Gain Capital Holdings Inc (NYSE:GCAP), popular global FX brokerage, who emerged from the CHF spike crisis on strong footing has stated to company clients that the firm is going to decrease leverage on certain risky FX pairs thus increasing margin requirements required by depositing clients.
The increase in margin requirements will rise to 10%-20%, with 10% being implemented on the Danish krone, Hong Kong dollar, Czech koruna and Chinese renminbi FX pairs; leverage on all of these pairs will thus be reduced to 1:10. The Singapore dollar, Hungarian forint, Polish zloty and the South African rand will be reduced to 1:20 leverage (a 5% margin requirement). Margin adjustments here will take effect after the market close Friday, February 6th and will impact existing and all new positions.
GAIN Capital was one of the few brokers who actually made a profit from the CHF spike shock, and as we have speculated here on LeapRate, strong foresight into risk management by increasing margin requirements and reducing leverage on non free floating exchange rates is one easy prudent risk mitigating tactic and Gain Capital is on the forefront.