The client led simultaneous trading on three micro accounts: #XXXXX, #YYYYY and #ZZZZZ.
On each of these accounts were opened several short positions in GBPUSD. In accordance with the terms of trade established by the broker for micro accounts a client can choose the leverage from 1:1 to 500:1, but the account balance should not exceed the amount of $3000. Furthermore, in case of the account balance exceeds $3000, the leverage is being automatically reduced by 100 times.
The dispute occurred on February 14,2014 after the emergence of the free margin deficit caused by an adverse movement in price of GBPUSD. The client decided to add some money to the account in order to prevent positions liquidation (Stop Out), hoping for a favorable price movement in the near future. The client informed the broker (online support representative) about the fact and asked him to keep his account leverage ratio unchanged (500:1) because after adding money to his account the balance exceeded the limit of $3000. In response to the customer`s request the broker recommended him to reduce the balance by withdrawing a part of funds from his account. The client submitted a request to withdraw the funds but ultimately, his losing positions were closed on stop out.
The customer is not satisfied with the brokerage company actions, because he believes that misleading terms of trade established by the broker for micro account led to his losses.
|Financial Commission Complaint Response|
|Financial Commission Complaint||#XX|
|Complaint Raising Date||Complaint Filing Date|
CLIENT has lodged his complaint with Financial Commission because of the following:
Simultaneous trading was conducted by the client on three micro accounts: #XXXXX, #YYYYY and #ZZZZZ.
Several short positions in GBPUSD were opened on each account with different time intervals. Later on, due to margin deficit caused by an adverse movement in exchange rate of GBPUSD all losing positions were liquidated by the broker (Stop Out operation).
The client is not satisfied with the broker actions, and believes that “misleading terms of trade” established for micro account were the main reason of his losses. According to the client, he had no choice to save his account under such trading rules. In connection with the above, the client believes that a fair resolution of his complaint would be to require the broker to compensate his losses (about $ 7500) caused by the forced liquidation of his positions on three accounts.
Decision on this complaint is based on the information provided by BROKER and CLIENT.
In accordance with the terms of trade established by the broker for micro accounts, any client can choose the leverage from 1:1 to 500:1, but the account balance should not exceed the amount of $3000. Furthermore, in case of the account balance exceeds $3000, the maximum leverage is reduced automatically 100x (leverage ratio can vary from 1:1 to 5:1). The Stop Out level is also clearly stated on the broker`s web site (20%). The company shows all trading terms in “Terms of Trade” section on its website. Also, trading terms are communicated to the client upon account registration. By accepting these trading terms the client confirms his understanding of the margin requirements and changes in margin requirements based on trading account balance as well.
Summarizing all above, it is obvious that the broker has provided the customer with acceptable conditions for trading, despite the fact that these conditions were not the best in terms of the customer. Thus, the DRC sees no violations of the trading terms and does not find any ground for raising claims against the broker.
This complaint was considered by the members of the Dispute Resolution Committee of the Financial Commission and framed by the head of the committee Anatoly Bulanov.
|Ruling in favor||Compensation|
|If you have any questions regarding this investigation, please send them to the following address [email protected]|
|I certify that all information was considered by the Dispute Resolution Committee of the Financial Commission and hereby confirm that the decision was made fairly, impartially and without interference. I am confident that the information provided in the document is true.|
Head of DRC