Currency Exchange Risk, Sharewatch/FXCM

[aliaslinden]

I'll try to keep this brief. In late 2011, I bought some Apple stock via Sharewatch. Soon after I bought Nokia stock. The process involved several phonecalls from the FXCM people behind Sharewatch to set up my account during which I asked them to clarify any fees I would have to pay beyond the once off transaction.

I was happy to go ahead so I transferred the funds into my FXCM account from my BOI account. Each time once the funds showed up in the FXCM account I completed the transactions.

What I didn't find out until late 2012 was that FXCM did not automatically convert funds from euros to dollars when I transferred the money into the account. So, as far as I understand, even though the funds showed up, what actually happened when I purchased the shares with "my" money was that FXCM bought the stocks in credit for me and didnt actually use my money at all.

They were then charging me interest on this credit, something I didn't know about for months, and I also lost quite a lot due to my euros being dormant and their weakening against the dollar in that time, so that when I eventually was informed they hadn't being converted and i had to convert them to settle the debt, they were worth a lot less.

Sorry about the length. Clearly, in a bit over my head. Would love some help.

 

[Rory Gillen]

The lesson of the story, regrettably, is that you do need to understand how to operate a particular online account before using it. Online brokers are cheap for a reason in that they offer very little assistance and you are expected to know the mechanics yourself or at least to make your own enquiries.

 

[aliaslinden]

Entirely forgot I posted this. Thanks for the reply Rory. Yeah, I thought that it might just be me being too ill informed. It was a learning experience. Also, makes me realise that buying stocks shouldn't really be undertaken as a regular consumer without professional help?