Saxo Bank’s Claus Nielsen looks at trading the Brexit period; reaffirms position on leverage

Saxo Bank Head of Markets Claus Nielsen examines how to trade the Brexit period, and how Saxo Bank carefully assessed the advent of the referendum.

Saxo Bank

One of the most astute companies in the industry, Saxo Bank, took very comprehensive measures during last week in order to ensure a stable position through the potential volatility that could have ensued following the results of the referendum in Britain yesterday in which the British public voted on the country’s membership of the European Union.

Today, Claus Nielsen, Head of Markets at Saxo Bank has explained the company’s perspective on trading through the immediate period following the results of the referendum


“Going into the UK referendum we have considered it important to take prudent measures to reduce our clients’ exposure to risk and to be fully transparent. It has been essential for Saxo Bank to explain to our clients that neither clients nor Saxo Bank benefit from overleveraging and that we, with our clients’ interest firmly at heart, are doing our utmost to educate on the range of options available” said Mr. Nielsen.

“This has proved to be the right decision as our numbers show gains for our clients despite the volatility in both FX markets and Asian equity markets. The German DAX index was down 10 % at open and we expect further volatility on European stock markets today and continue to recommend clients to be cautious in this environment” he continued.

“We definitely led the way by being transparent and prudent in regards to increased margins and looking at the performance of our clients, it was the right decision. We are content with the current margins and continue to monitor volatility closely” concluded Mr. Nielsen.

In the advent of the referendum, Mr. Nielsen explained to FinanceFeeds that trading unleveraged options is a potentially safe asset class to look at during times of such high potential volatility due to a geopolitical event of this magnitude.

“We are offering our clients full transparency on the temporary increase in margin requirements for GBP. We have been monitoring the implied volatilities traded in the FX Options market over the past 2 months which have led us to the conclusion that a Tier 1 margin level for GBP of 7% is rational and quantitatively fair” said Mr. Nielsen earlier this week.

“We are applying the same analysis methodologies when looking at equity-related products, specifically CFDs on UK stocks and indices, and will be applying an 8% margin on UK100 and UK250MID” he continued.

“Going into an event of this magnitude with less than a 5-7% margin requirement on any UK margin instrument does not seem responsible to us and gives the retail client a wrong impression of the underlying volatility and risk” said Mr. Nielsen

“I am glad to note that we were one of the first to announce such changes and have informed clients well in advance of the event. As soon as market conditions allow it, we plan to return margins to their normal levels” he said.

Indeed, prudent planning of this nature has most certainly proven to be a very sensible path indeed.

Photography Copyright FinanceFeeds

Read this next


SteelEye tries ChatGPT for market surveillance

This capability can be used as a starting point for initiating a surveillance investigation and to standardize workflow processes to boost the throughput and consistency of cases. It is also useful when analyzing communications in foreign languages, as the system returns the above insights in English regardless of the languages being used.

Industry News

SEC charges ex-Morgan Stanley advisor of NBA players after $13m fraud

Darryl Matthew Cohen was arrested this week and is facing three different federal counts of fraud, which could amount to 20 years in prison if convicted, besides the SEC complaint. 

Industry News

AWS FinTech Africa Accelerator launched, applications until April 27, 2023

Founders will be offered tech resources, expert guidance, and a global network of industry leaders, technologists, entrepreneurs, investors, associations, and partners, in order to build their fintech products. 

Industry News

Interactive Brokers pays unmatched interest up to USD 4.33% on cash balances over $10,000

For clients of Interactive Brokers, interest accrues daily, and payments are posted on a monthly basis. Interactive Brokers’ cash management is integrated into client broker accounts, making it simple to earn interest and borrow at the lowest rates without transferring cash.

Retail FX

FP Markets adds cTrader to roster of trading platforms that include MT4, MT5, Iress

“Our market share swings towards the more sophisticated segment of traders and we have been inundated with requests for an additional platform with more institutional-style characteristics. The addition of the cTrader trading platform offering allows our clients the choice to further shape their trading experience with us.”

Digital Assets

SEC mulls lawsuit against Coinbase’s staking and spot trading

Shares in Coinbase fell 15 percent after the US Securities and Exchange Commission threatened a potential enforcement action against the crypto exchange over certain products.

Digital Assets

Kraken halts ACH transactions amid banking crisis

San Francisco-based cryptocurrency exchange Kraken says it will no longer process Automated Clearing House (ACH) following the failure of its payments partner, Silvergate Bank.

Digital Assets

French influencers face two years in jail for promoting crypto products

France’s National Assembly’s Economics Committee voted in favor of a law that bans social media influencers from touting risky financial services, including cryptocurrencies.


Exberry’s Guy Melamed on paradigm shift with cloud-native exchanges at FIA Boca 2023

FinanceFeeds Editor-in-Chief Nikolai Isayev spoke with Guy Melamed about Exberry’s cloud-native exchange SaaS platform certified by AWS to bring about a paradigm shift in the industry at a time of cybersecurity concerns.