Post FXCM - News and the Regulatory Landscape

Discussion in 'Wall St. News' started by justrading, Jan 17, 2015.

  1. Maverick74

    Maverick74

    I think a logical move for most bucket shops would be to start introducing variable margin on each pair. It's nonsensical to offer 50 to 1 leverage on the EUR/USD and at the same time offer the same leverage on say USD/HUF. As if they have the same risk. If each of these shops would have different leverage requirements on different pairs depending on risk, a lot of this could be avoided. We saw this happen also with the Rubble. FXCM was offering the same leverage on that as say EUR/GBP. Obviously these pairs have different levels of risk.
     
    #11     Jan 17, 2015
  2. This makes sense given the vastly different daily ranges and the basic issue of currency risk/stability. Too much focus on profit and not enough on risk management it would appear.
     
    #12     Jan 17, 2015
  3. The other issue which the press is not looking at while they highlight FX margins is that even for SF futures, some accounts would have blown out. CME raised margin requirements twice since the SNB announcement, but the original was $2,250 to control a contract of 125,000 Swiss francs. More than enough there to wipe out the unwary.
     
    #13     Jan 17, 2015
  4. What about the other side who made a lot of billions? Anyone know of who benefit the most from this move.
     
    #14     Jan 17, 2015
  5. Great question, but so far nothing I've seen. Apart from those where brokers went bust when accounts blew out, the other counterparties would collect.
     
    #15     Jan 17, 2015
  6. #16     Jan 18, 2015
  7. #17     Jan 18, 2015
  8. #19     Jan 19, 2015
  9. "Citigroup, the world’s biggest currencies dealer, lost more than $150 million at its trading desks, a person with knowledge of the matter said last week. Deutsche Bank lost $150 million and Barclays less than $100 million....."

    Add to this a single hedge fund losing most of $830 million and the tally of the damage is piling up. Still not answered is who were the counterparties who profited.

    http://www.bloomberg.com/news/2015-01-19/bank-losses-from-snb-surprise-seen-mounting.html
     
    #20     Jan 19, 2015