On 22 May 2014, I traded on the AUD/USD instrument (10 orders) and consequently Gain Capital – Forex.com UK Limited (the company) cancelled all my profits. When I enquired why, in their Final Answer (FA) they told me the orders were executed at off-market prices. However, the company failed to provide any evidence in support of their allegation.
In their FA, they rely on clause 28.5 of the Customer Agreement, which provides:
“Internet, connectivity delays, and price feed errors sometimes create a situation where the price displayed on the Trading Systems do not accurately reflect the market rates. The concept of arbitrage and “scalping”, or taking advantage of these internet delays, cannot exist in an over-the-counter market where the client is buying or selling directly from the market maker. FOREX.com UK does not permit the practice of arbitrage on the Trading Systems. Transactions that rely on price latency arbitrage opportunities may be revoked. FOREX.com UK reserves the right to make the necessary corrections or adjustments on the Account involved. Accounts that rely on arbitrage strategies may at FOREX.com UK’s sole discretion be subject to FOREX.com UK’s intervention and FOREX.com UK’s approval of any Orders.”
The provision is linked to another provision leading eventually to voidance of all transactions executed on the financial instrument in question.
I placed all of the 10 orders on the available price and the orders were confirmed at 1:45:00. This is undisputed. The fact that the price of 0.92268 was available at the time of placement of the order is supported by the MT4 log and Account Statement. Furthermore, the Bloomberg prices which reflect the real market price are in complete accord with the company’s quotation. Bloomberg screenshot shows the prices at 1:45:00 between 0.92260 and 0.92590.
For the reasons stated above, I submit that the company cannot rely on the incorrect market prices clause nor any other and should honor the trades.
In their FA, they rely on clause 28.5 of the Customer Agreement, which provides:
“Internet, connectivity delays, and price feed errors sometimes create a situation where the price displayed on the Trading Systems do not accurately reflect the market rates. The concept of arbitrage and “scalping”, or taking advantage of these internet delays, cannot exist in an over-the-counter market where the client is buying or selling directly from the market maker. FOREX.com UK does not permit the practice of arbitrage on the Trading Systems. Transactions that rely on price latency arbitrage opportunities may be revoked. FOREX.com UK reserves the right to make the necessary corrections or adjustments on the Account involved. Accounts that rely on arbitrage strategies may at FOREX.com UK’s sole discretion be subject to FOREX.com UK’s intervention and FOREX.com UK’s approval of any Orders.”
The provision is linked to another provision leading eventually to voidance of all transactions executed on the financial instrument in question.
I placed all of the 10 orders on the available price and the orders were confirmed at 1:45:00. This is undisputed. The fact that the price of 0.92268 was available at the time of placement of the order is supported by the MT4 log and Account Statement. Furthermore, the Bloomberg prices which reflect the real market price are in complete accord with the company’s quotation. Bloomberg screenshot shows the prices at 1:45:00 between 0.92260 and 0.92590.
For the reasons stated above, I submit that the company cannot rely on the incorrect market prices clause nor any other and should honor the trades.
