If you followed our news last week, SaxoBank has already increased their margin requirement in advance of UK referendum on 23 June. As we said, these trend would be followed by other major brokers considering huge volatily and risk pertaining to Brexit.
Here's The Updated List
Most of these following top brokers utilise similar strategy to anticipate Brexit potential volatility, in which they increase their margin requirements (by average of 7%, or 1:14 leverage) to protect their clients:
(list iteration based on alphabetical order)
- CMC Markets: They made two waves of required margin rule changes on June 13th and 20th. The changes are effective to some EU's stock indices and GBP pairs.
- FXCM: They planned to alter their margin requirement for GBP and EUR pairs on June 10th and may increase it further on June 17th.
- IG: Margin will be increased for all GBP pairs on June 10th, June 17th and June 22nd.
- OANDA: Quoted from their update to lower their leverage, To help ensure our customers are more insulated from such movements, we will be temporarily lowering the maximum leverage available on GBP pairs to 20:1 after the market close on June 17, 2016. The affected pairs will return to prior leverage levels after the market close on June 24, 2016
- Trader's Way: Same story as above, Due to these market factors, we have taken the decision to increase the margin requirements for all GBP pairs by a factor of four, with the change being effective from the 13th of June 2016. This means that your leverage on all GBP pairs therefore will be four times lower. E.g. if your account leverage is 1:400, then your effective leverage applied to GBP positions will be 1:100.
These changes to margin requirements were deemed necessary for those brokers considering past event of SNBomb may repeat in similar disasters. Multiple brokerage suffered huge loss from their clients' minus account balance after being hit by huge sudden slippage that went beyond their stop losses.
Remember, those changes are mainly established to ultimately sustain and secure brokerage firms. However, your decision to make entry around Brexit vote should be well measured before sending any orders (especially pending orders) as every risk would be on your own end.