Spread betting and foreign exchange platforms were rushing to regain their positions after the Swiss franc’s soaring movement last week.
Bidders are aligning themselves through the books of Alpari, which is a Russian-owned spread better which crashed last week as the franc’s movements wiped out some clients and drained the firm’s liquidity. It lost approximately $45 million on the movements.

Although the losses fall to clients, betters trade on margin efficiently being forced credit by Alpari. When losses exceeded the capital placed up front, the platform was hence caught out.

Alpari initially told its customers that it had entered insolvency, but later released a secondary statement maintaining other options were still available.

For the avoidance of any doubt and notwithstanding previous announcements by the company, Alpari Limited has not yet entered into a formal insolvency process.

From a contrasting standard investment in currencies, spread betting clients can actually loses more money than what they previously put in. In fact, some highly leverage clients at Alpari lost out on the franc movements with losses topping at far higher than the capital they had previously invested.

As a result, Alpari was hit largely by their losses and got into much difficulty, but even clients who were not trading the franc have been hit as they have been frozen out of their respective Alpari accounts.

Possible bidders include ETX Capital, FXCM and SpreadCo were bailed out by their parent company Leucadia just last week after it suffered a tight squeeze.

The same is looking at Alpari, but won’t be bailed out anytime soon. If the firm becomes insolvent, it will be looked upon at client lists and assets to see if they are appropriately priced.

However, any such sale would have to take place much quicker should Alpari shuts down for any more than a month. Fears include clients not having anymore movements to other platforms which reduced the value of their respective assets.

Similarly, ETX did have a history of purchasing client lists, it was able to garner 10,000 clients by acquiring Shelbourne Markets in the middle of 2014. Moreover, FXCM is also a contender to purchase out Alpari, it was hit by the same crunch after losing $225 million. Its parent company Leucadia injected $300 million which could allow the bulk up by the purchase of the said firm.

Britain is regarded as the major centre for spread betting, in part since it does not have tight regulations on margin. In the U.S., traders have to place capital up front worth at least 2 % of their overall exposures, leveraging themselves by a factor of a 50-to-one.

In Japan, the limit is just 25-to-one and in the U.K. there is no limit, therefore firms decide how much to offer based on clients’ creditworthiness. Alpari provided up to 500-to-one but did not have the capital buffers to cope with the shock losses.