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Screenshot of a breaking news alert e-mail from Q2 2017
Most of our coverage of Brexit and its impact on Forex trading has been of the one sided type – that it, leading Forex brokers raising required margin requirements and limiting leverage ahead of expected volatility and an expansion of spreads around the June 23 referendum in the UK.
Well here’s a change.
Citing increased demand from its clients, FCA and CySEC regulated retail forex broker FxPro has reversed course and indicated to clients that they can indeed trade this week at near-normal margin and leverage conditions.
In a note sent early last week to clients, FxPro indicated that (as done by several other leading brokers) it was going to limit leverage on major GBP pairs to 50:1 (2% required margin), and on minor GBP pairs to between 12.5 to 25:1. All EUR crosses were to be limited to 100:1 leverage (except EURGBP of course, at the aforementioned 50:1). Max leverage on European Index CFDs was set to 20:1, and on European Share CFDs 6.7:1.
Fairly in line with what we have been seeing from other brokers.
However LeapRate has learned that over the weekend FxPro has sent an email to clients (see details below) that the company has increased leverage allowances to near-normal levels of 200:1 (depending on position size, as outlined below), although it reserves the right to re-lower them depending on market conditions as this week progresses.
FxPro also did warn that fixed spreads may be allowed to float so as to reflect underlying market conditions around the time of the referendum, and in case of extreme volatility ‘Close Only’ functionality may be enabled on some or all instruments.
Leverage on FxPro’s cTrader platform will be limited to 100:1, tightening to 50:1 starting 12:00 GMT+3 on June 22, the day before the Brexit referendum.
The ‘leverage reversal’ note sent by FxPro to its clients reads as follows:
Improved ‘Brexit’ Trading Conditions
Following increased demand from our clients we are increasing leverage for all FX pairs. To protect our clients against sharp market movements, we will be reviewing our trading conditions for the days leading up to the referendum, as well as during and in the aftermath of it.
While we will make all possible efforts to keep spreads at a minimum, wider spreads are expected due to high volatility.
Prior to, during and after the referendum, fixed spreads may be allowed to float so as to reflect underlying market conditions.
In case of extreme volatility ‘Close Only’ functionality may be enabled.
The following changes will be applied today (17/06/2016) after Market Close, to both existing and new positions:
|MetaTrader 4 / MetaTrader 5||cTrader|
|Forex Majors||0.01-5.00*||5.01-10.00*||10.01-50.00*||50.01* +||ALL|
|Forex Minors / Exotics||0.01-2.00*||2.01-5.00*||5.01-15.00*||15.01* +||ALL|
* Please note that these figures refer to position size in lots.
Margin requirements on EU Shares (French, German, UK): 15%
The following changes to margin requirements will come into effect at 12:00 (GMT+3) on 22/06/2016:
- Margin requirements on all Indices: 5%
- Margin requirements on all Index Futures: 5%
- Margin requirements on all FX Pairs on cTrader: 2%
As always, we stand by our commitments to our clients and assure you that all trading will continue to be in line with our existing ‘Terms & Conditions’. In addition, our Negative Balance Protection (NBP) will continued to be offered to all our clients, provided NBP is not manipulated or abused.
NOTE: Please be advised that, should market conditions deem it necessary, FxPro reserves the right to make additional changes to trading conditions in the days prior to and after the referendum.