Forex brokers Hantec Markets, London Capital Group (LCG), and Blackwell Global have become the latest brokers to announce the introduction of temporary margin requirements for trading around the US presidential elections. Meanwhile, Swiss forex bank Dukascopy Bank said it will hike margins on more instruments than it initially announced.
Hanec Markets to hike margins by times due to LP conditions
Hantec Markets will introduce temporary margins from 6 November across all instruments, regardless of the type of trading account investors use. For currency pairs, margins will be increased threefold, while all indices and commodities will be traded with doubled margins. The broker said high margin is required since many of its liquidity providers are increasing their margin requirements across the board on all instruments.
Hantec Markets did not disclose when it will resume to normal trading conditions, but it said it aims to do it soon after the electionresults are announced. However, it noted that the decision is closely dependent on the market liquidity and the margins provided by liquidity providers.
Dukascopy Bank to cut margin on index CFDs in addition to already-announced forex instruments
Dukascopy Bank it has taken additional measures to offset any possible risk that could result from the market reaction to the upcoming US presidential elections. The broker will increase margin rates on all contracts for difference (CFDs) on indices to 10%, starting 7 November. The temporary trading conditions will remain in place until further notice.
The bank announced earlier it is cutting to 10% the margin on the USD/MXN pair for accounts with balance of more than $30,000 with the opening of the markets on 6 November. It said at the time, on the day of the elections holders of such accounts will trade in currencies with a leverage lowered to the level of the over-the-weekend leverage conditions the bank offers.
LCG’s temporary trading conditions to affect different markets
London Capital Group (LCG) will change margins on select forex and CFD instrumetns only. Temporary trading conditions will be into effect from 4 November until further notice.
The changes will affect foex majors, as well as some minors. The USD/MXN pair will have a minimum margin of 5% and all CHF crosses will be traded with a margin of 2%. The majority of USD currency pairs, however, will have a margin of 1% – these are EUR/USD, USD/JPY, GBP/USD, AUD/USD, USD/CAD, and NZD/USD.
For non-forex instruments, new margins will be introduced for indices, binds, equities, commodities, metals and energies. Following is a list of the trading instruments and their new minimum margin requirements:
- 1% margin – Non-US global Indices; US Bonds; US Crude & Brent Crude; Gold;
- 2% margin – US Indices; Silver;
- 10% margin – US Equities
Blackwell Global’s new margins cover many instruments
Blackwell Global will increase margins on major, minor and exotic currency pairs on 6 November 0900 pm GMT. The temporary margins will be into effect until further notice and may be further changed, if necessary.
Margins will be doubled for precious metals (XAG/USD and XAU/USD), as well as for majors (AUD/USD, EUR/USD, GBP/USD, NZD/USD, USD/CAD, USD/CHF, and USD/JPY). For other select currency pairs (listed below) margins will be increased by three times.
- EUR/CAD, EUR/CHF, EUR/GBP, EUR/JPY, EUR/NOK, EUR/NZD, EUR/SEK, EUR/SGD, EUR/TRY, EUR/USD
- GBP/AUD, GBP/CAD, GBP/CHF, GBP/JPY, GBP/NZD, GBP/USD
- USD/CAD, USD/CHF, USD/CNH, USD/DKK, USD/HKD, USD/HUF, USD/JPY, USD/MXN, USD/NOK, USD/PLN, USD/SEK, USD/SGD, USD/TRY, USD/ZAR, NZD/USD
- NOK/JPY, NOK/SEK, SGD/JPY
- NZD/CAD, NZD/CHF, NZD/JPY
Select CFD instruments will also be traded at temporary conditions:
- CFDs with doubled margin – AUS200, DE30, ES35, STOXX50, F40, HK50, JP225
- CFDs with tripled margin – UK100, US30, US100, US500, USOil, UKOil
Other brokers have also announced temporary trading conditions:
The three above-mentioned forex brokers are part of a long list of brokers that will apply temporary margins ahead of the US elections.
- Vantage FX will hike margins on forex, commodities and indices (minimum margin of 3% for currencies)
- Dukascopy Bank and MTBankFX will increase margins on all forex instruments for accounts with more than $30,000 in balance (USD/MXN will be traded with 10% margin), In addition, Dukascopy Bank will also increase margins for index CFDs to 10%,
- Alpari will have new margins for the different account types it offers, ranging from a minimum 2%-10%
- IG Group and CapitalIndex will hike margins twice ahead of the elections. IG Group will introuce changes for select forex, index and metal CFDs and minimum rates will vary from 0.75%-10%. CapitalIndex will hike margins for nearly all instruments first to 2% and then to 4%
- Saxo Bank will increase the margin rates for forex majors (to 2%-3%) and RUB (to 10%) and MXN (to 10%) crosses, as well as for some index CFDs (to 4%)
- OctaFX will reduce the minimum margin requirements for the US30, NAS100, SPX500 indices to 10%.
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.
In addition, forex broker MaxFX announced a 50% bonus (up to 5,000 base currency units) on client deposits of at least 200 base currency units.
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.
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.