Gain Capital and market orders

B

bluelou

Gain Capital rejected my EURUSD market order today post -FOMC.

I don't trade forex through Interactive Brokers, however, my understanding is that IAB is acting as a broker, not a dealer. Can IAB also reject a forex market order?

More detail:
BTW, I understand that Gain and forex dealers in general are crap ethically. I want to make sure that what they've done is within their rights and I'd like to know if a forex broker, such as IAB, plays the same tricks.

On the back of today's FOMC announcement my automated trading system submitted a market order to Gain Capital for the EURUSD pair. The order was rejected. I ended up getting filled manually a bit later w/no slippage so there was no loss but I'm really pissed.

I called Gain to see why they rejected the order and their response was that the market was "too volatile". I understand that forex dealers have a bad rep but I didn't realize that they can just walk away and refuse to fill a MARKET order. I guess that's what "best efforts" means in the customer agreement.

Thx in advance for your help,
Lou

P.S. BTW, Gain has done this to me 2x in the past 3 weeks.
 
I believe it is written somewhere in the account agreement with your broker, that such orders as Market/Limit/Stop may not be honoured or filled during certain events. Do you see similar clauses in your contract? If it is and you signed it, then yes they have the right to refuse your Market Order.
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You got requoted by a bucketshop.

Its like playing cards with known cheats and then being surprised when they do! Find another table (broker)
 
My customer agreement doesn't explicitly state that they can accept/reject a market order.

So, now I know what it means to be "requoted". My next question is does a firm like IAB do this? I'm asking b/c this is who I may switch to. They're acting as a forex broker, not a dealer, correct? So, I'm assuming that IAB shouldn't have the same incentive to walk away from market orders and this should not be an issue for IAB forex customers. Can anyone confirm that that this is their experience w/IAB.
 
Quote from bluelou:
My customer agreement doesn't explicitly state that they can accept/reject a market order.
So, now I know what it means to be "requoted". My next question is does a firm like IAB do this? I'm asking b/c this is who I may switch to. They're acting as a forex broker, not a dealer, correct? So, I'm assuming that IAB shouldn't have the same incentive to walk away from market orders and this should not be an issue for IAB forex customers. Can anyone confirm that that this is their experience w/IAB.
More...
Have you given IAB a call? If this is the broker you are going to next, it's best to talk through all your queries with the rep, while at the same time researching on forums. But calling them is faster.

Who is your broker? Forex.com or TradeStation.com? that clears through Gain Capital? Why did you select this broker?
 
@bstay,
Fair enough. Now that I've been on the receiving end of a "requote" and learned a little about that here I was hoping to find out who the reputable forex brokers were. I'm hoping that IAB may be one. I'm assuming that all of the dealers are bad news.

Also, who are the forex brokers? IAB, Hotspot, Currenex, who else? I don't have $250k+ to tie up exclusively in forex so that has also driven my choice of broker/dealer.

Thx,
Lou
 
That still doesn't make sense to me. The concept of market order is that you will either hit the bid or lift the offer - doesn't matter where/what the market is.

If I was quoted 200/201 for bid/offer. I send in a buy Market Order, it will execute the buy by lifting the offer - even if the damn market went to 400/500. I will get a buy at 500! That is the risk of market order. You get slippage through execution system latency. Better ones give you join the market order. So you will send a limit order at 201 to buy.

Can someone explain to me what requoting has to do with a non-executing market order? I assume that they didn't fill your market order b/c their system was down due to volumn, etc. Or their brokers can't fill all the orders that came through. Typically, a large firm would have something called back-to-back FX system. Essentially take the client order and fill it directly in the market without brokers - they make money in the quote that they gave you (larger spread, slightly delayed, or something shaddy).
 
@mickmak,
I'd like to know, too. I was unfamiliar w/requoting until this thread and I'm still not entirely sure what it includes and excludes. But, I'm totally perplexed as to why a dealer would reject a market order and cite "volatility" as the reason. I'm the one taking the risk w/a market order, why didn't they just give me a crappy fill instead of walking away?

Here's a summary of the trade (this was an exit following a price target):
EURUSD 11/3/10 14:17:29 Order: Sell Market

Here was the message from Gain:
14:17:29 GAIN Error[11] "Pair Not Dealable" affected Order: Sell Market

Then, my platform made a 2nd attempt to shut the strategy down altogether 2 seconds later:

14:17:31 GAIN Error[11] "Pair Not Dealable" affected Order: Sell Market

After the 2 error messages I called Gain and was told that they weren't able to execute at that time due to "volatility" but that I could try to place a new trade as volatility subsided.
 
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