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FXOpen AU Discussion

  • #441
  • Oct 23, 2013 1:59am Oct 23, 2013 1:59am
Thanks Jafar, will open a new account in fxopen AU. I'm really expecting something different from you guys compare to fxopen NZ as you described
  • #442
  • Nov 6, 2013 1:48am Nov 6, 2013 1:48am
HI Jafar, thanks for the openness in this forum, i have just opened an account and its good ecn std but the comm seems a bit steep at 0.5 lot @ usd 5.00 for a USD/JPY, or is this the standard rate, perhaps someone can share on this as well.
Thank you.
  • #443
  • Nov 6, 2013 4:22am Nov 6, 2013 4:22am
Quoting fxtracer
HI Jafar, thanks for the openness in this forum, i have just opened an account and its good ecn std but the comm seems a bit steep at 0.5 lot @ usd 5.00 for a USD/JPY, or is this the standard rate, perhaps someone can share on this as well. Thank you.
Hi FXTracer

You must be on Standard commission which is 5.00 round turn commission which is still competitive especially when you factor in the very tight spread to give your total cost to trade. If you would like to take advantage of our VIP commission which is 3.60 round turn, you only need to increase your account size by either deposits or trading to be upgraded.
  • #444
  • Nov 7, 2013 4:36am Nov 7, 2013 4:36am
Dear FXOjafar,

Can you please answer how customers of your company are protected from bankruptcy. Who is covered clients and what maximum amount will be paid per customer. Thanks in advance.
  • #445
  • Edited 5:59am Nov 10, 2013 5:03am | Edited 5:59am
Quoting FXOjafar
{quote} Hi FXTracer You must be on Standard commission which is 5.00 round turn commission ....
Your commissions are in base currency. Most other brokers use USD to price commissions. This means that anyone who primarily trades pairs with a base currency that has a lower value than US Dollars, such as AUD/USD or has USD as the base currency, like USD/JPY or USD/CHF will definitely be paying substantially less commission with fx open.

However, with some pairs, like EUR/USD and GBP/USD, where the base currency has a higher value than USD, Your commissions become comparable or even dearer than your competitors standard accounts after exchange. I recently got offered $5.50 USD per round turn, standard account, directly from an Aussie ecn. As I trade EUR/USD almost exclusively, I would be saving over $1.00 USD per round turn when compared with your $5.00 base currency deal.

Quoting Max FX
Dear FXOjafar, Can you please answer how customers of your company are protected from bankruptcy. Who is covered clients and what maximum amount will be paid per customer. Thanks in advance.
Great question, We have all read the fx trading risk warning disclaimers that come with all fx accounts but they never mention the risk associated with broker insolvency. It is my understanding that there is no protection. Separate client funds doesn't mean your money is protected. In the event of bankruptcy you will become an unsecured creditor. which usually means after legal expenses and asset hiding etc, you get zip.

This is taken from the ASIC web site

"To successfully trade in FX, you will need to have good knowledge of foreign exchange, leverage, volatility, the conditions of each country whose currency you are trading, and counterparty risk – knowing where your funds will be kept and the risk that an issuer will default on its obligations to clients, including failing to return client money."
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  • #446
  • Nov 11, 2013 3:52am Nov 11, 2013 3:52am
Quoting Max FX
Dear FXOjafar, Can you please answer how customers of your company are protected from bankruptcy. Who is covered clients and what maximum amount will be paid per customer. Thanks in advance.
Hi Max FX

You can read how client money is permitted to be used and what happens to it in case of bankruptcy in Regulatory Guide 212 http://www.asic.gov.au/asic/pdflib.n...-9July2010.pdf
from the ASIC website.

Quoting M.A.C.Doug
{quote} Your commissions are in base currency. Most other brokers use USD to price commissions. This means that anyone who primarily trades pairs with a base currency that has a lower value than US Dollars, such as AUD/USD or has USD as the base currency, like USD/JPY or USD/CHF will definitely be paying substantially less commission with fx open. However, with some pairs, like EUR/USD and GBP/USD, where the base currency has a higher value than USD, Your commissions become comparable or even dearer than your competitors standard accounts after...
On our VIP ECN accounts, you would be getting about $4.80 round turn per lot on EUR/USD. Coupled with our spreads that blow the competition out of the water, you will see that the cost per trade is a lot lower at FXOpen AU. Even on standard accounts, we also come in lower. About $6.60 round turn on a EUR/USD lot where competitors are charging $7 flat. And our spread is still tighter.
  • #447
  • Edited 6:18am Nov 11, 2013 5:39am | Edited 6:18am
Quoting FXOjafar
{quote} Hi Max FX You can read how client money is permitted to be used and what happens to it in case of bankruptcy in Regulatory Guide 212 http://www.asic.gov.au/asic/pdflib.n...-9July2010.pdf from the ASIC website. {quote}
For sure I can read it there but I asked you about it. Alpari UK, FXCM gave detailed answer. I don't really want to read huge document.
  • #448
  • Nov 11, 2013 6:17am Nov 11, 2013 6:17am
Quoting mmaker
{quote} He already gave you his reply. If you don't like this broker, move on to the others. He didn't hurt or harm you in any way, you shouldn't be badgering him like this.
This question was not addressed to you. So please ...
  • #449
  • Nov 11, 2013 1:03pm Nov 11, 2013 1:03pm
Quoting Max FX
{quote} For sure I can read it there but I asked you about it. Alpari UK, FXCM gave detailed answer. I don't really want to read huge document.
No problem. Here is a summary from the second last page of RG212

How client money is dealt with if licensee ceases to be licensed

RG 212.76 The Corporations Act provides for how client money is to be dealt with if a
licensee:
(a) ceases to be licensed (including a cessation because the licensee’s AFS
licence has been suspended or cancelled);
(b) becomes insolvent under an administration, has an administrator or
receiver appointed or is subject to similar proceedings; or
(c) ceases to carry on an activity authorised by the AFS licence and is paid
money in relation to that activity.
Note: See s981F and reg 7.8.03.

RG 212.77 If any of the above events occurs, client money is to be paid as follows:
(a) the first payment is of money that has been paid into the account in
error;
(b) if money has been received on behalf of insured persons in accordance
with a contract of insurance, the second payment is payment to each
insured person entitled to receive money from the client money account
in respect of claims that have been made and then in respect of other
matters;
(c) the next payment is payment to each person who is entitled to be paid
money from the client money account;
(d) if the money in the client money account is not sufficient to be paid in
accordance with paragraph (a), (b) or (c), the money must be paid in
proportion to the amount of each person’s entitlement; and
(e) if there is money remaining in the account after payments made in
accordance with the above, the remaining money is taken to be money
payable to the licensee.
Note: See reg 7.8.03(6).

RG 212.78 For each person who is entitled to be paid money from a client money
account, the account is taken to be subject to a trust in favour of the person:
reg 7.8.03(4). Similarly, if money in a client money account has been
invested the investment is taken to be subject to a trust in favour of each
person who is entitled to be paid money from the account: reg 7.8.03(5).
These arrangements override anything to the contrary in the Bankruptcy Act
1966 or a law relating to companies: reg 7.8.03(7).
  • #450
  • Nov 11, 2013 7:40pm Nov 11, 2013 7:40pm
Quoting Max FX
Dear FXOjafar, Can you please answer how customers of your company are protected from bankruptcy. Who is covered clients and what maximum amount will be paid per customer. Thanks in advance.
No extra protection/insurance except segregated client account with an AU broker.

Fxopen AU Product Disclosure Statement——
9.2 Client monies risk
Whilst the money you deposit in your account is segregated from our own, the funds are not held in a separate account. They are held in an account together with the funds of our other clients.
We are also permitted by law to use money deposited in our client monies account to meet the margin obligations of other clients and our own positions and for other purposes related to dealing in derivatives and not just the amounts relating to an individuals client's margin requirements.
This exposes each client to an increased counterparty risk that they may not receive all of the money held by us on their behalf in the client trust account if there is a deficit and we become insolvent or otherwise unable to pay the deficiency.

Is FXopen annual financial report available? Or is there a accumulative deficit in the client trust account? FXopen is offering very high leverage, some clients are likely in negative balance.
  • #451
  • Nov 11, 2013 8:15pm Nov 11, 2013 8:15pm
Quoting good mind
{quote} No extra protection/insurance except segregated client account with an AU broker. Fxopen AU Product Disclosure Statement—— 9.2 Client monies risk Whilst the money you deposit in your account is segregated from our own, the funds are not held in a separate account. They are held in an account together with the funds of our other clients. We are also permitted by law to use money deposited in our client monies account to meet the margin obligations of other clients and our own positions and for other purposes related to dealing in derivatives...
Thats what margin call is for. It prevents a negative balance. All ASIC brokers are required to have PI insurance to prevent damage by wrong doing. The probability of a broker misplacing or losing client deposit monies is low if directors and responsible managers act according to the law. The only time that your monies are at risk is if someone decided to act illegally. But this is the same in every regulated environment. If your funds are insured by the broker its likely insurance won't pay out if the people responsible for the funds are breaking the law. If you believe your funds are 100% insured in case of blind robbery I would love to read the policy that they are attached to.
  • #452
  • Edited Nov 12, 2013 2:27am Nov 11, 2013 9:03pm | Edited Nov 12, 2013 2:27am
Quoting good mind
{quote} No extra protection/insurance except segregated client account with an AU broker. Fxopen AU Product Disclosure Statement—— 9.2 Client monies risk Whilst the money you deposit in your account is segregated from our own, the funds are not held in a separate account. They are held in an account together with the funds of our other clients. We are also permitted by law to use money deposited in our client monies account to meet the margin obligations of other clients and our own positions and for other purposes related to dealing in derivatives...
Like Takisd says, we have protection in place such as margin calls and stop outs as well as reduction in leverage when the account balance is below $1000 to protect against negative balances. We do have a few though that slip through but they are few and far between with an incidence rate of approximately 2 per 1000 accounts and no more than $30. We also have a strict policy of keeping client accounts in surplus so if there is an unlikely, world shattering event that results in a sudden mass withdrawal, we do have more than enough money to pay out everyone including profits.

As for insurance, we do have PI insurance as all brokers in Australia are required to do so.

Also our Directors are fully vetted by ASIC before being allowed to act as Directors so our integrity and business skills are pre-approved by the regulator. If we did not set the highest standards of good character, honesty and integrity on ourselves and our company, we would not have been successful in our license application in the first place.
  • #453
  • Nov 12, 2013 10:24am Nov 12, 2013 10:24am
Quoting FXOjafar
{quote} Like Takisd says, we have protection in place such as margin calls and stop outs as well as reduction in leverage when the account balance is below $1000 to protect against negative balances. We do have a few though that slip through but they are few and far between with an incidence rate of approximately 2 per 1000 accounts and no more than $30. We also have a strict policy of keeping client accounts in surplus so if there is an unlikely, world shattering event that results in a sudden mass withdrawal, we do have more than enough money...
Al these thing are great but...I didn't get answer on my few straight question. impossibility to provide a competent answer not a copy paste from official document is not acceptable for official representative.

Questions are same. Please provide straight answers on my questions.

How clients funds in your australian entity are protected. No need to tell about your management skills or things like this. Only facts.

1) how customers of your company are protected from bankruptcy
2) Who is covered clients and what maximum amount will be paid per customer
3) Do you participate in any additional insurance schemes for clients protection

Thanks in advance
  • #454
  • Nov 17, 2013 7:46pm Nov 17, 2013 7:46pm
Quoting Takisd
{quote} Thats what margin call is for. It prevents a negative balance. All ASIC brokers are required to have PI insurance to prevent damage by wrong doing. The probability of a broker misplacing or losing client deposit monies is low if directors and responsible managers act according to the law. The only time that your monies are at risk is if someone decided to act illegally. But this is the same in every regulated environment. If your funds are insured by the broker its likely insurance won't pay out if the people responsible for the funds are...
Negative balance will likely happen in the event of the Flash Crash/central bank intervention/any sudden incidents,if someone using 100 larger leverage. A broker who offers 200 leverage is unethical and likely a market maker.
Professional Indemnity Insurance has nothing to do with client money protection in the case of bankruptcy.
UK broker offers segregated account and 50K GBP FSCS insurance to retail client,and i also think FSA is more reliable/stricter than ASIC.
I have to say FXopen may offer the best spread+commission(remember to use referral in account management...). Since FXopen has obtained FSA licence for 6 months, when will FXopen UK accept client?
  • #455
  • Nov 17, 2013 8:24pm Nov 17, 2013 8:24pm
Quoting Max FX
{quote} Al these thing are great but...I didn't get answer on my few straight question. impossibility to provide a competent answer not a copy paste from official document is not acceptable for official representative. Questions are same. Please provide straight answers on my questions. How clients funds in your australian entity are protected. No need to tell about your management skills or things like this. Only facts. 1) how customers of your company are protected from bankruptcy 2) Who is covered clients and what maximum amount will be paid...
1) You are protected by the law. You are entitled to your own money in the even that we became bankrupt and since client funds use is strictly controlled by ASIC, you would have every cent due to you returned. This is a summary of the law I posted above.

2) The maximum amount per client is 100% of their deposits.

3) All Australian brokers must be insured.

Quoting good mind
{quote} Negative balance will likely happen in the event of the Flash Crash/central bank intervention/any sudden incidents,if someone using 100 larger leverage. A broker who offers 200 leverage is unethical and likely a market maker. Professional Indemnity Insurance has nothing to do with client money protection in the case of bankruptcy. UK broker offers segregated account and 50K GBP FSCS insurance to retail client,and i also think FSA is more reliable/stricter than ASIC. I have to say FXopen may offer the best spread+commission(remember to use...
I don't know when FXOpen UK will open for clients but you can be sure they will let everyone know about it. If you prefer to use an FSA broker, you could wait for them.

As far as I know, they will be using the same model as us. That is, ECN only.
  • #456
  • Nov 17, 2013 8:45pm Nov 17, 2013 8:45pm
Commission and spreads are good.
But swaps are HORRIBLE. Really, really horrible.
I mean, positives swaps for most brokers are negative at fxopen AU.
I will post some examples later if Jafar has answer to all, as usual
This is unfair IMO to mark up swaps......

Also, I had HUGE slippages (when I say huge I mean 20-70 pips) and they say it is normal, we are ECN, we give you best prices... Maybe it is true but it is not pleasant. For this I am less angry at then than for swaps. And yes to be fair most of these slippages was while news or big market move.

Also, Jafar, please check your exec time, I had 5, 10sec delay, sometime.

Overall, fxopen AU offers good spread, normal commission, horrible swaps.
  • #457
  • Nov 18, 2013 3:20am Nov 18, 2013 3:20am
Quoting elvis1
Commission and spreads are good. But swaps are HORRIBLE. Really, really horrible. I mean, positives swaps for most brokers are negative at fxopen AU.
Thats what we call double dipping in Australia. They are not the only broker calming to be low cost whilst charging higher financing charges . I sometimes hedge open positions for extended periods so this would really hurt me
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  • #458
  • Nov 18, 2013 1:24pm Nov 18, 2013 1:24pm
Good news. A friend told me fxopen AU is going to review their swaps to give customer better satisfaction. They won't be awesome but better. I hope this true. Jafar can you confirm? What delay can we expect?
Thanks
  • #459
  • Edited 6:22pm Nov 18, 2013 6:02pm | Edited 6:22pm
Quoting elvis1
Good news. A friend told me fxopen AU is going to review their swaps to give customer better satisfaction. They won't be awesome but better. I hope this true. Jafar can you confirm? What delay can we expect? Thanks
That would be more in keeping with their claims of offering the lowest costs

I have a question Jafar, Can you explain how spreads are higher with some ecn brokers than they are with others seeing as they are getting their liquidity and feeds from basically the same providers? Spreads can be as much as 0.5 pip different on a consistent basis between different ecn brokers. Are the dearer ones loading the spread or are the cheaper ones discounting the spread?
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  • #460
  • Nov 18, 2013 6:55pm Nov 18, 2013 6:55pm
Quoting elvis1
Commission and spreads are good. But swaps are HORRIBLE. Really, really horrible. I mean, positives swaps for most brokers are negative at fxopen AU. I will post some examples later if Jafar has answer to all, as usual This is unfair IMO to mark up swaps...... Also, I had HUGE slippages (when I say huge I mean 20-70 pips) and they say it is normal, we are ECN, we give you best prices... Maybe it is true but it is not pleasant. For this I am less angry at then than for swaps. And yes to be fair most of these slippages was while news or big market...
Our Swap is based on current Market Libor/Libid rates in the market and are updated daily according to market conditions with a 25% markup. We can't help it if competitors are a bit lazy in updating swaps they copied a year ago from a competitor then forgot about them. Our rates are always current.

Quoting elvis1
Good news. A friend told me fxopen AU is going to review their swaps to give customer better satisfaction. They won't be awesome but better. I hope this true. Jafar can you confirm? What delay can we expect? Thanks
I know of no review apart from the usual daily updates to rates.


Quoting M.A.C.Doug
{quote} That would be more in keeping with their claims of offering the lowest costs I have a question Jafar, Can you explain how spreads are higher with some ecn brokers than they are with others seeing as they are getting their liquidity and feeds from basically the same providers? Spreads can be as much as 0.5 pip different on a consistent basis between different ecn brokers. Are the dearer ones loading the spread or are the cheaper ones discounting the spread?

Some mark up the spread, in particular "STP" brokers and Market Makers. Others may not have a liquidity network as large as ours is so they don't have the same ability to bring you the best bids and offers available.
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