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IG hikes FTSE, Germany 30, EUR, GBP margins ahead of US presidential elections

Oct 20 2016
By
Forexbrokerz.com

Leading UK brokerage IG Group plans to increase margin requirements for certain forex and contracts for difference (CFDs) ahead of US elections due to expectations of high market volatility. The broker will introduce the new margins on 28 October and again on the Elections day, 4 November.


As of 28 October, all crosses with the Mexican peso (ZAR), South African rand (ZAR), Brazilian real (BRL) and South Korean won (KRW) will have a margin of 5% and pairs with the Turkish lira (TRY) will be traded with a margin rate of 3%.


Meanwhile, on 4 November (3pm UK time) a temporary margin rate of 1% will be introduced on majors – US dollar (USD), Euro (EUR), Japanese yen (JPY), as well as on crosses with the Canadian dollar (CAD). A margin of 1% means that the maximum leverage that IG’s clients will use is 1:100, while currently the maximum leverage rate is 1:200.


Additionally, as of 4 November the broker will hike the margins for some CFDs, as follows:


– 1% margin: FTSE 100, S&P 500, Germany 30, France 40, EU Stocks 50, US Tech 100, Russell 2000, Wall Street, and Gold;
– 10% margin: US Banks, European Banks, US Healthcare/Biotech;
– 0.75% margin: US Treasuries.


The US presidential elections will take place on 8 November, 2016, and the outcome of the race between Hillary Clinton and Donald Trump is hardly predictable. Forecasts change course after each pre-election debate and history suggests that the markets respond far better to election processes whose outcomes are more predictable.


The formula Political Uncertainty = Market Volatility fully applies to the current situation. And Increased volatility means increased risk. That is why IG Group warns that margins could be increased further, if necessary, and recommends traders to monitor closely their positions.


Earlier this month, the broker also increased margins on all GBP pairs over the heightened volatility in forex markets resulting from the currency’s flash crash that supposedly is related to Hard Brexit concerns.
IG Group offers trading in contracts for difference (CFDs), forex, stocks, bonds, binaries, and Bitcoin. It operates worldwide and has offices in 15 countries. It is regulated by the UK’s Financial Conduct Authority (FCA), but its units are also regulated by the relevant authorities in the countries where they operate. Besides, IG is listed on the LSE, and is a member of the FTSE 250.


According to a recent forexbrokerz.com survey on the proceeds of UK companies, IG is the most profitable one for the year 2015.

 

TAGS: IG  FTSE  Germany 30  EUR  GBP  margins  US presidential elections 

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