In the highly charged Presidential Elections, the fate of the two candidates who are very different from each other will be decided on the 8th of this month. The markets have their own views as to who would win or lose. The currencies have moved, reacting to the debates between Hillary Clinton and Donald Trump.
America goes to polls on November 8, 2016 and the first results are due to be released at 23:00 GMT on the same day. As the markets have seen the pound stage flash crash even during this illiquid hour of a trading day, brokers are getting ready to face any exigency.
The aim of this article is to provide an update on some of the brokers operating in the market at this juncture:
#1: Exness
Exness said that there will not be any changes to the margin requirements and leverage that are currently applicable to their instruments on the Election Day.
#2: XM.com
The margin required for all positions (for opening new positions and for maintaining existing positions) will be temporarily increased for all instruments on Tuesday, November 8, 2016 starting 8:00 a.m. server time (GMT+2).
* 1% (100:1 leverage) for all currency pairs, gold and silver and
* 4% (25:1 leverage) for all CFDs on equity indices and commodities.
will revert back to normal by Wednesday November 9, 2016 (as per normal client account leverage settings) , shortly after the announcement of the results of the U.S. presidential elections 2016.
#3: Blackwell Global
Blackwell Global said that the margins on some of their selected instruments will be increased from Sunday November 6, 2016 9:00 pm (GMT).
#4: Dukascopy
Dukascopy is expected to reduce the leverage on USD/MXN to 1:10 on Sunday November 6 at 22:00 GMT prior to market opening. The broker noted that this change will remain in force till further notice. The broker will also reduce the leverage on all of the currency pairs that they offer for trading on Tuesday November 8 at 10:00 GMT. The change will be effective in the case of all the over-the-weekend leverage conditions on the trading accounts that have a balance of more than $30,000 or equivalent as at the close of the previous trading day ie. account balance as on November 7. If the accounts with a balance that is equal to or less than $30,000 happen to experience a great deal of increase in equity either due to profit or by way of deposits on November 8, they will be treated on a case to case basis. The reduction in leverage is expected to be cancelled by Wednesday November 9 by 05:00 GMT. If it is required, Dukascopy will prolong the changes. The broker reserves the right to do so.
#5: ETX Capital
As of now, this broker has not revealed any margin changes. However, the broker has announced a new sentiment tool that is powered by big election data.
#6: Forex.com
This broker is thinking in terms of making margin changes. They announced that in view of the election on November 8, markets may experience a great deal of volatility and, therefore, some temporary changes may be made to the accounts of clients. Further, the broker has said that the changes may include, and may not be limited to, updated margin requirements. The changes will be effective during the days that lead to election and continue to be in force even after the vote.
#7: FXCM
According to a statement released by FXCM, the company said that the margin requirements will be brought back to the levels before the election as soon as the market conditions allow them to do so. The thirteen currency pairs offered by the broker for trading will have to comply with a 2 percent higher margin. They include Euro/USD, USD/JPY, USD/CAD and GBP/USD.
#8: FXOpen
This broker has increased margin requirements by as much as 5 times their normal level, without prior notice, starting November 3, 2016.
#9: Hantec
If you are a client of Hantec and your account has a leverage of 100:1, the margin requirement will be 1 percent. Hantec is proposing to increase margin requirements to 3 percent from Sunday onwards.
#10: IG
This broker has already increased the margins for BRL, ZAR, KRW and MXN on Friday November 4, 2016 effective 14:00 GMT. Prior to the NFP, th margin requirements will be increased to 1 percent on major currencies such as USD, JPY, CAD and EUR.
#11: OctaFX
OctaFX has lowered the leverage requirement for indices US30, SPX500 and NAS100 from 1:50 to 1:10 on MT5 trading platform.
#12: Roboforex
RoboForex, regulated by CySEC/IFSC, has announced a different approach. The forex broker warned about the possibility of market volatility during the days before and after the presidential elections in the US. However, the broker has chosen to maintain its current leverage and margin requirements.
#13: Saxo
Saxo proposes to sharply raise margins on Trump-trade currencies: MXN to 15 percent and RUB to 10 percent. Margin for major currencies will be hiked to 2 to 3 percent.
#14: Swissquote
This broker is making tools ready for traders. They have created a variety of forex baskets containing currency pairs that are related to election results.
#15: Alpari – Limits leverage to 100:1
#16: LCG – Limits leverage to 1:100 as of Friday and 1:20 on USD/MXN
#17: Tradeo: Limits leverage to 50:1.
#18: ActivTrades : cut margin 4x.
#19: Trade.Z.com limits leverage to 1:50
#20: Ayondo: Margin limited to 50:1 from 100:1. Announced that guaranteed stops no longer apply.
Final Thoughts
All currencies are likely to experience volatility not only on the election day, but also during the days leading up to election and after the election as well. Therefore, traders should practice conservative trading strategies.