We appreciate you coming to FPA and would like to again explain the situation.
We would like to draw your attention to the fact that this situation took place two years ago. FBS is developing all the time. FBS company has been operating since 2009 and we are constantly improving our trading conditions and take into consideration our clients’ wishes.
FBS has created the Customer Agreement so it covers most of the possible situations, so that our clients know what to expect in any given situation. Thus, all traders may work out their trading strategy. Please, kindly be reminded, that by registering an account with FBS company the Client further represents that he/she has complete understanding and is agreeing with all terms and conditions of Customer Agreement (p.1.2.2.), and since, according to the Customer Agreement, in order to minimize Client's risks at the time of market opening on Monday, <...> the Company reserves the right to lower the leverage and change margin requirements severalfold (p.3.7.4.), our clients are already informed that the leverage may be changed before Market opening, especially in the event the conditions come, different from the regular ones.
On July 5th, 2015 there has been a referendum in Greece. This news piece had great influence on the Market. Therefore most of the reliable brokers have lowered the leverage, since the bigger leverage is, the more risks a trader is likely to encounter.
Considering the time of leverage decrease different brokers prefer different methods. Some of the brokers lower the leverage several hours before Market closure, but this method is quite risky for those clients, who want to close their orders right before Market closure, because they wait for the suitable price, since abrupt leverage decrease can cause unexpected Stop Outs. The other method is lowering the leverage before Market opening. This way, those clients, who want to close orders before Market closure can do it without any difficulties, and those clients, who want to leave their orders for a weekend may foresee the leverage decrease and calculate the needed order volume and margin or even deposit on their account in order to avoid orders closure. FBS company always tries to look into clients’ needs, so in this abnormal situation the second variant has been considered as the most preferable.
In this case, if a client has calculated the volume and margin beforehand, the leverage decrease will not bring any damage to the client’s balance and this client will be able to close his/her order any time he prefers. In case the leverage decrease impacts the margin, during a so-called Pre-Market session the order may be closed by real Market Closure price (by Stop Out), if right after the trading session closure there is no enough margin to keep the order open. In most cases this allows to prevent account from going negative. Yet, please, kindly be informed that this an exceptional situation, triggered by unstable Market situation.
Please, kindly be noted, that Pre-Market means that the orders are executed before official Market opening (exactly one hour before Market opening). Next, we would like to clarify, that Pre-Market is used not only for clients’ advantage and trading, but also for clearing operations execution, which is needed for adequate work of any big broker company. By clearing means that we make review calculation of the margin and deposit. Positive margin — is added to the deposit, negative one is deducted.
And at last we would like to emphasize that the time of leverage change do not influence the trading result in this case, since even if the leverage was changed right before Market closure, the order would still have been closed automatically by Stop Out. as at the moment of order closure the margin was 1670.6, 333.0 – remaining funds at the time of order closure, 19.9% is the margin level at the time of order closure. As you remember, the Company is entitled to mandatory closing of a Client’s open position without prior notification of the latter one, if Margin level is lower than 20% of the necessary margin for maintaining open positions.
We hope that this official statement has managed to clear up all the misunderstandings.