2 FX Brokers Suffer "Significant Losses" After SNB Surprise, "In Breach Of Regulatory | Reviews of Brokers and Data Feeds


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2 FX Brokers Suffer "Significant Losses" After SNB Surprise, "In Breach Of Regulatory

  #30 (permalink)

Raleigh NC/USA
 
Trading Experience: Beginner
Platform: NinjaTrader
Favorite Futures: stocks
 
Posts: 29 since Oct 2014
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trendisyourfriend View Post
I got this email from Oanda:



Dear TrendIsYourFriend:

Early on January 15, 2015, the Swiss National Bank (SNB) sent global financial markets into turmoil with a surprise move to eliminate its three-year-old cap on the franc (CHF).

In the wake of this unprecedented market event, OANDA demonstrated its ongoing commitment to doing right by its clients. Despite suffering losses and vanishing liquidity in the institutional hedging market, OANDA remained true to its 14-year legacy of transparency, integrity and fairness to our clients. OANDA did not re-quote or amend any CHF cross client trades. We even took the further step of forgiving all negative client balances that were caused when clients could not close out their positions fast enough (where permitted by regulations).

How exactly does this work? Clients suffered losses because they couldn't unwind short CHF positions due to illiquidity or being caught off guard, and Oanda is going to make them whole? Did Oanda have a net long CHF position that they never hedged that allows them to do this?

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