FPA Forums and Reviews Admin
Will Your Broker Survive the CHF Move?
Just in case you missed the news, the Swiss National Bank removed their longstanding policy to keep the EUR/CHF from falling below 1.200. The effects on the market were huge. Price moved down quickly and there was little liquidity. Stop losses were filled at the next available price, in some cases hundreds of pips below the original SL. Many accounts didn't just experience a margin call. Many went negative.
For those of you who didn't suffer any trading losses, the problems may not be over. The issue is what is happening with brokers where the client base was mostly long on the EUR/CHF and related pairs. If the broker really passed the trades onto the market, the broker lost more money than was in the client accounts.
Some brokers offer negative balance protection. Brokers which don't offer negative balance protection still have to find a way to collect money owed by clients. Either way, many brokers are short on cash.
I'm going to put brokers into 4 categories...
1. Dead or dying.
ExcelMarkets.com has announced that they will go out of business.
Alpari UK issued conflicting statements. As of Monday, they say they are insolvent.
2. In danger of collapse.
I was going to put Alpari UK here, but the latest announcement moved them to category 1.
3. Severely damaged, but may recover.
FXCM's stock plummeted. It has received loans and may be able to recover.
4. Little or no damage. Business as usual.
Several brokers have announced in the Forex Peace Army Press Releases folder that they didn't suffer major damage.
Please use this thread for reports on which brokers are in which categories and other news related to the move of the Swiss Franc caused by the Swiss National Bank.