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Screenshot of a breaking news alert e-mail from Q2 2017
Due to the ongoing Brexit related uncertainty in Britain, Australian retail Forex and binary options broker GO Markets announced that is capping leverage rates across all sterling (GBP) pairs to a maximum of 1% (100:1).
Head of Trading, Tom Williams, says the leverage cap is largely a pre-emptive measure to mitigate against negative outcomes caused from what we anticipate to be a period of extraordinary volatility and erratic market conditions.
We’ve already witnessed unprecedented volatility across sterling pairs, not to mention the frequency of ‘flash crash’ events we’ve seen generally in recent years. Moderating leverage rates is one way we are choosing to mitigate against tail risk for our clients, which also acts to assist in our own internal risk mitigation framework. It’s a highly uncertain time in the region and it’s worth making moderate changes where possible,” Williams added.
The change is set to take effect from 27 January 2017.