Ahead of the German Federal Elections on Sunday, September 24, several retail brokers in Europe are temporarily adjusting margin funding requirements for their clients. The move is done ahead of any potential influx of volatility, which could consequently trigger wider spreads and reduced liquidity in the Euro FX pairs and EUR CFDs shortly after.
Z.COM Trade has become the latest broker to implement a temporary change in the required margin of EUR FX pairs and EUR CFDs, which will begin at approximately 9:00 GMT on September 22, until 9:00 GMT on September 25. After 9:00 GMT on September 25, existing margin levels will be reapplied into the system.
Across its ECN Account and Classic Account type, the change in adjusted margin required is in the range of 100 basis points to 500 basis points in different pairs. And, for Legacy Account type, the required margin for EUR FX pairs will be increased from the evening of September 24, until market close on September 29 – the change will be in the range of 50 to 200 basis points.
In addition, OctaFX has also changed its margin requirements on all platforms from 00:00 EEST Friday September 22, 2017 until 00:00 EEST Tuesday September 26, 2017. The leverage will be lowered to 1:200 on select currency pairs, 1:100 on metals, 1:20 on oil and 1:5 on DAX. OctaFx is expecting high volatility before and during the announcement of the electoral results with major currencies including the USD, EUR, CHF likely to experience substantial pressure. OctaFx has also urged customers to proceed with caution in terms of trading activity surrounding this period.
By extension, AAAFX will also be making adjustments in the margin requirements for GER30, FRA40, UK100, ESP35, EUSTX50 to 4% before the market opening on the September 24. These brokers join a growing list that already includes XM.COM and Forex.com that have made adjustments in their respective margin requirements ahead of the elections.