[B]Leucadia National Corporation and FXCM Announce $300 Million Financing to Permit FXCM to Continue Normal Operations[/B]
NEW YORK–(BUSINESS WIRE)-- Leucadia National Corporation (NYSE: LUK) and FXCM (NYSE: FXCM) today announced that Leucadia would be providing $300 million in cash to FXCM and its subsidiaries (collectively “FXCM”) that will permit FXCM to meet its regulatory-capital requirements and continue normal operations after yesterday’s loss of $225 million due to the unprecedented actions of the Swiss National Bank. Under the terms of the agreements, Leucadia is investing $300 million in cash into FXCM in the form of a $300 million senior secured term loan with a two-year maturity and an initial coupon of 10%. The term loan obligations are guaranteed, on a secured basis, by certain of FXCM’s domestic subsidiaries. In addition, Leucadia will receive, in the event of a sale of FXCM or its subsidiaries, a certain percentage of the sale proceeds and, in the event FXCM makes other distributions on account of its equity, a corresponding payment for its own account. This transaction is expected to close this afternoon. Drew Niv, Chief Executive Officer of FXCM, stated: “We could not be more grateful to Leucadia and its team for their rapid and effective response and to our regulators, who have been willing to work with us through this challenging process. Leucadia’s support and this financing are by far the best alternative for FXCM, our customers, our shareholders, and all other relevant constituencies. We are pleased to continue to act as the leading online provider of foreign exchange trading and related services to retail and institutional customers worldwide.”
Good news indeed. Just hope leverage will remain as it is as messing with it would be like putting a bandaid on an open cancerous sore. What leverage has to do with traders and brokers losing access to the “free market” to close orders is completely beyond me.
I pray that they don’t preclude the little guy from having access to this so called free market. And please don’t “protect me from myself”.
…That said, more education concerning trading fx for the uninitiated is wholly welcome by me.
If traders think that SL levels should be respected, then TP levels need to be respected also. That should mean that FXCM should legally be allowed to use TP level to pair floor level gains in accounts , to off set SL that were not trigger and to bring accounts to zero if account were negative. As TP to floor level could be as much as 75% of the range of 1.1750-1.1050, there should be enough to cover all cost.
I would also like to add had brokers not frozen accounts, you would not have this range area were SL and TP were not allowed to be triggered. They would of been triggered with far less slippage. If you have a price range in a pair that has been frozen, nothing will happen in that range and that is why you have the huge skip in price.
