Brexit Pushes OANDA to Increase Margin Requirements on GBP and EUR Pairs
- OANDA is the first major broker to officially confirm to clients that the Brexit referendum will affect trading conditions.
OANDA is going to increase margin requirements on all pairs that include the British pound (GBP) and the euro (EUR) starting from the 17th of June 2016. The company is one of the established major brokers to update its trading conditions to reflect the possibility of substantial market turmoil running into the 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 referendum.
The margin requirements are going to be increased to 5 per cent on the GBP pairs (1:20) and to 2 per cent on the EUR pairs (1:50). The company is responding to the increasing probability that we could see some major moves on the currency markets in the run up to the referendum.
For its U.S. clients, the company will only increase the margin requirements on GBP pairs to 1:20, as its clients are already limited to 1:50 across the majority of currency pairs, including the EUR/USD.
Back in 2014 a number of firms increased margin requirements on several FX pairs including the CHF, however for many of these this was not enough to prevent them from suffering losses in the aftermath of the Swiss National Bank’s decision to scrap the 1.2000 exchange rate floor from under the EUR/CHF.
Brokers are increasingly likely to hedge their market risks via increased margin requirements into the Brexit polls on the 23rd of June. OANDA has stated to clients that it will return margin requirement to previous levels on the 24th of June.
Another step that could be close is for brokers to look at their trading conditions for major indices. For now none of the firms has addressed the prospective Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term on equities markets. OANDA has advised its clients to make sure that they have enough collateral on their accounts to meet the new trading conditions that will last for about a week.
With the financial markets typically being a relatively reliable discounting mechanism we could yet see another round of announcements by major and minor brokers alike.
OANDA is going to increase margin requirements on all pairs that include the British pound (GBP) and the euro (EUR) starting from the 17th of June 2016. The company is one of the established major brokers to update its trading conditions to reflect the possibility of substantial market turmoil running into the 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 referendum.
The margin requirements are going to be increased to 5 per cent on the GBP pairs (1:20) and to 2 per cent on the EUR pairs (1:50). The company is responding to the increasing probability that we could see some major moves on the currency markets in the run up to the referendum.
For its U.S. clients, the company will only increase the margin requirements on GBP pairs to 1:20, as its clients are already limited to 1:50 across the majority of currency pairs, including the EUR/USD.
Back in 2014 a number of firms increased margin requirements on several FX pairs including the CHF, however for many of these this was not enough to prevent them from suffering losses in the aftermath of the Swiss National Bank’s decision to scrap the 1.2000 exchange rate floor from under the EUR/CHF.
Brokers are increasingly likely to hedge their market risks via increased margin requirements into the Brexit polls on the 23rd of June. OANDA has stated to clients that it will return margin requirement to previous levels on the 24th of June.
Another step that could be close is for brokers to look at their trading conditions for major indices. For now none of the firms has addressed the prospective Volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders Read this Term on equities markets. OANDA has advised its clients to make sure that they have enough collateral on their accounts to meet the new trading conditions that will last for about a week.
With the financial markets typically being a relatively reliable discounting mechanism we could yet see another round of announcements by major and minor brokers alike.