The futures trading arm of prop firm FundingPips will be shut down, the firm announced on Monday morning.
FundingTicks was launched at the start of July last year and appears to have run into trouble in December.
The prop firm was removed from comparison site Prop Firm Match, after it suddenly changed rules and did not compensate existing traders, who were ‘breached’ on the back of that.
“[As] a strategic decision, we are winding down FundingTicks’ operations,” the company said in a statement. “This decision reflects a clear, forward-looking strategy to concentrate resources and attention on areas where we deliver the greatest long-term value to our clients and partners. It enables us to act with discipline, clarity, and responsibility.”
In its statement, the company also said that it is in the process of refunding traders, who paid to take challenges. The firm will also pay out to individuals that were in the funded account stage.
Gold bug
We can only speculate on what the problems at the firm were but it may be a mix of the product and gold trading.
With regard to the latter, futures create more operational problems than CFDs. For example, it is possible to imitate live conditions in a CFD demo account but doing so for futures is much harder.
The other problem is something we’ve looked at a few times, namely that gold keeps going up. Because prop firms have no way of hedging this type of activity, it can create huge liabilities.
