How an "honest" stock exchange drove a Kazan trader into debt - page 4
You are missing trading opportunities:
- Free trading apps
- Over 8,000 signals for copying
- Economic news for exploring financial markets
Registration
Log in
You agree to website policy and terms of use
If you do not have an account, please register
He did not have any classic margin call. Again, he had no market position per se. Don't think in terms of forex.
That it was the MICEX currency section I understood. And that he thought the two instruments he was trading were one. But I won't say for sure, because I don't know much about MICEX rules.
But still, there must be some algorithm for determining risk in the software through which he traded.
Dima, it's simple, the settlement between counterparties is such a complicated procedure on the exchange, that it is impossible to know for sure if you are sitting in profit or not, until the moment of clearing. For example, a positive variation margin after clearing can turn into a negative one and be credited already in the account.
If we know what price we entered at and we know the current quote, what slippage there is so huge or commission, how can the margin become negative?
The question is about the currency section and FORTS.
That it was the MICEX currency section I understood. And that he thought the two instruments he was trading were one. But I won't say for sure, because I don't know much about MICEX rules.
But still, there must be some algorithm for determining risk in the software through which he traded.
Here, yes, Alfa screwed up. Well, they had their own model for determining risk (in the model offered by the exchange, this would not happen at all). But since their terminal allowed to take such a position, it should have taken into account all of the trader's obligations that arose in connection with its taking (in this case, the funding rate). But this was not done. Why not?
In reality, everything would have been fine for alpha under any scenario. For what this situation is in fact: the trader has inadvertently taken a loan from the bank, the interest on which was higher than his account. What does the bank lose if the trader fails to repay the interest? Nothing, because the trader always has a huge amount of free money, and the bank does not know where to spend it. So he won't get interest for a few days of notional money, so what? In reality he has already robbed a trader of 6 million. And the fact that he did not get more, no big deal.
If we know what price we entered at and we know the current quote, what are the slippages so huge there or the commissions, how can the margin become negative?
Question on the currency section and FORTS.
Specifically on FORTS: the difference in conversion rates can play a cruel trick. All transactions are consolidated at the time of clearing, so in some cases the exact price is known only in the evening, even when the transaction is an exit from the position (roughly - something was bought in the morning at an approximate price, and in the evening we learned the exact price of what we bought).
As for the exchange as a whole: risk management of each market differs considerably, take repo at least. Generally there is no uniform formula. Plus many risks are regulated by the broker himself, and here everything depends on the quality of broker's software (the story with this trader is exactly this case).
The question is in the wrong section. It should be addressed to the gentlemen in the "Stock Exchange Trading" section.
I think only 10% read "Stock Trading", all the passions are heated here).
Y-yyyy, now I went to a stock market forum, where Herczyk's fans gather and also discuss this story. I found an interesting screenshot. I do not understand; did Gerchik open his brokerage company?
An additional source of income.
Binary options adverts... Oops options. Bullshit, this guys is unreal... )
What does this have to do with binary?