He knew he was being filled at off market prices, but the firm was filling him. The firm should take responsibility for that.
GAIN Capital takes Forex trader to Court for taking advantage of order execution error
- Thread starter TrAndy2022
- Start date
He knew he was being filled at off market prices, but the firm was filling him. The firm should take responsibility for that.
- He started out by placing an entry Limit order to buy.
- On the order entry window, Defendant would have seen that the current USD/CAD market price was around 1.2587, which is approximately 18 points higher than his desired entry price of 1.25692.
- His initial Limit order was filled instantly at the price of 1.25685
- Defendant closed the position at the market price of 1.25877
Or did I misread something?
This sounds downright absurd. If you send a limit buy order (and NOT a stop limit), it can only get executed when the price actually trades below that price. The market was trading at 1.2587, still higher than his limit order at 1.25692, so obviously it should not have been filled.
- He started out by placing an entry Limit order to buy.
- On the order entry window, Defendant would have seen that the current USD/CAD market price was around 1.2587, which is approximately 18 points higher than his desired entry price of 1.25692.
- His initial Limit order was filled instantly at the price of 1.25685
- Defendant closed the position at the market price of 1.25877
Like I explained before, in retail forex, there is NO centralized exchange to determine what the "market price" is supposed to be. The broker is free to quote whatever price it wants. For those market makers like Gain Capital who trade against traders, delayed quotes and requoting is very common. That's how they make money off traders so that could very likely be a delayed quote or a requote but somehow it worked in the trader's favour. How is a trader supposed to know? If Gain Capital is not even responsible for their own system according to the trade agreement how is the trader responsible for Gain Capital's system?? LOL That is even more absurd.
judge can easily throw out the terms. It happend for me in small claims court with a parking garage. They destroyed my clutch and their defense was they weren’t responsible because of their terms. Judge threw out their argument and sided with me.
It still doesn't explain how he got filled when best bid/offer (delayed or not) was clearly trading above his limit order price. It shouldn't have gotten filled in the first place.
This sounds downright absurd. If you send a limit buy order (and NOT a stop limit), it can only get executed when the price actually trades below that price. The market was trading at 1.2587, still higher than his limit order at 1.25692, so obviously it should not have been filled.
- He started out by placing an entry Limit order to buy.
- On the order entry window, Defendant would have seen that the current USD/CAD market price was around 1.2587, which is approximately 18 points higher than his desired entry price of 1.25692.
- His initial Limit order was filled instantly at the price of 1.25685
- Defendant closed the position at the market price of 1.25877
It seems like he is an extremely alert arbitrage trader.
That's the way to go.
Delayed quotes and requoting? Which is what they use in the platform all the time and is pretty much the norm that you can expect from market maker-model brokers like Gain Capital. Do you or have you ever traded Forex? If you have or do, you would know what I am talking about. Retail forex is NOT the same as stocks, options and futures and etc. that have centralized exchanges that determine the price and publish the price for everybody to see and the price remains the same no matter which broker you trade with. In retail forex, it's not the same. It's an OTC product where the price is negotiated between the buyer and the seller but since we retail traders is the weaker party, so the price is basically determined by the broker. The broker displays the price and we trader trade it and that's it. And every single forex broker has its own price. With this trader, it was the same. Gain Capital displayed the price and he traded it. Whether that price is "right" or "wrong", that trader wouldn't have known. It was a price that he got filled at. He entered a valid legal order into the system and got filled.
Lol. How can they be "ill-gotten gains" when the guy was executing orders on his counterparty's platform, using their software, at prices which they quoted, orders submitted via their system, and fills which they gave him?
They should be laughed out of court. It's a bucket shop trying to welsh out on some trades.
They should be laughed out of court. It's a bucket shop trying to welsh out on some trades.
It's "ill-gotten gains" because you are not supposed to profit from trading with them at the price displayed on the platform that they gave you. You are supposed to lose. The fact that you actually gained like this trader did must be "ill-gotten". This is basically what they are saying and this is what they would have to justify and basically admit if they go to court is that you as a trader lose with certainty if you sign up with brokers like Gain Capital that operates in a non-risk-neutral market-making model. I mean we already know that but now they would actually have to put it on paper and admit it as a fact.
So if I were Gain Capital, I would just let this trader keep his money instead of acting like a casino that doesn't want to pay up. LOL