Forex broker Alpari said on Monday it is joining the list of peers offering temporary trading conditions around the US presidential elections, while Vantage FX is considering the same move, but for now is waiting to see how the markets will react to the outcomes.
Alpari will introduce different temporary margins for the different account types it offers for the 7-11 November period. The new maximum margins will range from 50:1 to 100:1. In addition, the strategies “Touch” and “Spread” may be unavailable for binary options trading.
The broker noted that instruments could be set to close-only mode in case of highe market volatility and low liquidity.
Following are the temporary margin requirements Alpari will offer cliemnts:
- For standard.mt4 and pamm.standard.mt4 accounts – the maximum floating leverage will be 1:100;
- For ecn.mt4, pamm.ecn.mt4, pro.ecn.mt4, pamm.pro.ecn.mt4, ecn.mt5, and pamm.ecn.mt5 accounts – the maximum floating leverage will be 1:50;
- For nano.mt4 accounts – the maximum order size will be 10 lots and the maximum leverage will be 1:100;
- For standard.mt4 and nano.mt4 accounts – the Limit & Stop Levels will be stablished equal to two spreads.
Vantage FX also said it expects high market volatility and poor liquidity, resulting from the US elections. It warned it may increase margins and move instruments to close-only mode for key instruments.
“This could even come in the form of raising margins on hedged positions to protect from Liquidity Risks,” the broker noted.
The broker will notify traders in case changes in trading conditions are introduced.
The US presidential elections will take place on 8 November, 2016. The main candidates to win the elections are Democratic nominee Hillary Clinton and her Republican rival Donald Trump, against whom many high-profile republicans have turned their backs on due to the numerous scandals and blunders he has been involved in. Trump is currently one percentage point behind Clinton in the latest polls, making the markets even more uncertain.
Last week, Dukascopy Bank announced temporary leverage for all forex pairs traded via accounts with balance exceeding $30,000. IG Group and CapitalIndex will increase margin for certain forex and contracts for difference (CFDs). Saxo Bank will also increase the margins for some forex pairs and single equity, index and fixed income CFDs, while OctaFX will reduce the maximum leverage requirements for the US30, NAS100, SPX500 indices to 10:1 from from 31 October until 14 November.
Meanwhile, Forex.com, a brand of US group Gain Capital, and FXOpen said they have not introduced margin changes, but it is most likely they will in the near future. Blackwell Global has also said that it will announce new trading conditions in the first week of November.
In the context of the heated debates between the two main presidential candidates, Swissquote Bank launched baskets with forex instruments that it expects will be most highly affected if either Clinton or Trump wins. It has also made available to clients a predictive analytics tool to facilitate their trading choices concerning instruments potentially affected by the outcomes of the US elections.