I think before going out, isn't it better to just wait till Sept 14th's SNB Monetary Policy meeting?
Yes, I'm also halving my balance on this pair, but not my positions. What I'm doing is transferring some of my funds to stable brokers with super high leverage 1000:1, use max leverage and open max lots. There are some brokers out there with absolutely no negative spikes and has not gone below 1.2005 since Apr 4th. So the downside risk is very low, but the upside is all I can gain.
On the other hand, tomorrow There will be a chat about Challenges for Switzerland as a financial centre and the speaker will be Thomas Jordan, so maybe we can get some clue about the next SNB meeting
Please be advised that our liquidity providers have increased the risk profile of EURCHF. The reason for this is if SNB removes the cap on the EURCHF currency pair it may possibly gap through the 1.2000 level. This would result in anyone with a long position being in a significant negative balance on their account.
This increased risk profile means on the open of trading on Monday the 10th September 2012 we will be closing all positions in the EURCHF.
Please review your account to ensure that you close any EURCHF positions by the 10th September 2012.
We apologise for any inconvenience caused, however this risk assessment is in your best interest."
Over the next few days the Swiss National Bank may take measures to intervene with the exchange rate of the EURCHF. Pepperstone does not offer financial advise but we believe that such an event may result in extreme volatility in the EURCHF currency pair. This in turn may cause the market to "gap" significantly. In light of these conditions foreign exchange providers across the globe are adopting leverage reductions on the EURCHF.
Effective immediately Pepperstone will reduce the standard leverage on EURCHF to 25:1 or (5%). The leverage reduction will be in place until further notice.
If you have open positions on the EURCHF this leverage reduction may cause your margin requirement to increase and you may suffer financial loss. Please ensure that your account is adequately funded to maintain any positions after the change. Please note that failure to do so may incur financial loss. Pepperstone recommends that clients seek professional financial advice on this matter.
Pepperstone looks forward to removing this leverage reduction once the potentially volatile conditions are reduced.
Please be advised that our liquidity providers have increased the risk profile of EURCHF. The reason for this is if SNB removes the cap on the EURCHF currency pair it may possibly gap through the 1.2000 level. This would result in anyone with a long position being in a significant negative balance on their account.
This increased risk profile means on the open of trading on Monday the 10th September 2012 we will be closing all positions in the EURCHF.
Please review your account to ensure that...
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Did you see my post 9325
Do you think the brokers are just protecting themselves ?
Do you think the brokers are just protecting themselves ?
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Maybe, if the cap is removed (i bet that it wont happen for a long time yet) then if clients are very highly leveraged they could have negative account balances.
GoMarkets doesn't have negative balance protection for clients, so I think they didn't want clients to be not only wiped out by owe them money in the event of a large adverse market move.
I haven't received any emails from exness yet. They have negative account protection though for clients. My other broker IG Markets reduced the leverage a while ago on eurchf though.
Do you think the brokers are just protecting themselves ?
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Guys, my best guess is that these brokers are all market makers trying to limit their own risks - not necessarily only for the (inconceivable) case of a real peg break and gap downwards, but even more importantly for the case of a significant SNB intervention and a gap upwards. Because if EUR/CHF skyrockets, you guys will want to cash in and they will have to pay you. And since they do not give you direct market access but provide their own market, they will have to cover for your gains, which may be quite expensive for them, maybe too expensive. I may be wrong, but I would be surprised if anyone with an ECN account experiences the same problems of margin reduction.
Guys, my best guess is that these brokers are all market makers trying to limit their own risks - not necessarily only for the (inconceivable) case of a real peg break and gap downwards, but even more importantly for the case of a significant SNB intervention and a gap upwards. Because if EUR/CHF skyrockets, you guys will want to cash in and they will have to pay you. And since they do not give you direct market access but provide their own market, they will have to cover for your gains, which may be quite expensive for them, maybe too expensive....
Exactly. It never made sense to me that they would take such a radical step of establishing a floor and then remove within a year later, especially with all that is going on with the eurzone countries.
3,8 bln has been printed last week it is substantially lower than may-june. Look sustainable for years.lets see real inflation for 2-3 months at least before peg removal, we are still in deflation waters + look at eu cpi figures. What a bs peg remove.
