Reply to: Anybody using Alpari UK (Forex broker)?

[SantaClaus]

Oh that's nice - on Friday their message was something along the lines that they are insolvent...

Yep, there was a message on their website saying they were insolvent.

Funny how they can change their mind.

[NotAllThere]

I think it was the Russian, in the Server Room, with the Pope.

FTFY

[MarillionFan]

Oh that's nice - on Friday their message was something along the lines that they are insolvent...

I think it was the Russian, in the Server Room, with the Rope.

[AtW]

Oh that's nice - on Friday their message was something along the lines that they are insolvent...

[DimPrawn]

On one of the trading forums, a guy was jubilant he had shorted the EURCHF...
... the joy quickly turned to dismay when he realised his funds were with (the now insolvent) Alpari.

I think Alpari UK are looking for a bailout:

Important announcement

The recent move on the Swiss franc caused by the Swiss National Bank’s unexpected policy reversal of capping the Swiss franc against the euro has resulted in exceptional volatility and extreme lack of liquidity. Retail client funds continue to be segregated in accordance with FCA rules. For the avoidance of any doubt and notwithstanding previous announcements by the company, Alpari (UK) Limited has not entered a formal insolvency process. The board of directors are urgently considering all options including a sale and are liaising closely with the FCA. We hope to make a further announcement shortly.

[AtW]

On one of the trading forums, a guy was jubilant he had shorted the EURCHF...
... the joy quickly turned to dismay when he realised his funds were with (the now insolvent) Alpari.

Well, in theory he should not lose his deposit as the clients money are supposed to be kept in separate account...

He certainly won't get his rich winnings though.

[SantaClaus]

I was massively short EURCHF, the £250,000,000 which vanished......I know where it is.

On one of the trading forums, a guy was jubilant he had shorted the EURCHF...
... the joy quickly turned to dismay when he realised his funds were with (the now insolvent) Alpari.

[DimPrawn]

Where is SantaClaus and other dirty Forex spekulants when you need 'em?

I was massively short EURCHF, the £250,000,000 which vanished......I know where it is.

[eek]

Letting someone bet is bad enough

Letting them bet on credit, which is effectively what Alpari did by not ensuring there was sufficient credit in the account to pay the margin call - is idiotic.

Edit: I wonder if the issue was that the market moved so fast that by the time Alpari worked out that the margin call had been exceeded - and they closed the trade (by executing a reverse trade) - the price had already moved so far that the margin wasn't covered by the client account.

Even so, that's still down to Alpari for not building in a sufficient buffer and/or systems that can close the trade quickly enough.

If you look at the market chart from Santa the drop is almost instant.

[centurian]

Yep but I'm surprised how this effects people. Why on earth would you be betting on the CHF when its moved in lockstep with the euro for years....

If you were going to bet on it the only approach would be to bet on the CHF against the euro....

Letting someone bet is bad enough

Letting them bet on credit, which is effectively what Alpari did by not ensuring there was sufficient credit in the account to pay the margin call - is idiotic.

Edit: I wonder if the issue was that the market moved so fast that by the time Alpari worked out that the margin call had been exceeded - and they closed the trade (by executing a reverse trade) - the price had already moved so far that the margin wasn't covered by the client account.

Even so, that's still down to Alpari for not building in a sufficient buffer and/or systems that can close the trade quickly enough.

[NotAllThere]

...
For a long time, retail traders thought buying the "floor" at 1.2000 (that very long horizontal consolidation area) in EURCHF was guaranteed money as the SNB had "capped" the currency at that level...

That was until the SNB removed the floor ...

Anyone who was money on that solely, was pretty stupid. The cap wasn't going to remain forever. I did read of a few people who've profited hugely.

I have a product that I sold to the UK - the payment (GBP) came through on Tuesday, converted to CHF. I make commission payments on the product every quarter - back into GBP. So that's a couple of thousand CHF I've made through the SNB's action. On the downside, I won't make so much money on future sales.

[TykeMerc]

True Nick, many of us have seen these crashes time after time.

The thing that makes them inevitable is that if the companies can avoid what just happened to Alpari (by being that bit cleverer or luckier and avoiding the bust killing them) then it's years of endless cash for feck all.

I'm sure you've seen the film Margin Call which while being an Ok, but not awesome film it does put the cycle of booms and busts on display quite clearly.

[NickFitz]

The thing that surprises me is that people - not the wise denizens of CUK, but all those other people whose job is to trade on the Foreign Exchange markets - are taken aback when tulip like this happens.

It happens all the time. OK, if your definition of "the time" is "within the three years since I got this job after leaving university" then it might come as a surprise; but why the **** do they put people with a three year (or less) institutional memory in charge of investments like this, and why do the investors let them?

I've lost count of the number of times some market has gone tits up in the years I've been on this twirling rock. I'm just waiting for the property market to go tits up again like it did in 1971, 1973, 1975, 1980, 1983, 1986, 1988… whatever, all those times before politicians realised they could con mugs into voting for them by promising house price rises that were doomed to vanish one day.

You know how all that other magic that will restore the economy to health never actually happens? That's because they steal the pixie dust and sprinkle it on house prices.

Soon all the energy of the pixies will have been sapped.

In any market, if you think you've got a good idea of what might happen on the basis of what happened in the last twenty years: seriously, you're ****ed. None of it makes any sense. Lock in your investments, and leave "leverage" to once-great companies that will be declared bankrupt next week. I saw people suffer in 1988-9 from believing that leverage was good, and they lost their homes. **** that tulip.

[AtW]

Not a chance.

You don't have any chances against them.

Better focus on your dirty spekulation and be happy,

[SantaClaus]

How about a white flag?

Not a chance.