Complaint Matter

Mr. XXX has lodged his complaint with the Financial Commission on the following grounds:

The Client used account # 7241004 for active trading in the Forex market. According to the Client, one pending If Done Sell Stop order with the following parameters was set on the specified account before the incident (server time):

Ticket                            Open                       Type      Vol     Item          Price           S / L          T / P

32674152        2019.04.26 11:15:00          sell         1.73    eurusd    1.11240       1.1174      1.08240

The incident on the Client’s account occurred on Apr 26, 2019, at 15:30 (server time). During the incident, there was a scheduled release of the statistical report on the US Advanced GDP (q/q). The Clients claims that immediately after the news was published, he made 5 attempts to delete the pending order; however, the order wasn’t deleted because it had been already executed at a price 1.11146 that is almost 100 micro pips (0.00100) below the activation price set in the order. Due to this reason, the trailing stop attached to the disputed Sell Stop order wasn’t activated, the market changed its direction and, as a result, the Client’s Short position was closed by the Broker at Stop Loss. The amount of loss incurred by the incident totaled 926.57 EUR:

Ticket                 Open                        Type     Vol        Item      Price      S / L      T / P

32674152 2019.04.26 11:15:00       sell       1.73      eurusd   1.11146  1.1174  1.11141

         Close                       Price        Swap    Profit

2019.04.26 17:40:35    1.1174    -6.92     -919.65

The Client claims that his pending If Done Sell Stop order was not executed by the Broker correctly since it should be deleted and not activated or activated at the price the Client set in the order. As such, the Client believes that a fair resolution of the case would be a full compensation of losses incurred by the Broker. The Client provided the screenshots with the trading terminal log records taken from his PC, as documental evidence.

In turn, the Broker does not see any grounds for the Client’s complaint, since in their opinion all Client’s positions were closed correctly, at real market prices and in accordance with the provisions of the regulatory documents. The Broker provided the investigation with the trading history of the Client, the server log records, as well as the history of tick data on the financial instrument EURUSD, as documental evidence.

Complainant Broker
XXX YYY
Financial Commission Complaint #ZZZ
Complaint Raising Date Complaint Filing Date
26/04/2019 30/05/2019
Complaint response:

The decision on this complaint is based on the information provided by the brokerage company YYY and Mr. XXX.

After a comprehensive analysis of the documentary evidence provided by the Client and the Broker the Dispute Resolution Committee of the Financial Commission has come to the following conclusions:

1. First of all, it should be noted that during the release of important economic news, such as US GDP   and many others, the market very often experiences a significant decrease in liquidity combined with a significant increase in volatility. In turn, this circumstance radically changes the flow of quotations, leading to a dramatic expansion of spreads and generating price gaps. The Client should be aware that trading in such market conditions is accompanied by significant risks.

2. Secondly, it should also be noted that a Stop order, which also includes a Buy Stop/Sell Stop order, does not guarantee the execution of the client’s orders precisely at the price specified therein. Depending on the market situation such orders can be executed either precisely at the price specified in them, or at the price worse than specified. The pending Stop order becomes active, as soon as at least one quotation in the stream of the prices quoted by the broker reaches the value of the price specified by the client.

If reveal in detail the logic of execution of a Stop order in the real market, then it will look like as follows: at the time when the market reaches the price specified in the client’s pending order, the system submits a Market order at any price available in the market (within the Depth of the Market) for the specified volume. Execution of the order, in this case, occurs according to the queue of current positions on the broker’s trading server.

3. According to the information provided by the Broker (the history of ticks on the financial instrument EURUSD and the server log records), the disputed If Done Sell Stop order # 32674152 was activated at 15:30:01.645 (server time) after the price gap and then executed at available market price:

2019.04.26 15:30:01.095;1.11335;1.11369;

2019.04.26 15:30:01.555;1.11335;1.11354;

2019.04.26 15:30:01.645;1.11211;1.11260; order was activated 

2019.04.26 15:30:01.805;1.11198;1.11220;  

2019.04.26 15:30:01.865;1.11203;1.11229;

2019.04.26 15:30:01.975;1.11200;1.11226;

2019.04.26 15:30:02.095;1.11198;1.11216;

2019.04.26 15:30:02.195;1.11198;1.11219;

2019.04.26 15:30:02.305;1.11176;1.11201;

2019.04.26 15:30:02.415;1.11160;1.11191;

2019.04.26 15:30:02.505;1.11160;1.11187;

2019.04.26 15:30:02.615;1.11146;1.11176; order was executed

On the other hand, the first attempt to delete the disputed If Done Sell Stop order # 32674152 was made by the Client at 15:30:01.722 (Server time):

2019.04.26 11:15:00.254 195.201.246.109 ‘7241004’: order sell stop 1.73 EURUSD at 1.11240 sl: 1.11740 tp: 1.08240 exp: never

2019.04.26 11:15:00.256 195.201.246.109 ‘7241004’: order #32674152, sell stop 1.73 EURUSD at 1.11240

2019.04.26 15:30:01.722 195.201.246.109 ‘7241004’: delete order #32674152, sell stop 1.73 EURUSD at 1.11240

As such, the Client’s multiple requests to cancel the disputed If Done Sell Stop order # 32674152 were not executed due to the fact that they were received after the order # 32674152 had been accepted for processing. This aspect is specified in clause 7.4 of the Client Agreement:

7.4 Just when an order leaves a queue for executing, the Client is acknowledged by the message from server “Order is in process”. The client cannot cancel the order in case it has been accepted for execution.

4. To ensure an objective investigation of the case the DRC requested historical price data on the financial instrument in the disputed transaction from other independent providers of financial services. Comparison of Broker quotes provided to the Client with quotes from independent sources confirmed the fact that the quotes published by the Broker at the time of the incident reflected the actual situation on the market. As such, taking into account abnormal market conditions in the period of the incident, the experts of the DRC have found the execution of the disputed transaction as correct and legitimate since the quotes of the financial instrument EURUSD published by the Broker in the period of the incident were consistent with acceptable market prices.

Summarizing all the above the Dispute Resolution Committee has made a decision in favor of the Broker since the Broker acted in full compliance with the provisions of the regulatory documents and the rules accepted in the Company. Accordingly, the claim of the Client for compensation of losses in the amount of 926.57 EUR was found by the members of the Committee as having no grounds.

This complaint was reviewed by the members of the Dispute Resolution Committee of the Financial Commission and was processed by the Head of the Committee.

Ruled in Favor Compensation
Broker None
If you have any questions regarding this investigation, please send them to the following address info@financialcommission.org
Acknowledgement
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.
Signature Designation Date
 Anatoly Bulanov

Head of DRC

20/05/2019