cTrader helps brokers navigate volatile Brexit period

Just over two weeks is all that remains before the citizens of the United Kingdom cast their votes as to whether the nation in which they reside should remain a member state of the European Union, or whether it should go it alone as an independent sovereign nation.

Many retail FX brokerages and liquidity providers are taking prudent action in order to ensure the security of their clients trading environments, whether retail customers or brokerages taking liquidity, and are raising margin requirements on GBP and EUR pairs, as well as predicting that many customers will avoid trading at the period during the referendum itself until votes are cast, and the volatility subsides somewhat.

Platform providers also consider Brexit risks – allows brokers to adjust margin requirements per group or symbol

Today, FinanceFeeds spoke to James Glyde, Business Development Manager at Spotware Systems, which develops the cTrader retail multi-asset trading platform, who explained “We have recently released some new functionality in cServer/cBroker in preparation which allows brokers to change margin requirements per symbol and per group to both open positions and/or new positions. cBroker is incredibly intuitive, such settings can be shared and applied to hundreds of groups in just a few clicks making their risk management seamless at this time.”

“”The flexibility means that the broker doesn’t just change GBP crosses for all clients to 2% they can change this to; for example 4% for certain groups used for traders with balance in excess of $100,000 and 5% for groups used for traders with  a balance in excess of $200,000” explained Mr. Glyde.

“Also, cBroker is incredibly intuitive, such setting can be shared and applied to hundreds of groups in just a few clicks” he said.

With this approach, brokerages wishing to make provision for potential volatility can do so with very little input required, and those wishing to ensure that their policy of increasing margin and safeguarding clients can be easily implemented can consider the functionality being provided by their software vendors.

Today’s economic and commercial landscape is considerably different to that of 44 years ago. Britain is a financial powerhouse, home to the largest interbank FX trading center in the world by a considerable margin – just 6 banks, all located in Canary Wharf in East London, account for over 46% of all global interbank FX order flow, and the City of London is an ultra-modern, highly technologically advanced financial powerhouse, hosting the majority of the institutional FX companies and prime of prime brokerages which power the non-bank electronic trading industry for the entire world.

Britain’s pound is the most highly valued currency in the world by a considerable margin, and has been for many years and as Britain is such a vital part of the financial and electronic trading landscape, its future as a member state of the EU is a very important matter for the financial markets globally.

Indeed, the outcome of the referendum is just a short time away, however it is reassuring to see the risk management measures being implemented by brokers and vendors alike.

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