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Old 17.01.2015, 22:56
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In Need of Advice (Huge forex trading loss)

I had a large amount of money placed in a forex trading bank and due to the SNB's recent decision, I saw all that money disappear and my account go into the negatives by more than quadruple that amount. The bank is saying I must pay this amount otherwse it will go to the debt collectors. There is no way no how I can pay it.

Is it worth fighting against the bank? Or file for bankruptcy.
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Old 17.01.2015, 23:00
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Re: In Need of Advice (Huge forex trading loss)

Not sure what the exact transaction is that you did? Option, Forward?
Fighting the bank will be difficult as I´m sure their T&C will have their *** covered.
If it is a specific transaction that does not count as normal banking business you probably have signed something and that should lower your possibilities of suing the bank
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Old 17.01.2015, 23:01
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Re: In Need of Advice (Huge forex trading loss)

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I had a large amount of money placed in a forex trading bank and due to the SNB's recent decision, I saw all that money disappear and my account go into the negatives by more than quadruple that amount. The bank is saying I must pay this amount otherwse it will go to the debt collectors. There is no way no how I can pay it.

Is it worth fighting against the bank? Or file for bankruptcy.
You need to come to a repayment agreement with the bank. Tell them you don't have the money but are willing to pay by instalments with a reasonable interest rate. You can't fight the principle that you owe them money and you don't want to declare bankruptcy.
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Old 17.01.2015, 23:09
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Re: In Need of Advice (Huge forex trading loss)

Trading is hugely risky- can go your way or against you- as in this case. I am sorry you are going through this, but you were very poorly advised about risks.
I'd make an urgent appointment with the most senior person at the Bank to discuss options. Bonne chance.
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Old 17.01.2015, 23:12
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Re: In Need of Advice (Huge forex trading loss)

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but you were very poorly advised about risks.
uhm....why was he?
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Old 17.01.2015, 23:51
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Re: In Need of Advice (Huge forex trading loss)

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uhm....why was he?
because he lost his money more than 5 times over...
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Old 18.01.2015, 00:03
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Re: In Need of Advice (Huge forex trading loss)

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because he lost his money more than 5 times over...
That doesn't mean he didn't know the risks or that he was given bad advice. Huge forex trading companies have gone bust over this, this doesn't mean they didn't know what they were doing.
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Old 18.01.2015, 00:28
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Re: In Need of Advice (Huge forex trading loss)

It may not be the best time to squabble over the quality of the OP's hindsight goggles. S/he needs some advice, ideally from someone who has found themselves in a similarly grim position.

In the UK, a number of Forex companies have gone bust, citing the inability of customers to cover their liabilities. I wasn't sure if the implication was that they wouldn't/couldn't pursue them for the debt. But either way, not much help to the OP if the bank is taking a hard line. As has been said, the best way to deal with any unintended debt is to communicate fully with the other party. There must be many others in your position, so at least you're not alone.

Good luck.
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Old 18.01.2015, 00:38
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Re: In Need of Advice (Huge forex trading loss)

If you sold everything you own and also paid your next two months salary to the bank, would you be able to cover it? If so, do that. If not, file for bankruptcy.
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Old 18.01.2015, 00:40
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Re: In Need of Advice (Huge forex trading loss)

how exactly did you lose that much money? or is the bank asking you to mark to market and take a loss in advance of the termination date of a trade? it would seem really odd for anybody to have been going long on EUR versus the CHF, especially in the short-term, but it might help to know more regarding how the debt to the bank arose / will arise.

it won't help you, but I unfortunately live in Euros and had mentioned to my wife the prior evening over dinner that we should think about moving some of our EUR money into our CHF account for a while. too bad for me that the SNB moved before lunch the next day and I am still kicking myself, especially since I have accounts in the US and so would have made money on the CHF coming and going. basically I suck.
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Old 18.01.2015, 00:47
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Re: In Need of Advice (Huge forex trading loss)

If you have to go bankrupt then do it in UK they have the "best" rules.

Otherwise can you change your name and go into never never land??
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Old 18.01.2015, 00:53
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Re: In Need of Advice (Huge forex trading loss)

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In the UK, a number of Forex companies have gone bust, citing the inability of customers to cover their liabilities. I wasn't sure if the implication was that they wouldn't/couldn't pursue them for the debt.
Insolvency occurs when a company can't pay their liabilities as they fall due. So even if they recovered everything from clients (which they won't), the recovery would still be in the framework of insolvency because the companies don't have the money to pay the bills.
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Old 18.01.2015, 01:04
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Re: In Need of Advice (Huge forex trading loss)

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I had a large amount of money placed in a forex trading bank and due to the SNB's recent decision, I saw all that money disappear and my account go into the negatives by more than quadruple that amount. The bank is saying I must pay this amount otherwse it will go to the debt collectors. There is no way no how I can pay it.

Is it worth fighting against the bank? Or file for bankruptcy.
Have you actually contacted the bank in regards to your dwindling balance?
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Old 18.01.2015, 01:29
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Re: In Need of Advice (Huge forex trading loss)

Lesson learnt: if you gamble, you may lose.
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Old 18.01.2015, 01:36
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Re: In Need of Advice (Huge forex trading loss)

I'm curious as to how you can lose 5x the amount you had in the account, for some kind of currency trade. I'm quite naive about these things. My excitement was to try 3 ATMs in Basel today to find all of them had no Euros left. I didn't need to buy anything from over the borders so will wait until I'm next in France or Germany (if those ATMs all have no Euros I know there's trouble!).
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Old 18.01.2015, 01:37
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Re: In Need of Advice (Huge forex trading loss)

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Insolvency occurs when a company can't pay their liabilities as they fall due. So even if they recovered everything from clients (which they won't), the recovery would still be in the framework of insolvency because the companies don't have the money to pay the bills.
Thanks, that makes sense. The statement I heard from one of the companies was that multiple customers had inadequate funds in their accounts to cover their personal losses, and the liability therefore passed to the company, who were unable to cover the debt -- so they necessarily had to declare themselves insolvent. Sounds like the OP's additional bad luck might have been to have a Swiss bank as the intermediary, who could afford to pay the debt.
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Old 18.01.2015, 02:13
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Re: In Need of Advice (Huge forex trading loss)

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I'm curious as to how you can lose 5x the amount you had in the account, for some kind of currency trade. I'm quite naive about these things. ....
I'm no expert either, but I'm guessing it must have been some sort of leveraged punt, similar to spread betting, where you gain, or pay, so much per unit above or below a nominated point. Presumably, normal currency fluctuations wouldn't present a big risk but the events of this week were in a different league.
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Old 18.01.2015, 02:17
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Re: In Need of Advice (Huge forex trading loss)

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I'm curious as to how you can lose 5x the amount you had in the account, for some kind of currency trade. I'm quite naive about these things. My excitement was to try 3 ATMs in Basel today to find all of them had no Euros left. I didn't need to buy anything from over the borders so will wait until I'm next in France or Germany (if those ATMs all have no Euros I know there's trouble!).
Forex trading works with a leverage. Typically 20x or 50x.
In simple terms, 1% change (gain/loss) equals 20% or 50% gain/loss.

with a sudden jump of 17%, the loss may be astronomical. Typically the trading platform should react and close your position at the very moment your balance reaches zero but what has happened is not typical.
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Old 18.01.2015, 03:39
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Re: In Need of Advice (Huge forex trading loss)

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Forex trading works with a leverage. Typically 20x or 50x.
In simple terms, 1% change (gain/loss) equals 20% or 50% gain/loss.

with a sudden jump of 17%, the loss may be astronomical. Typically the trading platform should react and close your position at the very moment your balance reaches zero but what has happened is not typical.
Trouble is when you have have a move like this the whole thing accelerates and stop losses are useless. The min a tradable asset is subject to bad news and the price goes down by more than 10% then automated systems kick in and try to sell - unfortunately there will always be very few buyers around and the loss will accelerate until the buyers sense a bargain and step in. GBPCHF actually hit 0.87 on a tick basis which gives an idea of how low it can go. Now for the really sad bit is that anyone who had a stop loss or had their account called automatically will actually be sold out almost instaneously and will normally get the worse possible price ie 0.87 despite the fact that 5-10 mins later the loss has reduced in half and continues to recover for a while. It amazes me how naive people can be about stop losses and assume that they have limited their losses to a known value. You have been warned.
In the op case he should take professional advice immediately. It may be that he was advised badly or the sell out was not transacted to his best interests etc etc.
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Old 18.01.2015, 12:11
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Re: In Need of Advice (Huge forex trading loss)

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If you sold everything you own and also paid your next two months salary to the bank, would you be able to cover it? If so, do that. If not, file for bankruptcy.
Seems to be a lot of thinking behind that, Phil. Can you elaborate a bit? I'll be grateful for the education.
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