Saxo Bank, a Danish multi asset broker, has returned nearly all of its margin requirements to its default levels, following the finality of the US Election, as the group navigated the event without issue, per a company statement.
Leading up to the event itself, several broker including Saxo Bank had implemented margin changes due to the tightness of the race. What transpired was an upset win for Donald Trump, however precautionary measures aided in facilitating a seamless trading session. While Saxo Bank will be restoring original margin requirements, GBP pairs will still be holding onto their altered levels.
Saxo Bank had originally raised a series of margin requirements ahead of the US Election earlier this week in a bid to ensure that clients were appropriately leveraged going into event. The changes were originally levied last week, with margin on select products expected to be affected by the outcome of the election – this included some single equity, index and fixed income contracts for difference (CFDs), and select foreign exchange (FX) pairs.
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In particular, Saxo Bank had hiked margins on most major FX pairs up to 2%-3% with the MXN and RUB going to 15% and 10% respectively. During the election itself, the MXN/USD was one of the most active pairs, given Mr. Trump’s previous stance on Mexico and the potential repercussions of a Trump presidency on the country.
While Saxo Bank is restoring its default margins to prior levels, the group will simultaneously be raising margins on GBP pairs next week to 3% in the lowest notional tier with upward steps to 5% and 7% as position sizes increase.
According to Claus Nielsen, Head of Markets at Saxo Bank, in a recent statement on the margin restoration, ”We take a dynamic approach to our margin policy by ensuring that our margin requirements correctly reflect the market risks at any given time. Given the prominence of exposure to the US economy in our clients’ trading strategies, we wanted to ensure that our clients took advantage of trading opportunities with responsible leverage around the US Election.”
“Our Strategy team did point out the likelihood of both Brexit and Donald Trump winning the presidential election – both results not deemed likely by consensus views. When we raised margins ahead of the US elections, we said that analysts might be dismissing Trump’s chances but that the UK’s vote to leave the European Union crystallized a growing anti-establishment mood that should not be underestimated, and could parallel in the vote for Trump,” he added.