IB loses $120M from Swiss currency move

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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In the last 10 years has anything like this happened before, 20 years, 30 years? it's nuts.

The most liquid market in the world, $5.3 trillion a day and liquidity 'disappears'.
 
I remember reading on IB reports that they had a section in their balance sheet for money owed by customers that they are going after. They might get some of this money back. Does anyone know what is their T&C on this?
 
All it means is that in a fast market the banks are not quoting, so nobody to take the other side. The banks are not obliged to make a market, as they are not market makers like we have on the exchanges.

I have the FXCM feed via Sierra Charts. The USD.CHF 04.30 bar (10 minute) had a high of 1.0220 and closed at 0.9859. The next bar was the 05.10 bar. In that gap there were no quotes.

I checked my Oanda feed also and there is a gap from 04.40 to 05.50 for USD.CHF; I suspect it would be the same for the other brokers.
 
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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FXCM is back up to nearly $5 on news of a bailout / capital infusion from LUK. Looking like it might be a buy - they might deserve to lose 1/3 their market cap if that's how much they lost, but they're down by 2/3 even now in the after hours once the news came.


Leucadia National Corporation ( LUK ) and FXCM announce $300 mln financing to permit FXCM to continue normal operations (shares halted) (FXCM ) : Leucadia National Corporation ( LUK ) and the co announced that Leucadia would be providing $300 mln in cash to FXCM and its subsidiaries that will permit FXCM to meet its regulatory-capital requirements and continue normal operations after yesterday's loss of $225 mln due to the unprecedented actions of the Swiss National Bank.
  • Under the terms of the agreements , Leucadia is investing $300 mln in cash into FXCM in the form of a $300 mln senior secured term loan with a two-year maturity and an initial coupon of 10%. The term loan obligations are guaranteed, on a secured basis, by certain of FXCM's domestic subsidiaries.
  • In addition, Leucadia will receive, in the event of a sale of FXCM or its subsidiaries, a certain percentage of the sale proceeds and, in the event FXCM makes other distributions on account of its equity, a corresponding payment for its own account.
 
good to see fxcm has been saved!
btw, could you trade FXCM? I wanted to, was the stock was halted. if yes, what broker could you do that?
 
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