Anybody out here seen any brokers showing signs of distress from all the financial mayhem? Even any that have gone the path of Lehman? Just curious if the Forex brokers are being as affected.
Brokers and Rebates on these brokers? 20 replies
FOREX Brokers and The Credit Crunch 2 replies
DislikedAnybody out here seen any brokers showing signs of distress from all the financial mayhem? Even any that have gone the path of Lehman? Just curious if the Forex brokers are being as affected.
DislikedHere is a general post on Liquidity you might find useful.
DislikedI don't see why margin requirements would increase. Even using 400:1, the usable margin in the account offsets any drawdown and is hence risk free for brokers. If a broker is going to place an order of $1,000,000, I don't think it matters whether it is from a trader with 20k and going nuts with leverage or a guy with $5,000,000 and using no leverage. If there are liquidity problems, both should be equally affected. Please correct me if I am wrong here.Ignored
DislikedYou really cant figure out why margin requirements would increase?Ignored
Dislikedthink about it this way... if you have 10k with your broker leveraged at 400 to 1 then you have 4m worth of buying power. your broker has to be ready to cover that much risk for your account. so if they usually have 5m worth of credit at a bank and all of the sudden the bank cuts their credit to 2.5m the logical step is to cut your margin so that they can manage the risk properly
there will always be a trickle down effect. i really doubt that they will not take on added risk in such a volitile market. i could be wrong though... wouldnt be the first timeIgnored