Saxo returns margin requirements to default following US election with the exception of GBP

With the immediate market risk of the US Elections having passed, Saxo today announces that it will be returning margin levels to normal levels, with the exception of GBP pairs. Saxo Bank raised margin requirements well ahead of the US Election to ensure that clients were appropriately leveraged going into what Saxo Bank expected could […]

With the immediate market risk of the US Elections having passed, Saxo today announces that it will be returning margin levels to normal levels, with the exception of GBP pairs.

Saxo Bank raised margin requirements well ahead of the US Election to ensure that clients were appropriately leveraged going into what Saxo Bank expected could be a significant market event. Saxo implemented margin changes last week on products expected to be effected by the outcome of the election, such as some single equity, index and fixed income CFDs, and certain FX pairs. This included for example taking most major FX pairs up to 2%-3% with MXN and RUB going to 15% and 10% respectively.

Claus Nielsen, Head of Markets at Saxo Bank, said: ”We take a dynamic approach to our margin policy by ensuring that our margin requirements correctly reflect the market risks at any given time. Given the prominence of exposure to the US economy in our clients’ trading strategies, we wanted to ensure that our clients took advantage of trading opportunities with responsible leverage around the US Election.

Our Strategy team did point out the likelihood of both Brexit and Donald Trump winning the presidential election – both results not deemed likely by consensus views. When we raised margins ahead of the US elections, we said that analysts might be dismissing Trump’s chances but that the UK’s vote to leave the European Union crystallized a growing anti-establishment mood that should not be underestimated, and could parallel in the vote for Trump. We now look ahead to the Italian Constitutional Referendum on 4 December to see if this sentiment will further permeate through the international political landscape.

Market conditions broadly now allow us to reinstate margins to prior levels, but we will also raise margins on GBP pairs next week to 3% in the lowest notional tier with upward steps to 5% and 7% as position sizes increase. Considering evolving FX market structure and liquidity, including the 07 October GBP ‘flash crash’ as well as noting this week’s announcement by the NFA to take minimum margin levels to 5% on GBP for retail clients in the US, we felt a change was prudent. It is important for us to emphasize that neither Saxo nor our clients benefit from overleveraging and we feel a strong sense of responsibility to our clients and to the market to have margins at responsible levels to support and facilitate disciplined trading.”

  • Read this next

    Retail FX

    Weekly Roundup: FX prop firms switch to cTrader, who moved $1.35B BTC?

    The foreign exchange and cryptocurrency markets are always active, and this past week was no exception. Stay ahead with a selection of essential stories and updates that matter most to market participants.

    Digital Assets

    Bitcoin breaks all records with a massive $1.347 billion transaction

    This transaction has surpassed previous records, setting a new benchmark for Bitcoin trades. Before this event, the largest Bitcoin transactions included a $1.1 billion trade in April 2020 involving 161,500 BTC, and other significant transactions ranging from $491 million to $1.033 billion throughout 2019 and 2020.

    Digital Assets

    Uniswap debuts Ethereum ‘uni.eth’ subdomains

    Decentralized exchange platform Uniswap has integrated Ethereum Name Service (ENS), allowing users to create human-readable domain names and cryptocurrency wallet addresses using .eth endings.

    Web3

    Magic Square Expands with TruePNL Acquisition

    Binance’s web3 app store, Magic Square, acquired token platform TruePNL in a cash deal this week for an undisclosed sum. The deal brings TruePNL’s infrastructure (excluding branding & token) under Magic Square’s wing. Initially seeking a partnership, Magic Square opted for a full acquisition.

    Crypto Insider

    The Future of Prediction Markets? Zeitgeist Launches Decentralized Court System

    Polkadot-powered prediction market protocol Zeitgeist has announced the launch of its latest innovation: a decentralized court system.

    Digital Assets

    Crypto exchange Kraken fires back at SEC lawsuit, claiming overreach

    Crypto exchange Kraken is pushing back against the U.S. Securities and Exchange Commission (SEC), seeking to toss out a lawsuit that accused the platform of operating without proper registration.

    Industry News

    Exness Named a Best Place to Work in 2024

     Global leader Exness, tops in retail trading volume, earns 2024 “Best Place to Work” award, cementing its employee-centric culture after three prior years of winning the Cyprus national title.

    Digital Assets

    Swan Bitcoin taps Bakkt for crypto offering in the US

    “We are thrilled to be taking this exciting step forward in our partnership with Swan. This is just the beginning of our collaboration, as we intend to explore further growth opportunities together in the future, including expansion into international markets.”

    Digital Assets

    Polkadot Awards Bifrost a 500,000 DOT Loan to Enhance Liquid Staking Adoption

    Bifrost, a leader in liquid staking solutions, has secured a 500,000 DOT loan from Polkadot’s treasury to expand the reach and utility of its vDOT product within the ecosystem.

    <