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FXCM's CFTC Financial Data

  • #1
  • First Post: Feb 14, 2007 10:06pm Feb 14, 2007 10:06pm
http://www.cftc.gov/files/tm/fcm/tmfcmdata0612.pdf

What does this financial data mean? Why is FXCM's capital so much lower compared to other forex brokers? Should I be worried? They are switching me to their new non dealing desk platform next week...
  • #2
  • Feb 14, 2007 11:06pm Feb 14, 2007 11:06pm
Non Deal Desk (NDD for short)?

Either you are scalping or newstrading as reason for the move.
This so called NDD is not as "good" as you think of it. Of course I saw it once that USDJPY was just 2 pips spread; I went USDJPY long - GREAT 2 pips cost only. When I tried to close it several days later, its has widen to 5 pips.. I waited and waited and price moved down.. I should have closed it when it was 5 pips spread huh?

It suck. NDD may give you "smaller spread" at particular time, but in all honesty, you still dont get what you want.... Fast Execution? THats a big laugh... I kept getting requoted requoted requoted... so much for fast execution. more like fast requotes.

And FXCM dont honor Limits anymore too.. Price went up fast pass my Limit and it was not closed... FXCM waited for price to hit my (trailing) STOP instead...

Last straw: have you seen the UK data last week? It spiked down on all the other brokers I know, but at FXCM, it spiked 20 pips up instead... Caught a lot of straddlers for a HUGE KILL. (I did not straddle at FXCM at that time though).

Thereafter, I closed my FXCM account for good. I wont use it for anything else other than retrieving past charts...

Their Capitalization has been very low ever since.. Its only 100K last time I checked way back mid 2006 and has been like that for the whole part of 2006. But in fairness, FXCM has one of the largest share of "retail traders" in the market all thanks to their very aggressive advertisements at Bloomberg TV.
  • #3
  • Feb 15, 2007 1:26pm Feb 15, 2007 1:26pm
WOW, what happen to oanda they or droping like hotcakes, from 31mill to 11mill, i guess those high spreads during news got traders running for the border.
If I Go Broke Trying Then I Will die happy.
  • #4
  • Feb 15, 2007 4:42pm Feb 15, 2007 4:42pm
you're looking at the wrong numbers for FXCM...the full name of the market making company is Forex Capital Markets.
  • #5
  • Feb 15, 2007 5:27pm Feb 15, 2007 5:27pm
Quoting nitman
http://www.cftc.gov/files/tm/fcm/tmfcmdata0612.pdf

What does this financial data mean? Why is FXCM's capital so much lower compared to other forex brokers? Should I be worried? They are switching me to their new non dealing desk platform next week...
Hi nitman!

I got the same email and contacted FXCM sales last night via their live chat. The reason they gave me for switching my account was "we are switching all our clients accounts to this enhanced, upgraded and superior service." Yet they couldn't give me answers to average spread during high volatility, couldn't give me answers to questions on slippage other than "its part of professional financial trading." OK to make a long story longer....I was told that I could keep the fixed spread/slippage guarantee account by sending an email to [email protected]. I'm demoing the NDD (but think I'd use Oanda for that option b/c they can provide info on spreads and allow you to specify acceptable ranges for entry).
  • #6
  • Feb 15, 2007 7:28pm Feb 15, 2007 7:28pm
Quoting Moe
WOW, what happen to oanda they or droping like hotcakes, from 31mill to 11mill, i guess those high spreads during news got traders running for the border.
Thats a massive drop and points to a flight of customers. Probably oanda would have been better off not raising the spreads in the first place.
  • #7
  • Feb 15, 2007 9:55pm Feb 15, 2007 9:55pm
I also got that email about switching to NDD. However when i emailed them back saying i dont want to move to NDD because of all the bad stuff i have heard, they quited down. Still no email reply . I guess that gesture says everything about their new NDD platform. I think i will just close my account with them. I cant trust them anymore.

d3
  • #8
  • Feb 16, 2007 8:35am Feb 16, 2007 8:35am
Quoting PipStar
WOW, what happen to oanda they or droping like hotcakes, from 31mill to 11mill, i guess those high spreads during news got traders running for the border.
Just to clear things up, Michael Stumm (OANDA's CEO) posted a response to this issue on our site which is below.

Quote:
This is a very important topic, so I thought I should respond before too many draw the wrong conclusions. What makes it difficult is that I don't really have much more to add that what was stated previously. But please allow me to reiterate anyways:

OANDA has been operating with profits for each and every month of 2006 as well as January of 2007. The capital on our balance sheet has been increasing correspondingly. OANDA has experienced strong growth in 2006 regardless of which metric you apply, including number of clients, client deposits, transaction volume, revenue and earnings. In fact, 2006 was a spectacular year for OANDA from an earnings point of view. The bottom line: operating funds are definitely not part of the equation.

OANDA's net capital as posted on the CFTC Web site has however gone down, as many here have observed. This is entirely due to various haircuts and charges that the CFTC and NFA rules require us to deduct from our capital. The various rules that apply are a bit convoluted, but the specific rule that is primarily responsible for the drop in OANDA's net capital is the required "concentration charge", which requires us to deduct 6% or 20% (depending on the currency pair) of the value of the position of some of our clients. While the concentration charge rule was introduced a while ago, the NFA only recently clarified how it was to be interpreted. This was brought up late 2006 when the NFA conducted their audit on site (as they do once a year). I can only speculate why some other firms have not had similar swings in their posted net capital numbers: either they are not applying the newer interpretation, or they do not have clients that enter into very large positions.

Unfortunately --- and I can fully understand why --- this leads to a lot of incorrect speculation. Knockout, I wish our minimal capital requirements were as low as you presume they are; unfortunately, they are much higher, and have only been increasing.

End Quote.
Andres OANDA Corporation
  • #9
  • Feb 18, 2007 9:45am Feb 18, 2007 9:45am
the instant I received the email about moving my FXCM acct to NDD, I replied that I didn't want to change.

they sent back what seemed like an automated reply saying that they wouldn't move me, but that they could change me later on at what seemed like their will. like someone above said, I'm moving my money to another broker asap. just trying to narrow one down.
  • #10
  • Feb 22, 2007 11:39am Feb 22, 2007 11:39am
Hi All,

Today, Feb 22 2007....I closed my account with FXCM....after 2 years. And only one of those weeks was with the NDD. In fact it lasted 4 days!!

Spreads on EUR/USD still 3...sometimes 4.....maybe it blipped to 2 just as a B/A was changing....give it 1 second !! Cable was 4 mostly, I don't recall a 3 that I saw.....USD/CHF was pretty much always 3, down from 5...and $/JPY floated 2-3, mostly 3 though.

My reason for leaving.....I know the LIQUIDITY is not there. I don't trade news, but I will stick my nose in after 15 minutes or so after market has taken a stance, and I kept getting a window that said price no longer at your requested "something-or-other"..... (market order) and for the first time in 2 years...I was beginning to get slippage, and we have not had any big Market making news this week.....so I saw the writing on the wall.

TRUE, Forex Capital Markets is Mother Company to FXCM LLC, I think, yet would they bail out FXCM??????? All my withdrawls and deposits went to FXCM LLC, I had not know about FC Markets til just this morning. They are seperate enities.

I have no regrets, I think the Customer Service was great !! And I do tend to scalp.....But I was looking before this, I want better spreads. I will miss the FXTrade Station Platform.....it gets no simpler than that!!

Take Care all
Proper Prior Planning Prevents Piss Poor Performance
  • #11
  • Feb 22, 2007 2:59pm Feb 22, 2007 2:59pm
I used to stick up for FXCM all the time, but I'm done. I've only used my live account during the last several months with mini lots to experiment with new ideas. They have never attempted to switch me to the NDD, but both platforms pretty much suck for execution..........even when I demoed NDD!! And as previously pointed out, they will insist the price moved on a market order and deny the fill long after the market has dealt with the news, or even when there is no news at all!

It provides no comfort for those trying to intraday trade an appropriate pair for the session you prefer to trade (IE GBP/USD in the NY session).

I'm OK with FX solutions, but have been investigating Gain Capital/TradeStation......any thoughts based on recent experience?
  • #12
  • Feb 22, 2007 11:48pm Feb 22, 2007 11:48pm
Quoting learningtheropes
I used to stick up for FXCM all the time, but I'm done. I've only used my live account during the last several months with mini lots to experiment with new ideas. They have never attempted to switch me to the NDD, but both platforms pretty much suck for execution..........even when I demoed NDD!! And as previously pointed out, they will insist the price moved on a market order and deny the fill long after the market has dealt with the news, or even when there is no news at all!

It provides no comfort for those trying to intraday trade an appropriate pair for the session you prefer to trade (IE GBP/USD in the NY session).

I'm OK with FX solutions, but have been investigating Gain Capital/TradeStation......any thoughts based on recent experience?

Spreads are very important to me, FXSOL and GAIN have same spreads as FXCM. Like you, I stuck up for FXCM....They are not a bad MM, I was with them for 2 years....But I want better spreads and no pop ups when I hit a market order, and the price hasn't moved on the Tade Station window.
I have been doing a demo this week with MB Trading, very suprised ! They have a commision....which concerned me at first....yet when I do the math...The EUR/USD is 1.5 pips, usd/chf = 2, usd/jpy = 1.8 , aud/usd = 2.7
nzd/usd = 2.7, usd/cad = 1.8/2.0, nzd/jpy 2-3 pips plus $7 R/T for a full lot...even the gbp/chf is 4 pips plus about $20 R/T.....etc
On a full lot gbp/jpy R/T = $21.89 compared to FXCM NDD at $58.10 (avg.)
Very easy platform to learn.....similar layout to Currenex IMO.
Though I am concerned with size of company and all, no charting package, no bennies for a larger account ( such as free wires ) Though I noticed that the price is very close or the same (ask) as on FXDD's demo charts....jury still out.

RJ O'Brien is another I am looking at, as well as Rosenthal-Collins Group...These are regulated futures brokers, which are branching out in spot FX I have learned. $$ still not segragated, yet from what I have read, they have reputations to protect.

FIMAT is another worth looking into I think. Now that I am broker-less, I have time on my hands to really search. Maybe Oanda also.

Hope this helps....it has been a long time since I have gone shopping for a broker.

Anybody know if MBTrading is associated with MBF Clearing Corp? THX
Proper Prior Planning Prevents Piss Poor Performance
  • #13
  • Mar 7, 2007 11:43am Mar 7, 2007 11:43am
Quoting nitman
http://www.cftc.gov/files/tm/fcm/tmfcmdata0612.pdf

What does this financial data mean? Why is FXCM's capital so much lower compared to other forex brokers? Should I be worried? They are switching me to their new non dealing desk platform next week...
Official letter from Forex Capital Markets, LLC


Although it is our policy not to interact on message boards we have noticed there are clearly incorrect statements being made about Forex Capital Markets, LLC’s regulatory status and financial condition. Since regulatory status and financial requirements are not a matter of opinion, but rather fact, we want to make sure these concerns are correctly addressed.

1) Forex Capital Markets, LLC is well capitalized and exceeds all financial requirements.

a. According to the most recent CFTC published reports dated as of December 31, 2006, Forex Capital Markets, LLC has $27,398,735 in Adjusted Net Capital and $19,402,505 in Excess Net Capital. This information can be confirmed by accessing the CFTC.gov’s website: http://www.cftc.gov/files/tm/fcm/tmfcmdata0612.xls
b. Forex Capital Markets, LLC currently exceeds CFTC’s minimum financial requirements by nearly two and a half times providing traders with the security in knowing that Forex Capital Markets is well capitalized.

2) Clients who open an account with Forex Capital Markets, LLC (also known as “FXCM”) US entity are opening accounts with Forex Capital Markets, LLC and NOT FXCM LLC.

a. Traders can confirm this by checking Forex Capital Markets, LLC’s Trading Application at the following link: http://www.fxcm.com/docs_pdfs/trading_agreement.pdf
b. Traders can also confirm that all funds for deposit are instructed to me made to the beneficiary “Forex Capital Markets, LLC” as can be seen on FXCM’s website: http://www.fxcm.com/depositing-bank-wire.jsp

3) FXCM LLC does NOT own nor is it a subsidiary of Forex Capital Markets, LLC.

a. Rather FXCM LLC is simply a sister entity to Forex Capital Markets, LLC and registered as a Futures Commission Merchant with the National Futures Association (NFA) to potentially offer futures dealing to its clients.
b. FXCM LLC is not currently engaged in any business activity and does not have any clients. Traders CANNOT apply for an account with FXCM LLC.
c. Traders can contact the NFA to confirm that FXCM LLC does not currently conduct any business nor does it have any clients.

Should you have any concerns about FXCM’s regulatory status, financial stability or anything else please feel free to contact FXCM’s Customer Service representatives 24 hours a day 7 days a week at 888-50-FOREX, internationally at 212 897-7660, via LivePerson Chat from our website www.fxcm.com or via email at [color=#0000ff][email protected][/color]

Sincerely,

Forex Capital Markets, LLC
  • #14
  • Mar 7, 2007 12:21pm Mar 7, 2007 12:21pm
FXCM Rep,

Wow, kudos for even showing up, man...Honestly, I wish more brokers would interact "officially" with statements like this on messageboards like this.

All,

In light of recent events concerning Oanda and now, this thread...it really makes you sit back and wonder just who can survive in this environment.

I'm not sure any broker is immune from nomadic clientel.
  • #15
  • Mar 7, 2007 3:56pm Mar 7, 2007 3:56pm
Quoting FXCM Rep
Official letter from Forex Capital Markets, LLC


Although it is our policy not to interact on message boards we have noticed there are clearly incorrect statements being made about Forex Capital Markets, LLC’s regulatory status and financial condition. Since regulatory status and financial requirements are not a matter of opinion, but rather fact, we want to make sure these concerns are correctly addressed.
Honestly, FXCM just gained a little more credibility in my mind. Thanks for the update.
  • #16
  • Mar 8, 2007 5:36am Mar 8, 2007 5:36am
Quoting FXCM Rep
Official letter from Forex Capital Markets, LLC


Although it is our policy not to interact on message boards we have noticed there are clearly incorrect statements being made about Forex Capital Markets, LLC’s regulatory status and financial condition. Since regulatory status and financial requirements are not a matter of opinion, but rather fact, we want to make sure these concerns are correctly addressed.

1) Forex Capital Markets, LLC is well capitalized and exceeds all financial requirements.

a. According to the most recent CFTC published reports dated as of December 31, 2006, Forex Capital Markets, LLC has $27,398,735 in Adjusted Net Capital and $19,402,505 in Excess Net Capital. This information can be confirmed by accessing the CFTC.gov’s website: http://www.cftc.gov/files/tm/fcm/tmfcmdata0612.xls
b. Forex Capital Markets, LLC currently exceeds CFTC’s minimum financial requirements by nearly two and a half times providing traders with the security in knowing that Forex Capital Markets is well capitalized.

2) Clients who open an account with Forex Capital Markets, LLC (also known as “FXCM”) US entity are opening accounts with Forex Capital Markets, LLC and NOT FXCM LLC.

a. Traders can confirm this by checking Forex Capital Markets, LLC’s Trading Application at the following link: http://www.fxcm.com/docs_pdfs/trading_agreement.pdf
b. Traders can also confirm that all funds for deposit are instructed to me made to the beneficiary “Forex Capital Markets, LLC” as can be seen on FXCM’s website: http://www.fxcm.com/depositing-bank-wire.jsp

3) FXCM LLC does NOT own nor is it a subsidiary of Forex Capital Markets, LLC.

a. Rather FXCM LLC is simply a sister entity to Forex Capital Markets, LLC and registered as a Futures Commission Merchant with the National Futures Association (NFA) to potentially offer futures dealing to its clients.
b. FXCM LLC is not currently engaged in any business activity and does not have any clients. Traders CANNOT apply for an account with FXCM LLC.
c. Traders can contact the NFA to confirm that FXCM LLC does not currently conduct any business nor does it have any clients.


Should you have any concerns about FXCM’s regulatory status, financial stability or anything else please feel free to contact FXCM’s Customer Service representatives 24 hours a day 7 days a week at 888-50-FOREX, internationally at 212 897-7660, via LivePerson Chat from our website www.fxcm.com or via email at [color=#0000ff][email protected][/color]

Sincerely,

Forex Capital Markets, LLC

Confused....which is it?? Does FXCM (a) potentially offer dealings to "clients" or as in (c) does not conduct any business NOR have "clients" Thanks
Proper Prior Planning Prevents Piss Poor Performance
  • #17
  • Mar 9, 2007 7:51am Mar 9, 2007 7:51am
Quoting FxJarhead
Confused....which is it?? Does FXCM (a) potentially offer dealings to "clients" or as in (c) does not conduct any business NOR have "clients" Thanks

FXCM LLC is registered as a Futures Commission Merchant with the National Futures Association (NFA) to potentially offer futures dealing to traders, i.e. Futures Contracts.

FXCM LLC is not currently engaged in any business activity and does not have any clients. Traders CANNOT apply for an account with FXCM LLC.

Traders can contact the NFA to confirm that FXCM LLC does not currently conduct any business nor does it have any clients.

Should you have any concerns about FXCM’s regulatory status, financial stability or anything else please feel free to contact FXCM’s Customer Service representatives 24 hours a day 7 days a week.

Sincerely,

Forex Capital Markets, LLC
  • #18
  • Mar 11, 2007 12:43am Mar 11, 2007 12:43am
Here's A better Answer.

http://www.fxcm.com/news-release.jsp
If I Go Broke Trying Then I Will die happy.
  • #19
  • Last Post: Mar 11, 2007 4:15am Mar 11, 2007 4:15am
check out oanda and fxcm/forex capital market.

http://www.cftc.gov/files/tm/fcm/tmfcmdata0701.pdf
If I Go Broke Trying Then I Will die happy.
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