FXCM SNB Black Swan lesson learned: Margins increased ahead Italy Referendum


It has been almost two years since the historic SNB event sent the Forex market into despair. One of the bigger casualties at the time was the US giant FXCM. Having the FXCM SNB Black Swan lesson learned, the broker is taking precautions ahead the Italian Referendum. 

2 December, AtoZForex – The Italians will vote this Sunday in a referendum, which many traders believe that it could have a similar impact as the Brexit. The referendum asks voters to approve a convoluted package of reforms to the constitution. These reforms must be put to a nationwide vote by law. The aim is to streamline the government’s decision-making and cut costs.

What is the Italian Referendum commotion all about?

The Italian government insist that the stakes are not comparable to the Brexit vote. However, the polls are leaning towards a “No” vote, which could spark economic and political risks in the entire Eurozone. Prime minister Matteo Renzi has also linked the consequences of a no vote to his career as Italy’s PM. In case of a no vote, he will resign the minute after the referendum outcome.

Considering that the market expect increased volatility after the Italy referendum, what can we expect  this high impact event, AtoZ Forex has reached out to all Forex brokers to inquiry about their risk management. Having the FXCM SNB Black Swan lesson learned, the broker has adjusted temporarily its margins on a number of instruments.  since today, Friday 2nd of December.  and  its is one of the brokers that takes precautions ahead of the Italy Referendum.

FXCM increases temporarily Margin Requirements

FXCM research team: “We will temporarily increase Margin Requirements on select instruments after market close on Friday, 2 December 2016 to prepare for market volatility ahead of the Italian Constitutional Referendum on Sunday, 4 December 2016. We plans to lower margin requirements back to pre-referendum levels as soon as market conditions allow. We urge all clients to proceed cautiously as market moves may be large and unpredictable.”

ProductHistoricDecember 2 – 11:00EST
All GBP Pairs1%2%
All EUR Pairs1%2%
UK1001.00%2%
DAX (GER30)1.00%3%
FRA400.88%1.76%
ESP351.50%3%
EUSTX501.00%2%
BUND0.375%1.00%

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