The client of the broker “company” that is certified by the Euro Trade Commission sent a complaint:
The owner used account No. 934984 for trading in the Forex market and the US stock market. According to the client, before the incident 3 positions were opened 125669120, 125660820, 125670106, for the following instruments: EURUSD and shares of TSLA.
Before the incident:
- the sum of long positions on the EURUSD quote was equal to – 131000,
- the sum of short positions on the EURUSD quote was equal to – 200500
- the total short position for TSLA shares was 135,000.
- This situation with the company’s customer account occurred on 04.02.2020 at 16:35 (according to the server provided by the broker).
Explanation: On Tuesday evening, when the US trading session opened and there was a significant increase in the shares of Tesla Motors (hereinafter TSLA). All 4 positions of the client were closed by the broker by stop-out, due to a deficit of margin. The client received a stop-out loss of $ 7,800.15.
In the explanation, it is also said that TSLA shares went up only on the trading terminal of this broker and it was not provided any confirmations except screenshots from the terminal. The client demands to solve this situation in his favor by compensating losses on the TSLA position closed by stop-out, in the amount of $ 7,800.15. This information is to be checked by the Euro Trade Commission and to make decisions based on data obtained from open sources.
Representatives of the broker gave the following answer: the client has no reason to complain because all transactions were closed correctly and at the actual price at the time of closing. In order to document all this, the broker company sent a report on the client’s positions in accordance with internal rules. Digital data were also provided from the server’s log for 2 trading days, of this client and a tick-off journal of TSLA quotes for two days.
The following is the content of the letter sent to the broker and client:
|Claim № *****||*****|
|Date of Claim||Date of Reception of Claim by the Commission|
|Reply on the claim of||05.04.2020|
Settlement of the claim was announced on the basis of data received from both parties by e-mail.
For an impartial settlement of the claim, employees of the Euro Trade Commission reviewed the evidence received from both parties that were sent by the parties and based on these documents concluded:
- Trading stocks of US market is accompanied by high risks, since the opening price of the trading session today may differ significantly from the closing price of yesterday. This situation greatly affects the value of assets and causes a gap in price. This fact should be taken into account and acknowledged by the client when trading in this market.
- By opening an account with a broker, the client agreed to the rules set forth in the “Terms and conditions” tab, which in turn is located on the broker’s website. These rules say that the client’s spread is floating and the stop out level is 20%.
- By requesting TSLA stock quote data from the provider of this broker, the commission concluded that the quotes were correct and were at the level of 882.95 / 883.95 at the time of closing the stop-out position. From the report of the liquidity provider, it turned out that the quotes were also at the level of 882.95 / 883.95 and are reliable. The profit that the broker received from this difference is 100 points (pips).
- For an impartial conclusion, it was necessary to request data on the value of TSLA shares from other liquidity providers that would not intersect with this broker and its supplier. When comparing quotes from third-party suppliers and a broker, it turns out that the quotes are identical for 2 days as set out in the broker’s tick report. Accordingly, employees of the Euro Trade Commission considered the market value of TSLa shares normal.
- Based on the server entries sent by the broker, it is clear that the margin in the client’s account, after the opening of the American trading session, fell below the level of 20% set by the contract. Due to insufficient money in the account, the client’s positions were closed automatically based on market prices.
- Based on all the above items, Euro Trade Commission employees came to the conclusion that the broker fulfilled all the obligations under the contract concluded with the client.
Based on all the above items, Euro Trade Commission employees came to the conclusion that the broker fulfilled all the obligations under the contract concluded with the client.
In this regard, Euro Trade Commission employees decided not to reimburse the client for the requested loss of $ 7,800.15.