IB loses $120M from Swiss currency move

IB is not a bucket shop, but the bucket shops are getting killed. FXCM is at less than $2, down from $16. Is that because the bucket shop brokers were short CHF and the customers were long? That makes it sound as if the customers made out huge.
 
billyjoerob said:
IB is not a bucket shop, but the bucket shops are getting killed. FXCM is at less than $2, down from $16. Is that because the bucket shop brokers were short CHF and the customers were long? That makes it sound as if the customers made out huge.
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Well well well, I guess some brokers will remember that "retail" is not always the dumb money! lol
 
billyjoerob said:
IB is not a bucket shop, but the bucket shops are getting killed. FXCM is at less than $2, down from $16. Is that because the bucket shop brokers were short CHF and the customers were long? That makes it sound as if the customers made out huge.
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no, it means FXCM customers lost more than their account balance and FXCM couldn't close them out in time before that happened. So they are stuck with many customers who technically owe them money, money which they will never be able to collect.
 
loyek590 said:
no, it means FXCM customers lost more than their account balance and FXCM couldn't close them out in time before that happened. So they are stuck with many customers who technically owe them money, money which they will never be able to collect.
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Exactly. At 12x you're bust at the opening tick after the SNB news. Now assume that there are guy sitting on 50x in the US and >100x offshore. I am surprised they didn't lose more. How did this stock not open at $1 yesterday? I would have shorted it if I had known they were public.
 
billyjoerob said:
yeah it looks like I was wrong. But why did FXCM get cleaned out when Gain Cap is doing OK.
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Gain raised their margin requirement from 2% to 5% in eur.chf a while back, anticipating the risk the breakdown of the peg could unleash.
 
MoreLeverage said:
Lots of leveraged FX speculators getting wiped out, and this was the excess loss that will fall on IB if they don't recover from the individuals some how.

http://finance.yahoo.com/news/interactive-brokers-lost-120-million-150612206.html

About 2.5% of their equity, so the 6% selloff in IBKR might be overdone.
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The article doesn't say if these losses were on currency futures (IB is self-clearing) or their spot Forex customers (don't know if IB is an FX dealer or broker). Waiting for more details.
 
there was some fear about IB, as the stock opened 10% down today, but it has recovered everything by now. so thank god, no need to worry.

i still can't believe what a bunch a amateur buggers the SNB are. getting the EUR/CHF down 30% at the NZD/CHF 50% at peak time. probably they had told their wives again and wanted to play the market a little. what a bunch of buggers! sending half a dozen brokers out of business and killing retails accounts en masse. I really hope they'll be kicked out and all their fraudulent winnings confiscated... although that won't happen
 
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