Hey buddy,
Thanks for your kind advice.
I think you can refer closer to the info Ralph has provided. He's given us some pretty awesome pointers and raised some great points!
In response to:
1. You would need to check with multiple brokers. If the contracts are exchange traded, the rollovers would be set by the exchange.
2. Laws vary by country. If you or the broker is in the USA, then the CFTC would be the place to start. If it's NZ, see what dispute resolution scheme the broker belongs to.
3. Depends on local laws. Personally, I wouldn't do business with any broker which wouldn't clearly disclose all information regarding trading products.
4. First, you need to determine if "technical error" is something that happened or if it's a lame excuse.
5. Probably, but getting the above resolved will make it easier to find out what may have been missed.
My findings:
1. I agree contracts are exchange traded. Have a look here:
http://www.cmegroup.com/trading/energy/crude-oil/light-sweet-crude.html
However, just like how other futures contracts are traded over the exchange for hedging purposes; following month contracts have movable prices due to daily trade activity. Meaning to say, the market as well as some brokers allow you to trade contracts ahead of the typical 'near' (1 month) widely offered contract. For example, Dukascopy is one of these brokers, Saxo Bank might be as well maybe? Just guessing the bigger guys have this segments covered. Like a fixed deposit (FD), it pretty much depends on your placement period / maturity date.
Rollovers however, are a separate issue. In other words, it is totally possible for the broker houses liquidity provider to conduct a rollover on any date. The usual practice is on a certain date close to expiry (but not necessarily on the date of expiry itself; best practice for brokers seem to be a few days prior to expiry to avoid physical delivery issues, etc).
The broker house'es nondisclosure of this date however, makes it a little ambiguous. I have obtained new info yesterday on their rollover after poking around as follows:
"The rollover happens one a month. Get the 25th of the month, subtract 7 business days and you get the starting date. It lasts for 3 business days:
Example: August 25 – 7 business days = 15 August. Rollover ends on 17.08".
This somehow conforms with their previous rollover done; which is however done at a slightly earlier date compared to other broker houses. Existence of such gaps allow for arbitrage opportunities. For example when market is set to contango, BUY futures on current broker house and SELL futures on another broker house. Consider the following scenarios in a typical one month WTI contract:
i) If rollover indeed happens earlier, then the gap will be your profit.
ii) If rollover happens earlier but next 'near' futures has been heavily traded to better reflect current contract price, the gap will still be your profit as you have sold early as well on the other end.
iii) If rollover happens on the same time compared to other brokers, in the event there is no 'actual gap'; then you might be looking at a loss in terms of 'brokerage fee' and 'rollover cost'.
2) If it's New Zealand, the major ones are the Financial Dispute Resolution (FDR) and Financial Markets Authority (FMA) with links provided below as follows:
i) FDR -
http://www.fdr.org.nz/
ii) FMA -
https://fma.govt.nz/
Note however that NZ has the
****iest regulation over brokers. It clearly states that regulation of entities are limited. They have come under heavy criticism for this following many customer complaints over delinquent brokers. More info on this is as follows:
i)
https://www.100forexbrokers.com/forex-regulation
ii)
http://www.financemagnates.com/fore...klash-against-forex-brokers-hits-a-roadblock/
3) Agreed. I am looking at a gradual switch to an entity which is more reputable for both the benefit of our marketing agents and clients over the longer term.
4) I'm almost certain it's a lame excuse. However, I have to agree on Ralph who views that not much can be done. Firstly, they have agreed that rebates would be given on the spike back 'downwards' not 'upwards' as they latter amounts to a justified 'rollover' on the 17/02. Secondly, due to such crappy regulation, they are in no ways obligated to disclose any further information to me. The info would be deemed as 'sensitive' and only a court order can make this happen. For such a small magnitude of loss, I rather forgo this and buy you guys drinks instead! Hahaha.....However I do encourage those who have suffered heavy losses to go all out on this issue. Losses on our end as a whole do not amount to more than USD$1,000. Many of our guys do not touch WTI. Therefore, definitely not worth the trouble if u ask me.
5) I guess with all said, much has been resolved. The next I'm going to do is go in large early before their next rollover and see what happens. If there is indeed a gap, then following my explanation above, I should be entitled to the profits; just like how I was allowed to hit SL previously. Let's see how this goes
Cheers all!