Here we go again with European geopolitical risk…roughly 6 months after the surprising “Brexit” vote, Italians are ready to make their voices heard regarding their politics. As such, brokerages are beginning to adjust trading conditions for the event.
EU and FCA regulated broker Admiral Markets announced margin requirement updates as market uncertainty is increasing around the Italian constitutional referendum on Sunday, December 4th 2016.
As reported by UK’s Independent, a poll published November 21st by La Stampa, and conducted by Community Media Research and Intesa Sanpaolo SpA, found that only 15.2% of the population were in favor of leaving the single currency, with 67.4% declaring themselves true single-currency believers.
For a detailed explanation of the Italian referendum and what it could mean for the future in Italy, check out the UK’s Independent article here.
In response to this situation, note the following changes that will affect client trading.
Specific changes for Admiral Markets will be:
a. 4x increase in the margin requirements for EUR-based cash index CFDs and bonds CFDs on Admiral.Markets account
b. 2x increase of above on Admiral.Classic account
c. Close Only mode enabled for the less liquid cross rates plus exotic currency pairs with EUR.
The changes will be applied within 60 minutes before the session close of the respective instruments on Friday, December 2nd 2016 and will last until 12:00 (EET) on Monday, December 5th 2016.
Change information
1.1. Amended leverage rates for Admiral.Markets accounts
| Account balance | Leverage | |
| EUR, USD, CHF | GBP | [AEX25], [BELG20], [CAC40], [DAX30], [IBEX35], [MDAX50], [STOXX50], [TECDAX30], #Bund |
| Up to 20,000 | Up to 12,000 | 1:50 |
| 20,000 – 80,000 | 12,000 – 50,000 | 1:20 |
| 80,000 – 150,000 | 50,000 – 90,000 | 1:10 |
| Over 150,000 | Over 90,000 | 1:2.5 |
1.2. Amended leverage rate for Admiral.Classic accounts on [DAX30] will be 1:50.
2. Opening new positions using exotic currency pairs and the less liquid cross rates with EUR will be restricted from 23:00 (EET) on Friday, 2 December to 12:00 (EET) on Monday, 5 December.
The Close Only mode will be enabled for the following instruments: EUR/CAD, EUR/NZD, EUR/CZK, EUR/HUF, EUR/MXN, EUR/NOK, EUR/PLN, EUR/RUB, EUR/SEK, EUR/ZAR.
Please be aware of the increased risks within the period leading to and after the Italian referendum, including:
a. sharp moves in market prices, especially those on EUR-based CFDs and currency pairs with EUR
b. significant price gaps, especially between Friday, 2 December close and Monday, 5 December open prices on the above instruments
c. limited liquidity, which may result in an increased amount of order rejections and slippage.
In addition to the amendments described above, Admiral Markets says it reserves the right to make further changes depending on the market situation around the Italian referendum. These notifications may be provided via our website, email or internal MetaTrader mail. Such changes may include but are not limited to:
a. increases in margin requirements on other instruments and further increases in margin requirements on EUR-based instruments
b. additional trading restrictions or extension of the terms of any or all amendments described above for additional time.