Finally my explanation on why you were really stopped out, why this was done without warning and what appeared to be seconds.
Since I took over this case I have stressed that the cause of the stop out was because of the size of the gross exposure relative to the accounts equity. Wide spreads are not the cause, these are simply incidental. In other words the account was on the brink of blow up, it just needed a market event in the form of a rally in the USDCAD or spread widening to speed up the process.
Gross exposure is the total of long and short positions. In Rahman’s case this was 2.9 lots long and 3.1 lots short for a total of 6 lots open exposure on USDCAD. Gross exposure is important as the bid ask rates in the platform will determine the unrealised PnL on all open positions. This means that when spreads widen the long and short positions will become worth less and quickly diminish the equity in an account.
The 6 lots gross exposure is equal to 600,000 USD. At the time of the stop out Rahman’s equity was approximately $220. This means the exposure on Rahman’s account was 2727 times greater than his equity. Obviously this kind of exposure doesn’t give the account a fighting chance since it only requires a modest increase in spreads to send the account into negative equity.
In the graph below you can see the bid/ask and unrealised PnL on Rahman’s account between 16:59-17:01, I have included a table in the top right of the graph so you can see the effect of the widening spreads from 16:59:50 to 16:59:51 (one second) where the account went from 284% margin level to a low of -36%. Over this second spreads increased from 2.8 pips to a max of 7.5 pips.
If an account goes from 284% to -36% margin level in a second then it is not reasonable to expect the platform to provide a margin call warning before any kind of stop out of open positions occurs. Both would have to happen at the same time to prevent the account going into a large negative and the client owing the broker money. Case in point would be the SNB drama in January this year.
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Once the first liquidation occurred at 16:59:51 the server was correct in continuing to liquidate positions as the account had a negative equity and a growing used margin amount as hedges were unwound.