Brokers will look into the wallets of their traders
The industry continues to change after The force majeure events of January 15, called "Black Thursday. We have already talked about policy of changes in trading and margin conditions (a strong decrease in the leverage provided) before, in general, standard for the market news publications, which, however, have the potential for high volatility. Now the question concerns directly the trader's wallet.
Alpari UK will ask its clients to pay their debts
The interim managers of Alpari UK will ask their clients, who became debtors to the company after the strong movements of the Swiss franc, to pay their debts. That was the official response of KPMG, published in the FAQ (frequently asked questions) to the company's customers.
"Q. What if I owe Alpari (UK) Limited money?
A. You will be asked to pay that money. We will write to you with details of where the money should be paid.
Translation: "Question: What if I am a debtor Alpari (UK)?
Answer: You will be asked to pay your debt. We will let you know all the details of this payment at a later date.
In a rather voluminous document this message looks almost unnoticeable, but fundamentally changes our usual perceptions of the industry. The fact that investments on the currency market are risky is not a secret for anyone, but it usually ends up Margin Call-om. In all previously written articles on the psychology of trading we used to read about opening an account with an amount that we are ready to lose. Now this amount goes beyond the deposited funds.
Forex.com warns about losses on top of the deposit
Other companies also adopt this rule. For example, Forex.com has already posted on its official website message: "Trading products provided by us with leverage involves the risk of losses greater than the initial deposit.
It looks like brokers are ready to look into our wallets. Alpari (UK) will set precedents, because not all clients will agree to pay debts, which means courts will follow. We continue to watch what is happening in the industry.