interestrateripoff Posted March 19, 2015 Share Posted March 19, 2015 http://www.independent.co.uk/news/business/analysis-and-features/how-could-a-teacher-on-18000pa-lose-280000-spread-betting-10115157.html “I had no control. I was panicking.” For Marcel Zidani, a concert pianist and part-time currency trader, 15 January will live long in the memory for all the wrong reasons. Mr Zidani was one of the hundreds of customers of the spread-betting giant IG Group holding big bets against the Swiss franc. Those bets went cataclysmically wrong in January when the Swiss National Bank scrapped its €1.20 ceiling against the euro, introduced in September 2011 to stop the “Swissie” surging in value. But two days after the SNB described the ceiling as a “cornerstone” of its monetary policy, it abolished it. That sent the franc’s value surging, currency brokerages collapsing and hundreds of people like Mr Zidani staring at huge losses for betting the wrong way. The pianist – whose £2 exposure turned into a £5,500 loss – recalls the moment well. Slumped in a chair in his living room in Evesham in the West Midlands, he stared at the numbers on his phone in disbelief. “I looked at the phone and I remember having to sit down because the numbers were going red – £1,000, £3,000. I was trying to press ‘stop’ on the phone and it was just an ‘Oh my god’ moment. I said to my wife, ‘It’s now £3,000, it’s £7,000, it’s £6,000’. It was just up and down. I rang them and I said ‘I can’t pay this’. They said it will stop wherever it stops. I had no control. I was panicking.” Over in Tipperary in Ireland, there were IG customers with even bigger headaches. Tomas O’Comartuin, a supply teacher who earns just €25,000 (£17,800) a year after tax, was taking a class when his phone bleeped with a text saying the SNB had scrapped the cap. Mr O’Comartuin – who asked to be identified only by his Gaelic name – had an even heftier position and suddenly faced a loss of nearly £280,000. He said: “I got a text message. I was talking at the front of class, gave the children some work to do. Then I got the text, and went to look at one of the computers at the back of the classroom. My first reaction was that there had been some kind of computer glitch. The children were working away, my heart rate was going at 200 beats a minute.” He doesn’t own a house and he has no hope of paying. O dear people not understanding risk. Still at least it can all be made good with a bit of printing. Quote Link to comment Share on other sites More sharing options...
porca misèria Posted March 19, 2015 Share Posted March 19, 2015 That teacher seems to have figured out debt. Heads he wins, tails his creditors lose. If he'd owned substantial assets (like a house) it would've been a different story. But with nothing to lose it's a one-way bet. Quote Link to comment Share on other sites More sharing options...
thewig Posted March 19, 2015 Share Posted March 19, 2015 Is this why they don't teach personal finance in schools? Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted March 19, 2015 Share Posted March 19, 2015 My mate lost money down the bookies. That's life. The bookie/house always win. Quote Link to comment Share on other sites More sharing options...
spyguy Posted March 19, 2015 Share Posted March 19, 2015 Oh, I know this - leverage, greed + stupidity. There's a large number of teachers that are going to lose outwith BTL - and not just obvious the fat fcker. The number of teachers I know - only a handful, thankfully - who have devised and executing a property 'get-rich-quick' scheme invovling property is astounding. Quote Link to comment Share on other sites More sharing options...
Errol Posted March 19, 2015 Share Posted March 19, 2015 They can still pay whatever they owe. I'm sure some kind of life-time payment schedule can be drawn up. Quote Link to comment Share on other sites More sharing options...
zugzwang Posted March 19, 2015 Share Posted March 19, 2015 Noise traders. Quote Link to comment Share on other sites More sharing options...
goldbug9999 Posted March 19, 2015 Share Posted March 19, 2015 " holding big bets against the Swiss franc" - youve got to be kidding me. Quote Link to comment Share on other sites More sharing options...
royalvictor Posted March 19, 2015 Share Posted March 19, 2015 oh boy - what a part time punter & full time plonker. Retail FX is the biggest scam (still) going. Most retail guys do not have access to real market quotes, at which banks deal. What I don't get is why not trade CME FX futures. Central market place, liquidity and transparency, counterparty to trade is CME Clearing Corp. If the initial margin for a FX pair is too "expensive", well one should not dabble in this market to begin with. The odds are immediately stacked against the spread better. There is no such thing a zero commission. $2 round trip + exchange fees with a discount futures brokerage is cheaper than a "zero commission" FX shops, they are all bucket shops, why do folks not get that? What were the odds again of the Swiss Franc de-pegging? Hmm, We might have another black swan coming along, a Greek one. Quote Link to comment Share on other sites More sharing options...
Quicken Posted March 19, 2015 Share Posted March 19, 2015 Anyone betting on the Danish Krone peg holding? Quote Link to comment Share on other sites More sharing options...
ManVsRecession Posted March 19, 2015 Share Posted March 19, 2015 (edited) Or just open an Interactive Brokers account and trade actual currency. Damn...£280,000. even assuming he got stung for the full 40% drop, he must have been betting at least £70 per PIP. And then going off to teach a class!! edit: OK . I read the article. £100 per pip. plonker. Edited March 19, 2015 by ManVsRecession Quote Link to comment Share on other sites More sharing options...
R K Posted March 19, 2015 Share Posted March 19, 2015 http://www.independent.co.uk/news/business/analysis-and-features/how-could-a-teacher-on-18000pa-lose-280000-spread-betting-10115157.html O dear people not understanding risk. Still at least it can all be made good with a bit of printing. They only bail out bankers bonuses, not private bets. Quote Link to comment Share on other sites More sharing options...
sPinwheel Posted March 19, 2015 Share Posted March 19, 2015 Lend me £280,000 and I'll show you how. Quote Link to comment Share on other sites More sharing options...
R K Posted March 19, 2015 Share Posted March 19, 2015 They can still pay whatever they owe. I'm sure some kind of life-time payment schedule can be drawn up. If he had gold theyd take that off him in a heartbeat unless he committed a criminal offence and denied it. Quote Link to comment Share on other sites More sharing options...
royalvictor Posted March 19, 2015 Share Posted March 19, 2015 funniest thing you know. Had to convert a few Euros into Sterling. "Back in the days" when it was somewhere .8 the figure... Local branch made me a market ripping me off by an equivalent of 6k Sterling, quoting me last week's prices, over 300 points off spot! Well, sod that, changed my money in the wholesale market thanks to fxall. The only teeny tiny bid of sympathy these wallies get is: FX tends to have a low volatility. But always assume a 3 st.dev. move. Irrespective, these are liquid markets at the click of a mouse button. Can't trade properties just like that... Quote Link to comment Share on other sites More sharing options...
BearlyBegun Posted March 19, 2015 Share Posted March 19, 2015 http://www.independent.co.uk/news/business/analysis-and-features/how-could-a-teacher-on-18000pa-lose-280000-spread-betting-10115157.html O dear people not understanding risk. Still at least it can all be made good with a bit of printing. Classic south park Quote Link to comment Share on other sites More sharing options...
pipllman Posted March 19, 2015 Share Posted March 19, 2015 a fair few retail fx providers have written off such debts at no cost beyond their account balance to the 'traders' involved e.g. fxcm January 28, 2015 FXCM to Forgive Majority of Clients Who Incurred Negative BalancesNEW YORK, Jan. 28, 2015 (GLOBE NEWSWIRE) -- FXCM Inc. (NYSE:FXCM), announced today its decision to forgive approximately 90% of its clients who incurred negative balances in certain jurisdictions, on January 15, 2015 as a result of the Swiss National Bank announcement on that date. FXCM will notify the applicable clients and adjust applicable client account statements in the next 24-48 hours. "FXCM worked diligently to reach this decision and we are extremely appreciative of our clients for their patience and loyalty as we worked through this," said Drew Niv, CEO of FXCM. The SNB announcement, extreme price movements and the resulting lack of liquidity were exceptional and unprecedented events causing many market participants to incur trading losses. These events were unforeseen and beyond the control of FXCM. FXCM will also notify certain clients (such as institutional, high net worth, and experienced traders who generally maintain higher account balances) requesting payment of negative balances, pursuant to the terms of the FXCM master trading agreements. This group represents approximately 10% of clients who incurred negative balances which comprises over 60% of the total debit balances owed. Quote Link to comment Share on other sites More sharing options...
200p Posted March 19, 2015 Share Posted March 19, 2015 We've been here before, if I remember, I don't think gambling debts are enforcible. Fool to the bucket shops - they should ask for more margin. Quote Link to comment Share on other sites More sharing options...
renting til I die Posted March 19, 2015 Share Posted March 19, 2015 (edited) Oh, I know this - leverage, greed + stupidity. There's a large number of teachers that are going to lose outwith BTL - and not just obvious the fat fcker. The number of teachers I know - only a handful, thankfully - who have devised and executing a property 'get-rich-quick' scheme invovling property is astounding. Spread betting, a quick lesson in leverage and risk! (I shouldn't be too smug, I learnt about risk the hard way as well!) Or just open an Interactive Brokers account and trade actual currency. Damn...£280,000. even assuming he got stung for the full 40% drop, he must have been betting at least £70 per PIP. And then going off to teach a class!! edit: OK . I read the article. £100 per pip. plonker. All the kids told me it was easy money, init! Edited March 19, 2015 by renting til I die Quote Link to comment Share on other sites More sharing options...
renting til I die Posted March 19, 2015 Share Posted March 19, 2015 Classic south park Seen before, so funny and not far off the truth when it come to spread betting firms! Quote Link to comment Share on other sites More sharing options...
renting til I die Posted March 19, 2015 Share Posted March 19, 2015 a fair few retail fx providers have written off such debts at no cost beyond their account balance to the 'traders' involved e.g. fxcm January 28, 2015FXCM to Forgive Majority of Clients Who Incurred Negative BalancesNEW YORK, Jan. 28, 2015 (GLOBE NEWSWIRE) -- FXCM Inc. (NYSE:FXCM), announced today its decision to forgive approximately 90% of its clients who incurred negative balances in certain jurisdictions, on January 15, 2015 as a result of the Swiss National Bank announcement on that date. FXCM will notify the applicable clients and adjust applicable client account statements in the next 24-48 hours. "FXCM worked diligently to reach this decision and we are extremely appreciative of our clients for their patience and loyalty as we worked through this," said Drew Niv, CEO of FXCM. The SNB announcement, extreme price movements and the resulting lack of liquidity were exceptional and unprecedented events causing many market participants to incur trading losses. These events were unforeseen and beyond the control of FXCM. FXCM will also notify certain clients (such as institutional, high net worth, and experienced traders who generally maintain higher account balances) requesting payment of negative balances, pursuant to the terms of the FXCM master trading agreements. This group represents approximately 10% of clients who incurred negative balances which comprises over 60% of the total debit balances owed. They just want you to keep playing and to take more money off you over a longer period! Quote Link to comment Share on other sites More sharing options...
zugzwang Posted March 19, 2015 Share Posted March 19, 2015 The hidden correlations and recurrencies. I know they're there, they must be there... Quote Link to comment Share on other sites More sharing options...
Mikhail Liebenstein Posted March 19, 2015 Share Posted March 19, 2015 We've been here before, if I remember, I don't think gambling debts are enforcible. Fool to the bucket shops - they should ask for more margin. Read this: https://licensinglaws.wordpress.com/2014/02/10/gambling-debts-enforceability-and-voiding-bets/ Summary, they used to unenforceable, but now they are, unless deemed unfair by the gambling commission. Quote Link to comment Share on other sites More sharing options...
billybong Posted March 19, 2015 Share Posted March 19, 2015 Slowly but surely the squid and its rigged casino sucks the life out of its host. Quote Link to comment Share on other sites More sharing options...
billybong Posted March 19, 2015 Share Posted March 19, 2015 (edited) My first reaction was that there had been some kind of computer glitch Now he knows that the first reaction should be that he's been totally ripped off yet again - small change for the squid but if they were on the losing end of a big trade they would have been bailed out by the taxpayer (the teacher again). Edited March 19, 2015 by billybong Quote Link to comment Share on other sites More sharing options...
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