22 June, AtoZForex – As Brexit referendum is approaching, most of the brokers have adjusted their leverages and margins to mitigate the risks of any sudden shift. Brexit referendum is seen as to have an unexpected impact on the market. As EU referendum is close, some of the retail forex brokers contradictory Brexit messages are appearing on the web.
Forex Brokers’ Brexit risk management activities
While preparing for an event, many brokers have taken some risk management measures. As it appears, retail trading platforms currently are requesting higher amounts of margin on products related to UK equities and sterling from their customers.
AtoZForex team reached out to more than 100 brokers and got some insights on their risk management strategy activities. Many of the contacted brokers worldwide have changed their leverages as well as their margins ahead of Brexit referendum. Also, there are some brokerage firms that left their policies with no changes.
Are brokers sending contradicting messages?
As it appears, there are some retail forex brokers contradictory Brexit messages to their customers in recent days. These brokers have been implementing the risk management activities to prevent any unwanted outcomes as well as promoting the trading opportunities to its clients simultaneously. Some brokers are offering easy money making opportunities.
In the preparation of the EU referendum, the firms are getting ready for the huge volatility. However, there are a large amount of conflicting advertising across Google, Facebook and other platforms. Additionally, some brokers are sending direct emails to their clients inviting them to take risks related to the event.
While the firms’ Brexit risk management activities are in power, the marketing departments of those firms are offering contradicting opportunities to the clients. Furthermore, these brokers are aware of the possibility of putting themselves and their clients under the risk of loss.
EU referendum event triggers doubts in brokers’ plans
Currently, nobody knows what the result of the Brexit referendum on the 23rd of June, Thursday will be. A large amount of the brokers worldwide will get their systems stress tested in the unexplored waters of extreme volatility and low liquidity.
Taking into consideration the current situation and the actual status of the brokers in the market, they should continue to take actions to highlight the risk, rather than the profit opportunities. In order to keep their reputation clear, brokers should focus on the long-term profitability of their customers.
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