Seems you are right feucht:
http://www.forexfactory.com/news.php?do=news&id=521891
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FYI re yesterday's irresponsibilty of SNB amateurs.....
Really Bad News for West Ham Jazz Fans Trading FX
from Adrian Ash
Head of Research, BullionVault - London
PEOPLE sometimes ask why BullionVault doesn't let its users post 'stop-loss' orders.
Today's bloodbath in FX bookmakers shows one good reason why not.
We don't want to go bust.
You see, football fans, music lovers, and especially currency speculators will all suffer from this morning's news that Alpari UK...a major currency spread betting 'broker'...is now insolvent.
That firm, according to its press releases, was doing $200 billion per month in currency bets with 'retail' punters at the end of 2014.
Flush with cash, and sponsors of West Ham United, it extended its sponsorship of Jazz FM Radio only yesterday...news which broke Friday morning.
Right at the same time, however, Thursday's huge swing in the Swiss Franc saw "the majority of clients sustaining losses exceed[ing] their account equity," Alpari said today.
And "Where a client cannot cover this loss," the currency betting shop explains, "it is passed on to us."
What are the odds on the UK's Treasury Select Committee holding a hearing within the next month? Spread-betting firms' capital cushions are certain to become much bigger after the inevitable new regulations than they were when it mattered...ie, before yesterday.
Thursday blew out not only Swiss Franc trades, but lots of other markets too. Hence this morning's insolvency...plus pain, losses and perhaps more failures across the leveraged betting markets.
Such companies...like all good brokers...tend to offer "guaranteed stop-losses" to clients. For an extra fee, this means the broker will close your bet at a pre-determined price. So if the asset you're betting on sinks in price, your losses will be limited.
Thing is...and ignoring the 'leveraged' size of whatever hit you suffer anyway...those losses must be worn by someone. In action as violent as Thursday, that someone will in the end be your broker.
At a guess, lots of spreadbetting bookies automatically closed out their clients' stop-loss orders in the Euro/Swiss Franc currency trade on Thursday. It sank 40% in 30 minutes according to 'spot market' data feeds.
Because the actual currency market did zero business at those lows, however, the bookmakers couldn't trade out of their own positions...needed to 'hedge' (ie, protect themselves) against the cost of meeting those client stop-loss orders.
Put aside the fact that 'stop-loss' orders all too often invite brokers to "fill, drill and kill" retail punters...letting them get into a trade, only to take them straight out because their stop-loss limit is touched.
Price risk cannot be abolished. Someone must be on the hook. And if you think that someone isn't you, then the credit-default risk to your money is probably very much greater.
