Terry FXPRIMUS
President of FXPRIMUS
- Messages
- 6
Response to GK (2)
Dear GK,
I appreciate the time you put in your response, but I'm fearful this is the start of going around in circles. It appears that we have disagreements on most every point you raised and I responded to, and I'm afraid that the chasm between what I viewed as the facts and what you viewed as the facts is quite large.
Apart from the other points you brought up, i.e. the registered letter, a trade error message, request for "written confirmation from our institutional liquidity source," and comparison between STP and DMA (which I'll address briefly later), the most troubling to me is point 4, where there is still confusion over the margin call, and insinuation that we somehow manipulated the calculations in your account. In looking at your account, I did my best to re-create what occurred with your margin call. I kindly request you indulge me here, and take a moment to read and understand the explanation below, as this is important that you understand this. For the explanation to make sense, I need to provide balances, equity etc., but of course will leave out your MT4 & Order Numbers.
1. Your margin call took place on 8/26. As of end of day on 8/25, you're account details were as follows:
Balance: $10,859.43
Floating P/L: -$8,324.07
Equity: $2,535.36
You had the following open positions
You had 5 long gold positions of total 1.13 and 1 short gold position of total 1.0 for a Net Position of long 0.13
You had 2 long gbp/usd positions of total 0.2 and 1 short gbp/usd position of total .01 for a Net Position of long 0.19
So before we continue your equity going into the start of the trading day of 8/26 was $2,535.36, with a floating loss of $8,324.07 and you had 9 total positions. The closing price of Gold on 8/25 was 1774.52.
In Gold, with 1.0 lot, a .01 increase or decrease is equal to USD1. So a move in gold from 1764.00 to 1765.00 is equivalent to $100.
Your leverage in your account was 400:1, and default leverage on Gold is set to 100:1 regardless.
On 8/26
1. Your first transaction is @ 07:19 and is a close of a long 0.8 Gold for a $1,283.20 profit bringing your Net Gold position to short 0.67.
2. Second transaction is @ 07:33 and is a close of a long .03 Gold for a $22.44 profit bringing your Net Gold position to short 0.70.
3. Third transaction is @ 08:00 and is a close of a long .05 Gold for a $4.60 profit bringing your Net Gold position to short 0.75
4. Fourth transaction is @ 09:36 and is a close of a long .05 Gold for a $2.15 profit bringing your Net Gold position to short 0.80
5. Your 5th through 13th transactions are in Gbp/Usd and really are a non-factor in the Margin Call as they are taking up very little margin, and the net result of those trades was -$168.76
Then the fateful 17:00 hour arrives:
Our system does not provide second by second updates on archived client equity as its really not necessary, and would rarely if ever be used. What we can do, however is reconstruct your account @ 17:00 hours based on current market quotes, and positions:
As noted above at 17:00, you were net short 0.80 Gold and had about .02 position in Gbp/Usd, so let's focus on the Gold position. Based on the positions you closed prior to 17:00 your equity increased by $1,300 bringing your Equity to approximately $3,835. Now in order to calculate floating loss difference, remember closing price was 1774.52 on 8/25 and as of 17:00, the price was 1781.82, so there was a 700 pip difference. So again, given that you were net short 0.80, that means your floating loss increased $700. Soooo,
Equity: $3,835 (figure including all closed trades as of 17:00)
Equity: $3,135 (figure including above and additional $700 of floating losses)
Since you were short 0.80, and the margin on Gold is 1:100, this means you had approximately $800 in used margin. In terms of %, you would take the Equity/Used Margin X 100. In using your figures, we would take $3,135/800 X 100 = 391.87%.
Before continuing, please see below a snippet from Section 1.6 from our Terms & Conditions:
The Company has instituted a Margin Call Policy to protect Customers from losing more money than they have available in their accounts, and to protect the Company. Margin calls are executed when a Customer’s account has less equity available than required to maintain his or her open positions. The Company's margin calls are activated in real-time on an automatic basis, and occur when a Customer's Equity (Liquidation Value) reaches a level that is equivalent to 30% of Used (Open) Margin. This 30% is known as the Maintenance Level. Via the Company's MT4 trading platform, positions are closed prior to the market having a chance to move further against the client’s trades.
In the example we've gone over a few times, the Ask rose to 1788.33, the bid then dropped a few seconds later to 1766.00. The fact that you were not completely hedged, what occurred is basically you were whipsawed, and as a result of the wild spread you received a margin call which resulted as margin calls usually do, in a cascading effect.
I really don't know what else I can do in terms of explaining the margin call and why your account received a margin call. The absolute bottom line in this GK, is given the volatility in Gold combined with the fact that you entered the trading day on 8/26 with over a USD8,500 floating loss and an equity of $2,500, with an exposure of close to 1.0 full lot, was very risky, and you were not in a position to withstand the whipsaw movement that happened. If you had just a few extra hundred dollars in your account, we wouldn't even be having this discussion.
In terms of the other items you listed, I will touch on them briefly, as I've spent another 3+ hours today on this issue:
A) Regarding the Market is Closed message, as support explained to you, we see that you have/had a history of logging in and out of your account every 4-5 minutes, continuously. This could be due to your EA, I'm not sure. The time you incurred the error message, as support pointed out occurred a few seconds after you logged in. We did not get reports from any other clients during this time regarding trading in Gold or any of our instruments. So, to be honest, I'm not really sure what to advise you of hear to give you satisfaction as this seems that it was specific to your account at this time.
B) I am not able to nor am I going to provide a written confirmation from our liquidity providers. I think a majority of people would agree my support and I have gone way above and beyond to explain the margin call situation to you, gold volatility, etc. and unfortunately, I've done all I can do here in terms of explanations and analysis.
C) I will take your word for it that STP is not the same as a DMA broker. I have no interest in debating this with you, and it serves no purpose.
D) I have no idea what letter you're referring to. Has anyone signed for this letter if it was sent certified mail? If so please provide who signed for it, and the address the letter was sent to. I'm not doubting you sent it, only I have not received it or have been notified by our administrators they have received it either.
In closing, GK, as much as I would like to continue on this forum, reality is, I have a brokerage to run. I have answered your inquiries as completely and concisely as I possibly can, and have now spent quite a bit of time. You deserved an in depth response and my attention and that is what I provided to you. If you require any additional information on this or any other inquiries, kindly email our support or contact us via live chat. I'll be happy to respond to general inquiries on this specific forum, but honestly would rather not, as I would rather not the word FXPRIMUS keep appearing at the top of forum called "Hot Scam Alerts" folder
. Feel free to email me at president@fxprimus.com
Much appreciated.
Regards,
Terry Thompson
President-FXPRIMUS
Dear GK,
I appreciate the time you put in your response, but I'm fearful this is the start of going around in circles. It appears that we have disagreements on most every point you raised and I responded to, and I'm afraid that the chasm between what I viewed as the facts and what you viewed as the facts is quite large.
Apart from the other points you brought up, i.e. the registered letter, a trade error message, request for "written confirmation from our institutional liquidity source," and comparison between STP and DMA (which I'll address briefly later), the most troubling to me is point 4, where there is still confusion over the margin call, and insinuation that we somehow manipulated the calculations in your account. In looking at your account, I did my best to re-create what occurred with your margin call. I kindly request you indulge me here, and take a moment to read and understand the explanation below, as this is important that you understand this. For the explanation to make sense, I need to provide balances, equity etc., but of course will leave out your MT4 & Order Numbers.
1. Your margin call took place on 8/26. As of end of day on 8/25, you're account details were as follows:
Balance: $10,859.43
Floating P/L: -$8,324.07
Equity: $2,535.36
You had the following open positions
You had 5 long gold positions of total 1.13 and 1 short gold position of total 1.0 for a Net Position of long 0.13
You had 2 long gbp/usd positions of total 0.2 and 1 short gbp/usd position of total .01 for a Net Position of long 0.19
So before we continue your equity going into the start of the trading day of 8/26 was $2,535.36, with a floating loss of $8,324.07 and you had 9 total positions. The closing price of Gold on 8/25 was 1774.52.
In Gold, with 1.0 lot, a .01 increase or decrease is equal to USD1. So a move in gold from 1764.00 to 1765.00 is equivalent to $100.
Your leverage in your account was 400:1, and default leverage on Gold is set to 100:1 regardless.
On 8/26
1. Your first transaction is @ 07:19 and is a close of a long 0.8 Gold for a $1,283.20 profit bringing your Net Gold position to short 0.67.
2. Second transaction is @ 07:33 and is a close of a long .03 Gold for a $22.44 profit bringing your Net Gold position to short 0.70.
3. Third transaction is @ 08:00 and is a close of a long .05 Gold for a $4.60 profit bringing your Net Gold position to short 0.75
4. Fourth transaction is @ 09:36 and is a close of a long .05 Gold for a $2.15 profit bringing your Net Gold position to short 0.80
5. Your 5th through 13th transactions are in Gbp/Usd and really are a non-factor in the Margin Call as they are taking up very little margin, and the net result of those trades was -$168.76
Then the fateful 17:00 hour arrives:
Our system does not provide second by second updates on archived client equity as its really not necessary, and would rarely if ever be used. What we can do, however is reconstruct your account @ 17:00 hours based on current market quotes, and positions:
As noted above at 17:00, you were net short 0.80 Gold and had about .02 position in Gbp/Usd, so let's focus on the Gold position. Based on the positions you closed prior to 17:00 your equity increased by $1,300 bringing your Equity to approximately $3,835. Now in order to calculate floating loss difference, remember closing price was 1774.52 on 8/25 and as of 17:00, the price was 1781.82, so there was a 700 pip difference. So again, given that you were net short 0.80, that means your floating loss increased $700. Soooo,
Equity: $3,835 (figure including all closed trades as of 17:00)
Equity: $3,135 (figure including above and additional $700 of floating losses)
Since you were short 0.80, and the margin on Gold is 1:100, this means you had approximately $800 in used margin. In terms of %, you would take the Equity/Used Margin X 100. In using your figures, we would take $3,135/800 X 100 = 391.87%.
Before continuing, please see below a snippet from Section 1.6 from our Terms & Conditions:
The Company has instituted a Margin Call Policy to protect Customers from losing more money than they have available in their accounts, and to protect the Company. Margin calls are executed when a Customer’s account has less equity available than required to maintain his or her open positions. The Company's margin calls are activated in real-time on an automatic basis, and occur when a Customer's Equity (Liquidation Value) reaches a level that is equivalent to 30% of Used (Open) Margin. This 30% is known as the Maintenance Level. Via the Company's MT4 trading platform, positions are closed prior to the market having a chance to move further against the client’s trades.
In the example we've gone over a few times, the Ask rose to 1788.33, the bid then dropped a few seconds later to 1766.00. The fact that you were not completely hedged, what occurred is basically you were whipsawed, and as a result of the wild spread you received a margin call which resulted as margin calls usually do, in a cascading effect.
I really don't know what else I can do in terms of explaining the margin call and why your account received a margin call. The absolute bottom line in this GK, is given the volatility in Gold combined with the fact that you entered the trading day on 8/26 with over a USD8,500 floating loss and an equity of $2,500, with an exposure of close to 1.0 full lot, was very risky, and you were not in a position to withstand the whipsaw movement that happened. If you had just a few extra hundred dollars in your account, we wouldn't even be having this discussion.
In terms of the other items you listed, I will touch on them briefly, as I've spent another 3+ hours today on this issue:
A) Regarding the Market is Closed message, as support explained to you, we see that you have/had a history of logging in and out of your account every 4-5 minutes, continuously. This could be due to your EA, I'm not sure. The time you incurred the error message, as support pointed out occurred a few seconds after you logged in. We did not get reports from any other clients during this time regarding trading in Gold or any of our instruments. So, to be honest, I'm not really sure what to advise you of hear to give you satisfaction as this seems that it was specific to your account at this time.
B) I am not able to nor am I going to provide a written confirmation from our liquidity providers. I think a majority of people would agree my support and I have gone way above and beyond to explain the margin call situation to you, gold volatility, etc. and unfortunately, I've done all I can do here in terms of explanations and analysis.
C) I will take your word for it that STP is not the same as a DMA broker. I have no interest in debating this with you, and it serves no purpose.
D) I have no idea what letter you're referring to. Has anyone signed for this letter if it was sent certified mail? If so please provide who signed for it, and the address the letter was sent to. I'm not doubting you sent it, only I have not received it or have been notified by our administrators they have received it either.
In closing, GK, as much as I would like to continue on this forum, reality is, I have a brokerage to run. I have answered your inquiries as completely and concisely as I possibly can, and have now spent quite a bit of time. You deserved an in depth response and my attention and that is what I provided to you. If you require any additional information on this or any other inquiries, kindly email our support or contact us via live chat. I'll be happy to respond to general inquiries on this specific forum, but honestly would rather not, as I would rather not the word FXPRIMUS keep appearing at the top of forum called "Hot Scam Alerts" folder
. Feel free to email me at president@fxprimus.comMuch appreciated.
Regards,
Terry Thompson
President-FXPRIMUS
