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IG, XM, Plus500, ActivTrades, Admiral Markets lower leverage ahead of UK general election

Jun 06 2017
Jonathan Smith

As the date for the General Elections in the UK approaches, several major European forex brokers have announced they are taking precautionary measures against the expected high market volatility. To protect their clients, IG, XM, Plus500, ActivTrades, and Admiral Markets are lowering leverage levels on certain or all financial instruments.


Major UK forex broker and spread-betting provider IG said it will increase the minimum margin to 2% (1:50) for all GBP crosses, starting from 8pm (UK time) on Thursday, 8 June. Currently the broker offers leverage up to 1:100 for forex trading and states that trading conditions will be brought to normal shortly after the election results are announced.


Another leading European broker, XM, hiked the margin requirements to 1% (1:100) for all GBP currency pairs and to 2% (1:50) for all CFDs on Equity Indices, as of Thursday, 8th June 2017 (18:00 p.m. server time). The temporary change will affect both new and existing positions, and the broker says that margin requirements will revert to normal by Friday 9th June 2017.


Plus500 informs its clients it is doubling the margin requirements for all GBP and EUR forex pairs (to 1%) and for the following indices: Europe 50, UK 100, France 40, Germany 30 and Germany MidCap.The changes will come into effect as of Wednesday, June 7.


Another UK broker, Admiral Markets, said that it also will apply temporary changes on its trading conditions, starting from 23:00 (EET) on Thursday, 8 June 2017 until 12:00 (EET) on Friday, 9 June 2017.  The broker lowers the leverage levels for Forex and CFDs on gold, silver and oil to 1:200 (instead of 1:500). As regards cash index and bonds CFDs, the leverage will be up to 1:50. Additionally, the broker states that Close Only mode can be enabled for any instruments on separate short notice.


Starting from June 8, FCA-regulated forex and CFD broker ActivTrades double the margin requirements t0 0.5% for certain currency pairs, namely EURGBP, GBPUSD, GBPAUD, GBPCAD, GBPCHF, GBPJPY, GBPNZD. It also plans to increase four-fold the margin requirements for the indices GER30, FRA40, UK100, ESP35, EURO50, GERTEC, ITA40, NETH25, SWI20. Starting from 10 p.m. CET on June 8, ActivTrades will.


The General Elections in the UK will take place on Thursday, 8 June, and as the outcome is uncertain, high market volatility is likely to occur. Public opinion polls keep showing contradictory results, so it’s hard to predict whether the Labor or the Conservative party will win the majority of the seats at Westminster. Traditionally the Tories are viewed as the most ‘Business-friendly’ party and best for the UK economy and financial markets.


In her own words, Theresa May called an early election because she doesn’t want the Parliament to stand in her way of Brexit negotiations. Needless to say, the outcome of the UK general election might affect the Brexit process and, In the long run, the global markets.

TAGS: UK elections  leverage  IG  XM 

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