IMPORTANT ANNOUNCEMENT REGARDING THE UK ELECTION
As you are aware, The 2017 UK presidential election is set to be held on 8 June 2017. While it is impossible to predict the election results, it will certainly create volatility. With the election also taking place over the weekend while markets are closed, it certainly adds additional concerns.
UBANK FX operates a pure, STP model and passes all trade flow directly to its liquidity providers for execution. That being said, the Company has no way of knowing how its liquidity providers, or the markets in general, will react to election results other than to say that this will be a very volatile and fluid situation. We could potentially experience the extreme widening of bid/ask spreads and a removal of liquidity as banks and other providers seek to manage their risks. CFD markets could be especially affected by this volatility given the fact that there are a limited number of liquidity providers offering those particular products.
In order to prepare for the expected increase in volatility surrounding the June 8th election in UK, it will be necessary for UBANK FX to temporarily adjust the margin requirement for the all the EUR FX pairs and GBP FX pairs as well as "EUR-based” & "GBP-based" CFD product. We would expect these measures to be temporary in nature but would ask that you monitor your margin your MT4 account and make any adjustments that are warranted in light of the above changes to margin requirements.
Effective on the market open June 6th (5 PM NY time on June 6th), the margin requirement on all EUR FX pairs and GBP FX pairs will be 200% (that is to say, the leverage will be decrease to half when trading these sysmbols); And the margin requirement on "UK100", "EUSTX50", "FRA40", "GER30" and "SPA35" CFDs will be 2% (50:1 leverage)
With this in mind, we would ask all of our clients to be very aware of the very real risks associated with this event. Trading conditions will be somewhat abnormal and open positions and market orders will be subject to ( revalued against) the prevailing market price, however wide the bid/ask spread may be. We would therefore advise all clients to make sure that they have sufficient funds on deposit in order to sustain/maintain open positions under potentially, dangerous and extraordinary circumstances.
Reducing or eliminating exposure during this event may ultimately be the safest option but obviously that is a decision that each client must take based on their own appetite for risk.
Please know that UBANK FX staff will be available, as always, to provide assistance whenever needed throughout this event and in the days ahead.