Saxo increases margin requirements ahead of U.S. election

Noam Stiekema

Saxo Bank, the trading and investment specialist, has today announced that it is increasing its margin requirements on certain FX pairs, equity and fixed income products ahead of next month’s US election, which is expected to be a significant market event for investors and traders.

Saxo will implement margin changes on products expected to be affected by the outcome of the election such as some single equity, index and fixed income CFDs, and certain FX pairs. This includes taking most major FX pairs up to 2%-3% with RUB and MXN going to 10% and 15% respectively, while the minimum margin requirement on CFD Indices will be 4% based on market volatility and liquidity leading up to and through the election.”

Claus Nielsen, Head of Markets at Saxo Bank, said: ”We take a dynamic approach to our margin policy by ensuring that our requirements correctly reflect the market risks at any given time.  As we enter the crucial few weeks ahead of the US election, and given the prominence of exposure to the US economy in our clients’ trading strategies, we want to ensure that our clients take advantage of trading opportunities with responsible leverage. The merits of our approach to market-moving events were most recently shown around the UK’s EU Referendum, where we also raised margins and supported clients with relevant information, enabling our clients, in aggregate, to emerge profitably despite the high volatility during and following the referendum result.”

Nielsen added: “We want to support our clients through this period of expected volatility, which is why we gather relevant content on the US election on our website, TradingFloor.com, and seek to ensure that clients are appropriately leveraged. It is important for us to emphasize that neither Saxo nor our clients benefit from overleveraging. Furthermore, we support a wide range of assets on our platform, and a multi-asset strategy is a good way to manage exposure and hedge risk around such geopolitical events as the US election.”

“Although the US election outcome might not create as much volatility as was created by the surprise outcome of the UK’s EU Referendum, there is no doubt that a surprise outcome of the election can create strong volatility, rapid price movements, potential for temporary illiquidity in certain stocks and indices, and to a lesser degree, in certain FX pairs. Analysts may be dismissing Trump’s chances, but the UK’s vote to leave the European Union has crystallized a growing anti-establishment mood that should not be underestimated, and there may be parallels in a protest vote for Trump.  Additionally, the spotlight will soon turn towards Italy where Prime Minister Matteo Renzi takes his Italian Constitutional Referendum to the voters on December 4th which might be even more important for markets than the U.S. Presidential Election.”

Saxo Bank will reinstate default margin rates once market conditions revert to normal.

Saxo Bank’s US election site can be found here: https://www.tradingfloor.com/topics/us-election-2016

Read this next

Digital Assets

Top exec at BitMEX pled guilty US Bank Act violations, pays $150K fine

BitMEX’s head of business development, Gregory Dwyer pled guilty to violating the US Bank Secrecy Act (BSA) and allowing customers to use the platform to circumvent the federal anti-money laundering rules.

Retail FX

CySEC slaps €150,000 fine on FXBFI, operator of 101investing brand

The Cyprus Securities and Exchange Commission (CySEC) today announced that it has reached a settlement with FXBFI Broker Financial Invest Ltd, trading as 101investing, ordering the firm to pay €150,000 for violating the Investment Services and Activities and Regulated Markets Law.

Retail FX

X Open Hub expands multi-asset offering with new cryptocurrencies and indices

X Open Hub, a multi-asset liquidity provider, announced today that it has extended its offering with inclusion of 30 new cryptocurrencies and two emerging market indices.

Retail FX

Interactive Brokers now offers 24/7 access to crypto trading

Interactive Brokers Group, Inc. (NASDAQ: IBKR) has widened access to cryptocurrency trading for its clients. Specifically, the discount broker extended trading hours for its cryptocurrency products to be traded 24/7, including on the weekends.

Inside View

Natural Language Generation for Multi-Language Social Media Strategies 

Natural Language Generation (NLG) is a crucial growth area in the digital landscape, with the unique potential to be used across multiple industries.

Market News, Technology

The B2Core Android App is Now Available For Download

The first version of the B2Core Android app is available for download, and it has many beneficial features for users.

Digital Assets

XBO taps custodian Fireblocks ahead of crypto exchange’s launch

XBO.com has integrated with digital asset and crypto technology platform Fireblocks ahead of the crypto exchange’s upcoming launch.

Industry News

Appital raises another £1.7m after integrating with FactSet, FlexTrade, and TS Imagine

“Appital has a proven track record in securing partnerships with major EMS providers, executing brokers and a trading venue to address the lack of efficiency and control over existing bookbuilding and deal distribution processes.”

Digital Assets

Tim Draper backs crypto-focused asset manager OSD in seed round

“The Old Street Digital team is well-positioned to provide access to a range of research-backed, crypto-based investment funds, and we at Draper Associates are excited to support them.”

<