Negative account balance (London Capital Group) | Forex Factory

Options

Permalinks
Print Thread

Similar Threads

LIVE Traders - LCG -London Capital Group FX 165 replies

London Capital Group Expects to Announce 2015 Losses 4 replies

London Capital Group closed all my October Oil positions 39 replies

London Capital Group experts please 2 replies

Currenex - London Capital Group 1 reply

Attachments: Negative account balance (London Capital Group)
Exit Attachments

Negative account balance (London Capital Group)

  • #1
  • First Post: Jun 29, 2015 5:47am Jun 29, 2015 5:47am
I have small negative account balance on London capital group broker. . I know this broker as a reputable broker.They send me this mail... Why i should pay this debt? Is weekend gap my mistake? Guys, i need your help.
Attached Image (click to enlarge)
Click to Enlarge Name: ScreenHunter_153.jpg Size: 28 KB
  • #2
  • Jun 29, 2015 6:31am Jun 29, 2015 6:31am
Quoting Naokia980
I have small negative account balance on London capital group broker. . I know this broker as a reputable broker.They send me this mail... Why i should pay this debt? Is weekend gap my mistake? Guys, i need your help. {image}

It's your responsibility to manage your positions and you have to give back money to your broker, otherwise they can use law instruments against you. Moreover, leaving high leveraged position over the weekend in this whole Greece situation? Come on!!!
  • #3
  • Jun 29, 2015 6:51am Jun 29, 2015 6:51am
Quoting Naokia980
I have small negative account balance on London capital group broker. . I know this broker as a reputable broker.They send me this mail... Why i should pay this debt? Is weekend gap my mistake? Guys, i need your help. {image}
Unfortunately, you must pay
  • #4
  • Jun 29, 2015 6:52am Jun 29, 2015 6:52am
Yes its your mistake.

You took a punt over Greece and lost. If it were the other way round and you would have made money - what would you say if LCG wouldnt pay, "because the gap is not their fault" ?
  • #5
  • Jun 29, 2015 9:23am Jun 29, 2015 9:23am
Quoting Naokia980
I have small negative account balance on London capital group broker. . I know this broker as a reputable broker.They send me this mail... Why i should pay this debt? Is weekend gap my mistake? Guys, i need your help. {image}
I had to write this post in a hurry. I didn't mean to sound rude. Sorry I don't have time to edit it better right now.

My advice:
1. Firstly if its a "small" negative account balance, pay it off and then CLOSE your account with them.
2. NEVER trade with a broker ever again that doesn't offer negative account balance protection.
One UK broker that I know DOES offer negative account balance protection is - ActivTrades .co.uk
I have tested this and their system has reset a negative account balance of mine back to zero.
NEVER trade with a broker that states "Losses may EXCEED initial deposit!". Your ass is hanging in the wind if you trade with a broker who states this.
You should have been well aware of this danger after the CHF disaster back in January where stop losses where not honored by many brokers.

ALWAYS READ the client agreement you are signing when you open a live account with a broker. KNOW what you are agreeing to. I can guarantee you that in your agreement with London Capital Group, there will be a section that states the client (that would be you) is liable to pay any negative balance on the account. They will also have a section that absolves them of any liability etc.
  • #6
  • Jun 29, 2015 9:40am Jun 29, 2015 9:40am
Quoting maxvre
{quote} I had to write this post in a hurry. I didn't mean to sound rude. Sorry I don't have time to edit it better right now. My advice: 1. Firstly if its a "small" negative account balance, pay it off and then CLOSE your account with them. 2. NEVER trade with a broker ever again that doesn't offer negative account balance protection. One UK broker that I know DOES offer negative account balance protection is - ActivTrades .co.uk I have tested this and their system has reset a negative account balance of mine back to zero. NEVER trade with a broker...
hi,
but the state"losses may exceed~."
can you show me any broker without this state?
  • #7
  • Jun 29, 2015 10:28am Jun 29, 2015 10:28am
Quoting Naokia980
I have small negative account balance on London capital group broker. . I know this broker as a reputable broker.They send me this mail... Why i should pay this debt? Is weekend gap my mistake? Guys, i need your help. {image}
How big is it?
  • #8
  • Jun 29, 2015 10:30am Jun 29, 2015 10:30am
Quoting shrike
Yes its your mistake. You took a punt over Greece and lost. If it were the other way round and you would have made money - what would you say if LCG wouldnt pay, "because the gap is not their fault" ?
Can't agree more, I always do not understand why people trading on here moan and cry over brokers chasing them for negative balances, they actually covered it with their LP then sent it to their PB, if the losses of collateral exceeds initial balance, they owe money to the bank, that's exactly why brokers went under on the CHF move
  • #9
  • Jun 29, 2015 10:33am Jun 29, 2015 10:33am
Quoting plotinus82
{quote} Can't agree more, I always do not understand why people trading on here moan and cry over brokers chasing them for negative balances, they actually covered it with their LP then sent it to their PB, if the losses of collateral exceeds initial balance, they owe money to the bank, that's exactly why brokers went under on the CHF move
  • #10
  • Jun 29, 2015 6:31pm Jun 29, 2015 6:31pm
Quoting entheos
{quote} hi, but the state"losses may exceed~." can you show me any broker without this state?
brokers who have a negative balance protection like fxpro, exness, ...
  • #11
  • Jun 30, 2015 1:49am Jun 30, 2015 1:49am
Quoting avo
{quote} brokers who have a negative balance protection like fxpro, exness, ...

It's a so-called protection. Remember the FXCM story.
  • #12
  • Jun 30, 2015 1:08pm Jun 30, 2015 1:08pm
Quoting avo
{quote} brokers who have a negative balance protection like fxpro, exness, ...
Both exness and fxpro have obscure 'force majeure' clauses that they will likely use to chase negative balances from clients in the event of a sudden move in the market rendering the negative balance protection largely redundant if you ask me. Before they do so they might weigh it against the impact of potential bad publicity however if the business is really in trouble they will use it against you. Lets not forget that FXCM used the same obscure clause to chase after negative balances even though they too provided negative balance protection.
  • #13
  • Jul 1, 2015 2:02am Jul 1, 2015 2:02am
Quoting rjm101
{quote} Both exness and fxpro have obscure 'force majeure' clauses that they will likely use to chase negative balances from clients in the event of a sudden move in the market rendering the negative balance protection largely redundant if you ask me. Before they do so they might weigh it against the impact of potential bad publicity however if the business is really in trouble they will use it against you. Lets not forget that FXCM used the same obscure clause to chase after negative balances even though they too provided negative balance protection....
Please can you give the clause number which stiplulate this.Thanks
  • #14
  • Edited 8:37am Jul 1, 2015 8:24am | Edited 8:37am
Quoting avo
{quote} Please can you give the clause number which stiplulate this.Thanks
There are a few differences between FXCM and FXpro. Fxcm Uk as far as I know didn't offer NBP on their terms and conditions. I remember in their terms they even said that losses can exceed deposits. Only on their site and on their marketing they promised NBP. FXpro offers NBP in their client agreement not only on their site.

5.1 CFDs, which are leveraged products, incur a high level of risk and can result in the loss of all of the clients invested capital. However, it should be noted that FxPro operates on a negative balance protection basis; this means that the client cannot lose more than his/ her overall investment. (Annex A Risk Disclosure Notice)

12.1 In the case of a Force Majeure Event the client shall accept any loss arising. (Annex A Risk Disclosure Notice)

24.3 If Fxpro determines that a FME occurred, without prejudice to any other rights of the client under the Service Agreement, the Firm may: 24.3.7. amend any of the content of the Service Agreement on the basis that it is impossible for Fxpro to comply with it. (Client Agreement)

However there are some issues with FxPro. They don't say they will credit a negative balance to 0. NBP can mean they will apply margin call and this is why you can't lose more than the overall investment.

Obviously when a FME occurs it's impossible to make the margin call and the account can be negative. If they would have said that NBP means they will credit to 0 a negative account the FME wouldn't make impossible to forgive debts. It's never impossible to forgive debts, but it may be impossible to guarantee stop losses and to make successful margin calls (without the account to go into negative) on FME. They don't explicitly say what NBP means.

But it never says in their client agreement that you can lose more than the investment.It says you can only lose the investment (which is different than FXCM who said in the agreement the client can lose more than the investment). On FME they don't say that both parties are released from obligations. It says the client should accept any loss.

17.1 from Client Agreement: The client reserves the right to terminate the Service Agreement ( ) given that there are no open positions ( ) and the client has no outstanding obligations to Fxpro.

17.2 The client reserves the right to terminate the Service Agreement, ( ) given that there are no open positions traded through the relevant trading account and the client has no amounts due for payment to Fxpro.

17.6 A termination of the Service Agreement shall not imply that any of the clients responsabilities cease to exist; the latter shall still be liable to pay to the Firm: 17.6.1. any amount that is due to Fxpro.

If they offer NBP how can there be amounts due for payment?

The Fxpro agreement is not clear and cut, it's interpretable. However a broker who would intend to sue their clients would make other terms and conditions. They can lose with these terms and conditions. I think it's safe to use Fxpro (expecially Fxpro from Cyprus) if you want protection from negative balances.
  • #15
  • Last Post: Jul 1, 2015 8:47am Jul 1, 2015 8:47am
Quoting str8
{quote} There are a few differences between FXCM and FXpro. Fxcm Uk as far as I know didn't offer NBP on their terms and conditions. I remember in their terms they even said that losses can exceed deposits. Only on their site and on their marketing they promised NBP. FXpro offers NBP in their client agreement not only on their site. 5.1 CFDs, which are leveraged products, incur a high level of risk and can result in the loss of all of the clients invested capital. However, it should be noted that FxPro operates on a negative balance protection basis;...
Thank you very much!
0 traders viewing now