CMC Complaint & Ombudsmans Response

[arabianights]

I don't see the problem with £2k/point, especially two years ago that should have been easy to hedge in the dax, now you'd have to work it a bit but c'est la vie... I also understand the idea in putting considerable size on when one is confident in a trade, this is the best way to trade in fact... Soros will endorse that...

Why must we all be so cynical 🙂

 

[Calinor]

I doubt he is blaming them for letting him build up the position. He is blaming them for allowing him to build up a position if they weren't prepared to allow him to close it (two different things). Forget the amount of money. Even if it is £1 per point. If they allow me to open it with a click of a button, and then when I tried to close it in profit, they insisted I call the dealer - leading to me losing out. Then I'd be annoyed. It is bad practice, and puts me off CMC.

I think it is clear that he should have protected himself more counter_violent. But this kind of thing from CMC is disappointing and unnecessary. If instead of placing any blame on the Sb company, you jut want to blame the person who didn't protect himself carefully enough, then it is no wonder they are allowed to continue to get away with such obvious rip-offs. I think we should aim for a higher standard.

 

[karl6666]

Answer the phone..

Just a thought, the phone gets answered normally when you have lost / losing money.

But what would have happened if the position would have gone even bigger to say £250k profit and rising do you think CMC would have answered the phone at all.

Yes we should protect ourselves, but what if the deal had gone the other way and wiped out the account, any stops not met. Do you just roll over an say well I should have been more protected.

These people have strict guidelines to follow, if tomtom didnt protect himself fair enough its not the point, the issue is. Dealing at a pc using a mouse is the idea, its the internet remember, a screen dump here doent matter, CMC havent followed there rules. If you made £80k out of CMC by accident, can you imagine all the back up devices they would have, now a punter has lost money they are playing dumb

How money posts have you read here, somebody getting a ' phone the dealer' or 'software error' when they are £100 up, or cant close the deal. Not many, if any

Again imagine if the pot went up to £250 k and higher, can anybody answer that ??

Would CMC pulled out the fuses and hid under the tables

Karl

 

[singh2jatt]

i was just CMC, very small trades my acount was around 1k. Even i found that cmc platform was a bit of a fraud as i often found mistakes.

 

[gle101]

Hi Gle101, some questions to think about.

1, What is wrong in watching the market move in the direction of profitablity ?
2, Is it wrong to add to this profitable trade ?
3, When it is felt the time is right to close, is it not unreasonble that the SB Firm accept your instructions over the phone after suspending internet/online trading ?
4, You assume that I only have one trading account ?
5, £80k is a lot of cash to have earn, I earnt that cash by trading in a small time frame, I are a trader and this is what traders do. problems do arise when the execution SB Firm accepts your orders to buy/sell then will not let you close this postion.
6,This was not at 9pm or 4am this was in while live furtures trading was happening, what could of possibley been the problem if CMC had of hedged the postion ?

Or was it due to CMC not hedging this postion, ( what opened in a small time pieriod) someone's head was going to roll at there dealing desks if this postion of over £80k profit got closed the reason for obstruction.

What makes this thread so interesting is, that it also takes up important issues concerning money and risk management. To blame the SB company indefinitely for a setup where you could not secure your own position is a mistake. If you had several SB accounts at the time, why didn't you hedge the position? I mean at least be honest about it, with your experience today you would not build up a huge position like this, without being able to secure your exit somewhere else. The same thing applies to trading the DMA, if something goes terrible wrong with your current broker, you have to have an alternative up and running in order to act quickly.

 

[arabianights]

and if the exchange goes down, or a mother****er of a stop goes off and takes out every order?

you can't guard against everything...

 

[gle101]

and if the exchange goes down, or a mother****er of a stop goes off and takes out every order?

you can't guard against everything...

No this is correct, but at least you have to have a basic security. This involves alternatives being able to exit your position.

 

[counter_violent]

Just a thought, the phone gets answered normally when you have lost / losing money.

But what would have happened if the position would have gone even bigger to say £250k profit and rising do you think CMC would have answered the phone at all.

Yes we should protect ourselves, but what if the deal had gone the other way and wiped out the account, any stops not met. Do you just roll over an say well I should have been more protected.

These people have strict guidelines to follow, if tomtom didnt protect himself fair enough its not the point, the issue is. Dealing at a pc using a mouse is the idea, its the internet remember, a screen dump here doent matter, CMC havent followed there rules. If you made £80k out of CMC by accident, can you imagine all the back up devices they would have, now a punter has lost money they are playing dumb

How money posts have you read here, somebody getting a ' phone the dealer' or 'software error' when they are £100 up, or cant close the deal. Not many, if any

Again imagine if the pot went up to £250 k and higher, can anybody answer that ??

Would CMC pulled out the fuses and hid under the tables

Karl

Hi Karl, I just have two stories to tell here.

My S B company opened a position on my platform for a short aud usd one time....price dropped over 100 pips...i was away from the PC at the time..so i know for a fact that i didn't open the position...so naturally i phoned and asked what was going on ...dealer checked into it and said position was opened by me and that it stood...so i asked to speak to the line manager. Line manager sent e-mail requesting client audit files stored on my p c...which i duely sent by return...a day or two went by and he then replied showing proof as he saw it about sent and received files between parties....so i asked for his line manager and pointed out to him that they did indeed receive the order...but a small problem of where it was generated from as it was not from my p c ...at which point he investigated further and then promptly rectified the situation...including I might add...compensation for my time in dealing with the problem correctly.

Telephone loan... we contacted our high street bank a few yrs ago ref a personal loan for a new car as rates seemed very favorable at the time....well...they were even more favorable as the bank quoted the wrong rate...when we sat down and worked it out...it was something like 10k loan amount with 250 pounds interest over 3 years....unbelievable....so a day later we phoned back to do the business...we were immediately quoted a different rate etc etc ...so we said no...the rate we were quoted was xxx....and we insisted he check his telephone records of the previous conversation....a day later he came back and we did the business at the initially quoted rate...and all because this was a recorded conversation and everything we had stated was 100% correct.....lucky us !

 

[Black Swan]

And Black Swan, maybe 50-60 pips is not so much to a trader at that level, but at 2000 per point would still be 100-120k. That's a lot of money, and not an amount that anyone would be happy to allow to be taken away 'unfairly'. That is aside from the principle of the matter. Trying it again after finding that they won't even let you close out your position would not really be a great idea would it?

.

OK, so lots of guys refer to blokes such as Simon from Capital as "glorified bookies", IMHO that's a bit harsh, but let's ride with it for now. Assuming they are "bookies" how would you imagine a bookie would react to a 2k a pip bet, just suck it up, or would they need time to deal with it, perhaps offset it?

Here's another thing, I want the SB firms to continue to be the golden geese all lined up in a row that can lay lots of small eggs for years to come. Some 9ct, some 18 ct, of lots of diferent sizes and shapes, I don't want some greedy fooker to get one of the big geese to squat out an egg that kills the golden goose, similarly I don't want some fat fook (such as the owner of a footy club up in the N.East) to be able to stiff an SB company out of 50 million quid. Heh, is that me being selfish, or applying some in depth analysis/intelligence towards the future success of the main SB companies?

I'm sorry i still struggle with the position the OP got himself into and in simplistic terms if he's that 'good and brave' why not just take a couple of grand a day off CMC, quietly and effieciently? 2 years on he'd have taken 600K, let me hazard a guess that this was The deal, the big fish that 'got away'...

 

[A Dashing Blade]

. . . how would you imagine a bookie would react to a 2k a pip bet, just suck it up, or would they need time to deal with it, perhaps offset it?
...

I would have expected him/her to have offset it (ie hedged it) when the position was opened.

 

[stevespray]

To my mind it doesnt matter if they are a glorified book-maker or otherwise. Neither does it matter if they bucket trades or lay them off into the larger market place - this is 100% upto the firm in question to decide.

The FSA state that all regulated firms "must treat their clients fairly". So the question is, regardless of what the T&C might state, did the firm act 'fairly' towards Tom? At face value (given Toms posts) I would have to say a resounding 'No'. They allowed him to build up a trading position on his account and then acted in such a manner as to make it difficult for him to reduce / close his exposure. The sudden problems which the firm had in executing his orders require clear explanation in order for the firm to escape being labelled 'unfair'. Furthermore the T&C appear to specify that a client can deal at the quoted prices provided that instructions are given whilst a particular market is open.

Steve.

 

[gle101]

To my mind it doesnt matter if they are a glorified book-maker or otherwise. Neither does it matter if they bucket trades or lay them off into the larger market place - this is 100% upto the firm in question to decide.

The FSA state that all regulated firms "must treat their clients fairly". So the question is, regardless of what the T&C might state, did the firm act 'fairly' towards Tom? At face value (given Toms posts) I would have to say a resounding 'No'. They allowed him to build up a trading position on his account and then acted in such a manner as to make it difficult for him to reduce / close his exposure. The sudden problems which the firm had in executing his orders require clear explanation in order for the firm to escape being labelled 'unfair'. Furthermore the T&C appear to specify that a client can deal at the quoted prices provided that instructions are given whilst a particular market is open.

Steve.

There is definitely a big risk to let a market maker decide the faith of such a huge position. Anyway, I am in favor of more strict regulation towards SB companies. 2 years ago EU MiFID "Best execution" directive policy was not implemented. Today as I understand it, every bit of client communication must be recorded. If this was the case 2 years ago I don't know.

 

[anley]

They have a duty to 'treat their clients fairly'

True, but not is they can get away with not doing so 🙂

PS. This is NOT directed at any firm in particular.

 

[seguna]

They have a duty to 'treat their clients fairly'

True, but not is they can get away with not doing so 🙂

...And that's exactly why TomTom should take them to task.

This is part of the overall process of accountability. It's part of the reason why 'society' ends up as it is, for better or worse. It comes down to what people are willing to put up with and take lying down.

In my view, this is one major reason why the so called 'third world' countries generally suffer less democratic less transparent goverment (please I KNOW THE WEST is FAR from perfect - only speaking by way of comparison) - cos they let their leaders get away with murder - literally.

If everone who's ever been scammed by a SB jumped up and down and made as much noise as possible, don't you think things might be improved? I know for one I've let some things slip I should probably have complained about. Though I knew complaining would end nowhere, it would have added to the volume of any existing complaints along that line.

 

[gle101]

If everone who's ever been scammed by a SB jumped up and down and made as much noise as possible, don't you think things might be improved? I know for one I've let some things slip I should probably have complained about. Though I knew complaining would end nowhere, it would have added to the volume of any existing complaints along that line.

I think somewhat this has been improved since TomTom had his encounter with CMC. SB companies are more carefully now, especially as MiFID directives has been implemented by the EU. Also increased competition will see to that SB behave more accordingly to set rules. But you will never get away from your own responsibility, one should not hand over all the security issues to a Market Maker. There are way too many things that can go wrong.

 

[seguna]

... 2 years on he'd have taken 600K, let me hazard a guess that this was The deal, the big fish that 'got away'...

BlackSwan, don't mind telling you that much of what you've posted there is a load of...Do you really think people betting/trading at that size is what kills market makers? Absolutely not - it shouldn't be unless the MMs are crooks i.e. they proactively bet against their clients.

True Marketmaking, which is what the SB companies are supposed to be doing is simply passing on the spread yet leaving the risk with the client. MMs are supposed to have a NET book on every stock/instrument which they then hedge or insure against and if they do this properly and manage it right, they'll always make money at a certain margin.

The problem is, the MMs are GREEDY and very much so. Their regular margin is NOT enough for the majority of them. They like to exploit their extensive inside knowledge of the markets to trade against their clients and grow their own accounts. There's actually nothing wrong with wanting to trade or even to use your extensive knowledge to your own advantage. What's wrong is trying to use this AGAINST YOUR CLIENTS to enrich yourself and that's where the jiggery pokery around execution and prices comes in. Many SB companies (not all) deliberately manipulate prices to the disadvantage of their clients. How many times do we experience slippage to our advantage?..did I hear never?

The issue of SB companies being 'glorified bookies', though apt, is flawed. They are SUPPOSED to be more than that. Why? because normal bookies have no real underlying market! They simply quote prices based on their OPINION. You are therefore ALWAYS trading against that opinion and nothing else. It is up to them how they then manage their NET book for profitability.

SB companies on the other hand DO have an underlying market which offers its own real world prices based on supply and demand and they are supposed to quote around these real world prices. Though there's a 'betting' layer on top of this trading market layer, that's really just a devise for the MAIN benefit of SB which is no CGTax.

The market element is MORE important than the betting element hence why SB firms are FSA regulated!🙄

 

[gle101]

BlackSwan, don't mind telling you that much of what you've posted there is a load of...Do you really think people betting/trading at that size is what kills market makers? Absolutely not - it shouldn't be unless the MMs are crooks i.e. they proactively bet against their clients.

True Marketmaking, which is what the SB companies are supposed to be doing is simply passing on the spread yet leaving the risk with the client. MMs are supposed to have a NET book on every stock/instrument which they then hedge or insure against and if they do this properly and manage it right, they'll always make money at a certain margin.

The problem is, the MMs are GREEDY and very much so. Their regular margin is NOT enough for the majority of them. They like to exploit their extensive inside knowledge of the markets to trade against their clients and grow their own accounts. There's actually nothing wrong with wanting to trade or even to use your extensive knowledge to your own advantage. What's wrong is trying to use this AGAINST YOUR CLIENTS to enrich yourself and that's where the jiggery pokery around execution and prices comes in. Many SB companies (not all) deliberately manipulate prices to the disadvantage of their clients. How many times do we experience slippage to our advantage?..did I hear never?

The issue of SB companies being 'glorified bookies', though apt, is flawed. They are SUPPOSED to be more than that. Why? because normal bookies have no real underlying market! They simply quote prices based on their OPINION. You are therefore ALWAYS trading against that opinion and nothing else. It is up to them how they then manage their NET book for profitability.

SB companies on the other hand DO have an underlying market which offers its own real world prices based on supply and demand and they are supposed to quote around these real world prices. Though there's a 'betting' layer on top of this trading market layer, that's really just a devise for the MAIN benefit of SB which is no CGTax.

The market element is MORE important than the betting element hence why SB firms are FSA regulated!🙄

With all the respect, I think the picture you are painting is way too black. It seems you have have had really bad experience with SB. People lose money trading SB because they do not take care of the simplest rules of trading, like money and risk management. SB is not perfect, but with them you trade the markets at a lower entry level. DMA is to preferred if you like to have larger stakes. Still all the same, you have to adapt the basic trading principles in order to succeed.

 

[Black Swan]

BlackSwan, don't mind telling you that much of what you've posted there is a load of...Do you really think people betting/trading at that size is what kills market makers? Absolutely not - it shouldn't be unless the MMs are crooks i.e. they proactively bet against their clients.

True Marketmaking, which is what the SB companies are supposed to be doing is simply passing on the spread yet leaving the risk with the client. MMs are supposed to have a NET book on every stock/instrument which they then hedge or insure against and if they do this properly and manage it right, they'll always make money at a certain margin.

The problem is, the MMs are GREEDY and very much so. Their regular margin is NOT enough for the majority of them. They like to exploit their extensive inside knowledge of the markets to trade against their clients and grow their own accounts. There's actually nothing wrong with wanting to trade or even to use your extensive knowledge to your own advantage. What's wrong is trying to use this AGAINST YOUR CLIENTS to enrich yourself and that's where the jiggery pokery around execution and prices comes in. Many SB companies (not all) deliberately manipulate prices to the disadvantage of their clients. How many times do we experience slippage to our advantage?..did I hear never?

The issue of SB companies being 'glorified bookies', though apt, is flawed. They are SUPPOSED to be more than that. Why? because normal bookies have no real underlying market! They simply quote prices based on their OPINION. You are therefore ALWAYS trading against that opinion and nothing else. It is up to them how they then manage their NET book for profitability.

SB companies on the other hand DO have an underlying market which offers its own real world prices based on supply and demand and they are supposed to quote around these real world prices. Though there's a 'betting' layer on top of this trading market layer, that's really just a devise for the MAIN benefit of SB which is no CGTax.

The market element is MORE important than the betting element hence why SB firms are FSA regulated!🙄

I'm confused, you've swung from defending the process of MM & the SB firms to then slate them/ get inquistive re. their practices and support my original statement. You've also (badly) attempted to put a twist on my post/use it to fit your poor statement.

 

[gooseman]

what about the clients who try to exploit holes in the SB's prices? I suppose this is an ok practice?

 

[gle101]

what about the clients who try to exploit holes in the SB's prices? I suppose this is an ok practice?

Apparently, and some traders even have the nerve to withhold they should be able to keep the profit. In this regard I am referring to substansial incorrect prices.