Admiral Markets to Reduce Leverage Surrounding Brexit Vote

Brokers are yet again having to prepare themselves for a Brexit Brexit Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Brexit stands for British Exit, or in reference to the United Kingdom’s decision to formally leave the European Union (EU) as declared in a June 23, 2016 referendum. In a more immediate sense, a tight vote and unexpected result helped drive British pound (GBP) to lows that had not been seen in decades.The day following the referendum, former Prime Minister David Cameron resigned from office where he was replaced by Theresa May, who later resigned from office on June 7th, 2019. Active Prime Minis Read this Term-related issue. Admiral Markets, a multi-regulated FX and CFDs brokerage firm, announced this Thursday that it would be making temporary changes to its trading terms for professional clients surrounding the upcoming Brexit vote.

On January 15, 2019, the United Kingdom Parliament is scheduled to vote on the Brexit agreement. If this feels like déjà vu, that’s because the original vote was expected to take place on December 11, 2018.

Back in December before the initial vote date, many brokers such as Dukascopy, Saxo Bank and FxPro all announced leverage restrictions set for the vote. However, with the vote canceled, brokers have to do it all over again.

Starting from 9:00 am (EET) on January 15, 2019, until midday the next day, Admiral Markets will reduce the maximum leverage available to professional clients on selected contracts for difference (CFD) instruments.

For foreign exchange (forex) and selected commodities, leverage will be reduced to 1:200. All currency pairs except for Czech koruna and Russian ruble will be subject to the cap along with Gold, Silver, WTI, Brent, XAUUSD-ECN, XAGUSD-ECN and XAUAUD-ECN. Leverage on indices and select futures-based instruments will be limited to 1:100.

Retail clients who trade with leverage rates of 1:30 or lower will not be subject to the changes, the broker highlights. Furthermore, they will be covered with unconditional negative account balance protection. Negative balance protection, however, does not apply for professional traders in abnormal market conditions.

Admiral Markets: Watch out for GBP trading

Admiral Markets also advises traders to be careful in the lead-up to and the aftermath of the vote. Clients should be particularly aware of increased volatility in British pound (GBP) based CFDs and currency pairs containing the GBP. Markets might also be impacted by limited Liquidity Liquidity The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent The term liquidity refers to the process, speed, and ease of which a given asset or security can be converted into cash. Notably, liquidity surmises a retention in market price, with the most liquid assets representing cash.The most liquid asset of all is cash itself.· In economics, liquidity is defined by how efficiently and quickly an asset can be converted into usable cash without materially affecting its market price. · Nothing is more liquid than cash, while other assets represent Read this Term, resulting in much wider spreads.

With the expected Brexit vote just days away, similar steps are likely to be taken by other brokers in an attempt to reduce the fallout from a Brexit vote. Following the big vote back in June of 2016, brokers struggled to meet their customers’ demands as there was a squeeze on liquidity.