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Delta Trading Systems
Suite 50
10 College Terrace
London
E3 5NA Objection to a direct mailing that was headlined "OUR 100% TRADING STRATEGIES GUARANTEE THAT YOU WILL NEVER SUFFER A LOSING TRADE - EVER!"
The mailing stated " We guarantee to show you exactly how you can trade any market, index, stocks, bonds, currencies, commodities, Etc., ... once you place a trade it will be impossible for you to lose a single penny you make profits when you are right and lose absolutely nothing when you are wrong". The mailing listed three trading strategies: one to be used when the market was expected to move up; one when the market was expected to go down; and one when the market could move in either direction; all three were described as providing protection from any possible loss. The mailing continued "we are offering you a guaranteed way to trade with zero risk you can profit, regardless of market direction, as each strategy has unlimited profit potential It takes us about 15 minutes each weekend we used to trade every day All 3 strategies are single ticket trades, placed at the same time". The mailing then promised two offerings, one of which was a ‘GP' strategy, and stated "With these strategies every single trade is absolutely GUARANTEED TO MAKE A PROFIT, regardless of the market direction. That's right, profits are 100% guaranteed on every single trade made" The complainant: 1. challenged the claim that users were guaranteed to make profits; and
2. questioned the claim "Latest trade - over £750.00 profit per contract in less than one week, with absolutely no risk of loss". Codes Section: 3.1, 7.1, 54.5 (Ed 9)
Adjudication:
1. Complaint upheld The advertisers argued that they had not claimed their trading strategies were guaranteed to make a profit; their claim was that they guaranteed to show users how to trade without ever suffering a losing trade. They explained that the only reference to profit was that their strategies had unlimited profit potential. The advertisers explained how the ‘GP' strategy and the other three strategies worked. The Authority considered that claims such as "lose absolutely nothing when you are wrong", "we are offering you a guaranteed way to trade with zero risk... (and of course you will never be risking a single penny...)" and "with these strategies every single trade is absolutely GUARANTEED TO MAKE A PROFIT", gave readers the impression that they could not lose money. The Authority took expert advice and understood that, although a carefully constructed derivatives strategy could help minimise the risks of investing, it was not possible to guarantee that readers would never have a losing trade while simultaneously having unlimited profit potential. 2. Complaint upheld The advertisers explained that they updated their mailing regularly and their newest mailing claimed a strategy trade in the American T-Bond market of $640 profit in three weeks. They sent a graph and two computer screen print-outs to support that claim. They also sent graphs that they believed showed they had made a profit of £750 in a week. The Authority accepted that the advertised strategies minimised the risk of trading losses. It did not, however, accept that risk of loss was always nil: that would depend on the pattern of premium and discount of the derivative market trades. The Authority noted the advertisers had excluded brokers' fees from the no-risk-of-loss promise. It acknowledged the advertisers had sent two charts to support the latest trade claim but noted the advertisers had neither explained the charts nor demonstrated that the trade had taken place before the outcome was known and had generated the claimed profit "with absolutely no risk of loss". The Authority was told that the advertisers had stopped trading. It nevertheless concluded that the advertisers had neither justified the implication that they could ensure unlimited profit and the avoidance of loss nor substantiated that they had made over £750 profit in less than one week without risk of loss. The Authority advised advertisers of similar products to word advertisements with help from the Committee of Advertising Practice Copy Advice team and the Financial Services Authority and to hold convincing documentary evidence for claims about profit. |
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