always of the impression that they would cover a negative balance.
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You get it didn't happen in 1 day, or 1 hour, or 1 min, it happened in 0.01seconds, your SL hit, went market order and your down 30,000pts or what ever it was, nothing you could do about it, SL can't help.
You understand even a moderate account say $1000 trading a $1 per pip on a CHF which is fine for 1K, was suddenly SL's out at -$30000 don't you ?? in 0.1 seconds right ??
Not really. The pair dropped like 2200 pips, so if you get filled on the low the account would be ~1200 in the red in your example.
I understand many people were short CHF for a tiny bit of carry, with insane leverage to make it worth it a little more. Madness.
You mention the first level that it traded at, the main issue would have been the volume traded at this level. From what I understand it just blew through these levels. So really no chance to get out.Not really. The pair dropped like 2200 pips, so if you get filled on the low the account would be ~1200 in the red in your example.
I understand many people were short CHF for a tiny bit of carry, with insane leverage to make it worth it a little more. Madness.
Cheers John
You mention the first level that it traded at, the main issue would have been the volume traded at this level. From what I understand it just blew through these levels. So really no chance to get out.
Cheers John
What are you talking about. The low was 0.9704 mid-px. There is no possible way you would have produced a loss of 30k with a 10K position. Even a fill @0.0000 would result in loss of only ~$15K.