Vantage FX to Raise Margins in Response to US Election

Forex broker Vantage FX made an announcement on its website last Friday noting that it may raise margin requirements for key instruments for the purpose of reducing the chance of negative equity for clients and the exposure under volatile conditions, as the U.S Election is expected to increase market volatility.

The broker highlighted that the measure could even come in the form of raising margins on hedged positions to protect from liquidity risks.

Vantage FX have conducted a review of its risk management policies ahead of the November 3rd Election and at this point have decided no changes will be made to the current margin requirements.

However, the regulated trading services provider warned that during periods of high market volatility there may be times where spreads are considerably wider than usual. Additionally, as uncertainty grips the market, Liquidity Providers and Banks retreat. As a result of this, stops may incur greater slippage and stop out levels may be significantly above or below where you expect to be executed. The market will be extremely volatile as it responds to news releases and updates.

Given these, the company said that it will take appropriate actions as required to establish a greater level of control in the event of extreme market conditions to protect clients and ensure a positive trading experience. 

In addition to raising margin requirements, Vantage FX may also move some instruments to close only under some circumstances liquidity could be so poor and volatility could be so high that the firm may deem it best to do so.

Vantage FX said that it will endeavour to notify its clients prior to any of these changes being made via both email and the mailbox section of clients' MT4 platform.