this "monotonous regularity" you mention..
The last time something of this magnitude was perhaps in 1970 when the gold standard was removed..
http://www.pimco.com/EN/Insights/Pa...erience-of-Sleeping-Next-to-an-Elephant.aspx?
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EUR/CHF wipeout/margin call ... negative balance ... what to do?
- Thread starter Pentaquark
- Start date
The last time something of this magnitude was perhaps in 1970 when the gold standard was removed..
http://www.pimco.com/EN/Insights/Pa...erience-of-Sleeping-Next-to-an-Elephant.aspx?
Indeed, I am piecing all this together still, but at the end of this it sounds like the retail fx providers (like IB,Oanda etc) did not have the liquidity depth that they were tooting when push actually came to shove. Though from reading these boards it sounds like Oanda folks were still getting fills down to the lows than the IB guys.
You are joking of course. The Russian default in 98, that one got my attention, I was heavily short naked puts on indexes, I had it covered, dynamic hedging with futures, by the time the dust had settled I was wiped out, on the kerb pennyless, a sole parent raising two teenage sons, this was not the first time I've had to rise from the ashes. The RBA did a backflip that year as well, burnt quite a few professional traders (not forex amatures) around that time as well, who remembers the Kobe earthquake, 9-11, 2004 Tusnami, What about LTCM now there was an oxymoron what do you think it was like for some trading thru that fiasco, 2007/2008, the list could go on Ad Nausium the point being that if you were caught unprepared whilst heavily leveraged by any of these events then you were most likely toast. I would never say that it serves anyone right, we can only do what we believe to be correct with the knowlege we have at the time, but sometimes we are wrong and the market educates us. Se La Vethis "monotonous regularity" you mention..
The last time something of this magnitude was perhaps in 1970 when the gold standard was removed..
http://www.pimco.com/EN/Insights/Pa...erience-of-Sleeping-Next-to-an-Elephant.aspx?
Cheers John
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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.
My bad on that, looked like 20,000 on chf/jpy which i checked first.
My normal $10 per pip position, would of cost or made 20k, puttng me to -14k still an ouch.
you sound very much you have a beef in all this. And could you please provide a link to the "trader who lost 2.9 billion"? We are very curious learning about this poor chap.
And by the way, you would not be in any debt if you did not short CHF. Anyone who was short CHF should accept any possible consequences which includes a negative account balance and should own up to it.
Its posted in 1 of the related threads on here.
No beef, just preparing for the next wave, never traded chf ever, don't see many true black swans tis interesting, nearly took out my broker to, going full time soon, to bankrupt / account frozen in 1 second is a concern.
And they said there was orders, but enough volume to let 1mil traders out ? Ofcourse not.
the problem is with your broker if you truly could not get a fill above 1.00 (eur/chf). Connectivity costs money, maintenance and many retail brokers' business model does not allow for multi and cross connectivity. Has nothing to do with how many orders can or cannot be filled, it has to do with the fact that there was some liquidity and many retail brokers failed or were too arrogant to pick it up. My hunch to be honest is that either their automated risk management systems sucked or they gambled, thinking this would be a short term blip and ignored the small window of opportunity. I come to this conclusion because retail punters' positioning is pretty much identical at Oanda, FXCM, Saxobank..., however, brokers lost very divergent amounts of money. Hence it comes down to their internal risk management procedures that must have varied widely.
Its posted in 1 of the related threads on here.
No beef, just preparing for the next wave, never traded chf ever, don't see many true black swans tis interesting, nearly took out my broker to, going full time soon, to bankrupt / account frozen in 1 second is a concern.
And they said there was orders, but enough volume to let 1mil traders out ? Ofcourse not.
the problem is with your broker if you truly could not get a fill above 1.00 (eur/chf). Connectivity costs money, maintenance and many retail brokers' business model does not allow for multi and cross connectivity. Has nothing to do with how many orders can or cannot be filled, it has to do with the fact that there was some liquidity and many retail brokers failed or were too arrogant to pick it up. My hunch to be honest is that either their automated risk management systems sucked or they gambled, thinking this would be a short term blip and ignored the small window of opportunity. I come to this conclusion because retail punters' positioning is pretty much identical at Oanda, FXCM, Saxobank..., however, brokers lost very divergent amounts of money. Hence it comes down to their internal risk management procedures that must have varied widely.
Good job i don't hold over major news, unless i forget to check the calander, although could of still stopped my income.
No other pegged currency to create another meltdown is there ? Ofcourse a war breaking out or major terrorist event ie 911 mk2 then ouch.
Rule number 1 in trading: Never put more than a few% of your fortune in 1 investment.Did I say the OP shouldn't have to pay, can he afford to pay ? most likely not, this is going to force a lot of people to go bankrupt and lose everything, there house, there cars there savings, do you think that's right for a out of control circumstance in 0.01 seconds.
That's why I HOPE they come up with a sensible plan and so would you if you suddenly owed them 30K, it's in there interest as there unlikely to see 95% of the negatives anyway.
Sue the markets for being stupid enough to be able to move that kinda distance instantly, markets shouldn't work this way it's madness, happy to profit from but madness totally.
If applied this would have limited the damage for 99% of the people who lost now big.
Greed is very dangerous, and ignoring black swans too.
Forex is not for the average investor or trader. That should be clear now.
Maybe investigate who made big money in this move is not a bad idea. Some people should have know this before it happened. I still cannot believe that this was not done on purpose.
Maybe investigate who made big money in this move is not a bad idea. Some people should have know this before it happened. I still cannot believe that this was not done on purpose.
"He also said there was a "huge flow" of Swiss francs -- around 34.2 billion -- into Switzerland during December, according to the SNB, which is around 10 times the monthly average."
http://www.cnbc.com/id/102343957
Rule number 1 in trading: Never put more than a few% of your fortune in 1 investment.
If applied this would have limited the damage for 99% of the people who lost now big.
Greed is very dangerous, and ignoring black swans too.
Forex is not for the average investor or trader. That should be clear now.
Maybe investigate who made big money in this move is not a bad idea. Some people should have know this before it happened. I still cannot believe that this was not done on purpose.
You get most of us especially from the uk are poor therefore we trade to attempt to improve that, most of our free cash goes into our dream, so no fortune sadly.