The following article was written by Jens Chrzanowski, Member of the Management Board of Admiral Markets Group AS.
The obvious market event of the week is today’s UK General Election, with first results and projections expected tomorrow morning. Will it be May or Mayday? …Maybe! Who knows?!
First London, then Manchester and now London again. Elections under the influence of terror could bring any result and opinion polls over the last few weeks have certainly hinted so. At the outset of the election, which was called early by the Conservative government in the hope of securing a greatly increased majority, Theresa May was roughly 20 points ahead of opposition Labour Party leader, Jeremy Corbyn. However, events over the past few weeks have seen that lead narrow, with some polls claiming that the two parties are almost neck-and-neck. The result is not so clear-cut anymore.
This kind of market event, where the result is unpredictable, will usually cause the biggest amount of volatility and fluctuation in the markets. So, a good trader should be well prepared. Responsible brokers have their part to play too. They should put specific safeguards in place, designed to protect their clients against negative balances when trading leveraged products. To do so, they will likely change their margin requirements around the election. Of course, some other brokers will not do so, but then how they such brokers act when the heavy losses and negative balances hit their client’s accounts?
So, will British voters be influenced by the latest terror attacks? Will people see Theresa May, who previously held the post of Home Secretary for seven years, overseeing a period of police cutbacks, as responsible for recent shortcomings in national security. Come morning tomorrow, 9 June, we’ll know the answer.
To find out more about the impact of the UK General Elections on financial markets and to learn how you can trade such events, if your appetite for risk is so inclined, check out our dedicated webpage.
See you next week!
Do you have feedback, concerns, requests, maybe even compliments? I’d love to hear. Please contact me via: [email protected].
Trading on margin carries a high level of risk, and this article should not be seen as advice or solicitation to buy or sell. It’s written for informational purposes only.