In the last 10 years has anything like this happened before, 20 years, 30 years? it's nuts. The most liquid market in the world, $5.3 trillion a day and liquidity 'disappears'.
I remember reading on IB reports that they had a section in their balance sheet for money owed by customers that they are going after. They might get some of this money back. Does anyone know what is their T&C on this?
legally they can get it back. in practice they won't get it back. at least not from the small retail guys.
All it means is that in a fast market the banks are not quoting, so nobody to take the other side. The banks are not obliged to make a market, as they are not market makers like we have on the exchanges. I have the FXCM feed via Sierra Charts. The USD.CHF 04.30 bar (10 minute) had a high of 1.0220 and closed at 0.9859. The next bar was the 05.10 bar. In that gap there were no quotes. I checked my Oanda feed also and there is a gap from 04.40 to 05.50 for USD.CHF; I suspect it would be the same for the other brokers.
FXCM is back up to nearly $5 on news of a bailout / capital infusion from LUK. Looking like it might be a buy - they might deserve to lose 1/3 their market cap if that's how much they lost, but they're down by 2/3 even now in the after hours once the news came. Leucadia National Corporation ( LUK ) and FXCM announce $300 mln financing to permit FXCM to continue normal operations (shares halted) (FXCM ) : Leucadia National Corporation ( LUK ) and the co announced that Leucadia would be providing $300 mln in cash to FXCM and its subsidiaries that will permit FXCM to meet its regulatory-capital requirements and continue normal operations after yesterday's loss of $225 mln due to the unprecedented actions of the Swiss National Bank. Under the terms of the agreements , Leucadia is investing $300 mln in cash into FXCM in the form of a $300 mln senior secured term loan with a two-year maturity and an initial coupon of 10%. The term loan obligations are guaranteed, on a secured basis, by certain of FXCM's domestic subsidiaries. In addition, Leucadia will receive, in the event of a sale of FXCM or its subsidiaries, a certain percentage of the sale proceeds and, in the event FXCM makes other distributions on account of its equity, a corresponding payment for its own account.
good to see fxcm has been saved! btw, could you trade FXCM? I wanted to, was the stock was halted. if yes, what broker could you do that?
I was able to buy some in the after hours. It was halted during the day, but that was lifted around 4:30pm. http://www.nasdaqtrader.com/Trader.aspx?id=Tradehalts