The list of forex brokers that are changing trading conditions in advance to the expected market volatility around the US presidential elections is steadily growing. The latest to announce planned changes are MTrading, Larson&Holz, LiteForex, HotForex, OctaFX, and VinciCM. MaxiFX also said it will certainly increase margins, but provided no details. For details read on.
Larson&Holz to cancel binary options trading
Larson&Holz will introduce a number of precaution measures, including temporary cancellation of trading in binary options and of pending orders in case of fast price changes and gaps. The broker will also restrict the amount of opened positions and total volume of opened deals. As for margins, the broker said minimum required rates may be doubled from 7 November. In addition, spreads may be doubled (or increased even further) and orders on instruments with low liquidity may be switched to close-only mode, depending on the market environment.
Normal trading conditions will be resumed one day after the end of the elections.
LiteForex mulls hiking margins fivefold
The broker intends to increase minimum margin requirements by five times across all trading accounts.
Changes are possible, but will be applied within 7-11 November only in case the market conditions require it. One factor that plays a significant role are the margins provided by liquidity providers. If they change, LiteForex clients will also trade with changed margins.
MTrading is moderate in its changes
MTrading’s temporary margins will come in effect one hour before market close on 4 November until further notice. The broker will offer trading in forex spot instruments at a margin of 1% and spot metals and cash indices at a margin of 2%
HotForex is to wait on the changes
HotForex was not very specific concerning the changes in margin requirements it plans. The broker said it could temporarily increase margin requirements, set instruments to close-only mode, or impose temporary restrictions on the trade volume. Additional changes are also possible. All these measures would, if at all, be taken without prior notice.
OctaFX expands list of instruments with increased margin rate
Initially, OctaFX announced planned changes to the trading conditions for the US30, NAS100, SPX500 indices to 10% in the period 31 October-14 November. Now the broker has decided to add more instruments to the list. From 7 November until 9 November, the broker will increase margin rates to 2% for metals and oil. The new margins will apply across all platforms and accounts. In addition, holders of accounts with balances exceeding $10,000 will trade with margin five times higher than normal.
VinciCM’s new forex margins reach 15%
Leverate-operated VinciCM will increase margins to very high levels. Several pairs will be traded with a margin og 15% – these are USD/MXN, NZD/MXN, MXN/JPY, GBP/MXN, EUR/MXN, AUD/MXN, CAD/MXN, and CHF/MXN. In addition, for the pairs EUR/RUB, USD/RUB and XAU/RUB margins will be set to 10%.
The broker will introduce temporary margins for CFDs on DAX, Xinhua50, and DJXX50 indices to 8.3% and for all other CFDs margins will be 4%. In case of high volatility, instruments may be periodically closed. All above-listed changes will be effective from 6 November.
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 in which he has been involved. Pre-election debates are already affecting the markets. We’ve seen high volatility in many sectors of the financial markets.
A number of other forex brokers will take precocious measures to mitigate the risks – Trading 212, LiteForex, Z.com Trade, GKFX, FXCM, Forex Club, Vantage FX, Dukascopy Bank, MTBankFX , Alpari, IG Group, CapitalIndex, Saxo Bank, Hantec Markets, London Capital Group (LCG), and Blackwell Global. Meanwhile, Forex.com and FXOpen have said they have not introduced margin changes, but it is most likely they will in the near future, while RoboForex and FreshForex have declared no changes are planned.