Swiss Franc volatility warning
Dear Traders,
Due to increased speculation around potential Swiss National Bank actions in financial markets in the weeks ahead, we would like to make you aware that there may be an increase in market volatility in all Swiss Franc (CHF) currency pairs as a result.
Although there are no immediate changes to our service to you, we retain the right to introduce changes to trading terms as we will deem necessary to ensure better investor protection and orderly trading during highly volatile periods in currency and any other relevant markets.
Please be aware of increased risks within the period leading up to and following the potential intervention of the Swiss National Bank, among all other risk factors:
- Sharp moves and significant gaps in market prices, especially in CHF pairs and Swiss index;
- Limited liquidity, which may result in much wider spreads, and an increased amount of order rejections and slippage;
- Reduction of available leverage;
- Significantly higher overnight fees ('Swaps');
- Relevant instruments and/or overexposed accounts going into ‘close-only’ trading mode without notice;
- Changes to supported trade sizes and trading session times;
- Introduction of per-account CHF exposure limits;
- Further changes of trading conditions of CHF or other closely related currencies on a very short or even without any advance notice to you.
These measures are just an indication of typical adverse effects that are inherent to greater volatility, and we reserve the right to introduce any other temporary or permanent measures and trading restrictions as we may be required during these exceptional circumstances.
Finally, we remind you that stop-loss orders are a tool intended to automate your position exit routine - they are not a guarantee of a certain position exit price, and clients should still be aware of the high risk of gaps in market prices during volatile periods.
Please ensure that you're comfortable with the size of your CHF positions heading into the new trading week and, if required, consider either reducing your exposure to financial markets or adding funds to your accounts to withstand possible greater price fluctuations.
Kind regards,
Admirals
