I am wondering what everyone thinks might happen to any open trades, in the event of a collapse of the Euro currency?
Let's assume for a moment that the Euro completely collapses, and all the countries in the Eurozone decide to revert back to the currencies that they used to have. And, let's assume that one has a short position on the EURUSD. Would that trader's broker/dealer honor the trade?
I pulled up the EURUSD chart just now, and took a look at it. The price is currently hovering right around the $1.3300 area. That means, that there is approximately 13,300 pips between here, and the zero point, which is where the Euro would be at if it were defaulted and were to stop being used. I am assuming a worst case scenario here, where the Euro collapses suddenly overnight. Lets say I have a short position, with a 200pip stop loss, but no take profit order (or, a take profit order very close to the absolute bottom). So technically, I could make 13,300 pips on the trade, as it slams past parity, and all the way down to 0.00000.
Would the broker honor the trade? Or, would they pull a fast one and decide that the trade in invalid and just cancel the trade? Or, would they honor the trade, and suddenly jacking the spread to 13,300, meaning the trade closes out, with you paying spread and getting nothing for the trade (remember, you pay spread when you "buy the pair")?
Just for kicks, I logged into my Practice trading account and opened a Short position, at 1.33158, with a Stop Loss at 1.35000 and a Take Profit at 0.00001. Risking $28000 to make $1,065,320. Heheheh.
Let's assume for a moment that the Euro completely collapses, and all the countries in the Eurozone decide to revert back to the currencies that they used to have. And, let's assume that one has a short position on the EURUSD. Would that trader's broker/dealer honor the trade?
I pulled up the EURUSD chart just now, and took a look at it. The price is currently hovering right around the $1.3300 area. That means, that there is approximately 13,300 pips between here, and the zero point, which is where the Euro would be at if it were defaulted and were to stop being used. I am assuming a worst case scenario here, where the Euro collapses suddenly overnight. Lets say I have a short position, with a 200pip stop loss, but no take profit order (or, a take profit order very close to the absolute bottom). So technically, I could make 13,300 pips on the trade, as it slams past parity, and all the way down to 0.00000.
Would the broker honor the trade? Or, would they pull a fast one and decide that the trade in invalid and just cancel the trade? Or, would they honor the trade, and suddenly jacking the spread to 13,300, meaning the trade closes out, with you paying spread and getting nothing for the trade (remember, you pay spread when you "buy the pair")?
Just for kicks, I logged into my Practice trading account and opened a Short position, at 1.33158, with a Stop Loss at 1.35000 and a Take Profit at 0.00001. Risking $28000 to make $1,065,320. Heheheh.