Forex Broker News: Estonia Based Admirals Cautions On CHF Volatility

• The Estonian Forex Broker Admirals Issued A Series Of Measures in Relation To The Swiss Franc In An Attempt To Curb Volatility
• Measures Announced May Be Temporary Or Permanent According To The Circumstances
• Intervention By The Swiss National Bank To Stabilize CHF Not Excluded By The Forex Broker

The Estonian-based forex broker Admiral Markets AS (Trade Name: Admirals) has issued a volatility warning to its clients who trade the Swiss Franc (CHF). This warning comes amidst speculation on a possible intervention from the Swiss National Bank (SNB).

A note issued by the forex broker warned that such ‘potential’ actions from the SNB could increase market volatility across CHF-pegged pairs. Admirals further cautioned that possible scenarios could include considerable gaps in market prices especially in CHF pairs and the Swiss index. This could create speculations and the inevitable intervention of the Swiss National Bank.

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Forex Broker Admirals Lists Measures Which Are Expected To Curb Volatility In The Swiss Franc

As continued speculation in the Swiss Franc continues, the Estonia-based forex broker listed the measures it was expected to take the curb such volatility.

“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”, Admirals noted.

Other factors listed by the forex broker include:

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 its clients.

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Admirals Warns That These Are Typical Adverse Effects Of Speculation In The CHF

In its comments, the Estonia-based forex broker further clarified that such measures are just an indication of typical adverse effects that are inherent to sharp volatility in the Swiss Franc. It also continued to warn that this volatility could be triggered by what it terms as a ‘black swan scenario’ coming from the SNB.

Furthermore, Admirals also warned that the firm continues to reserve the right to introduce any other temporary or permanent measures depending on the 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”, the forex broker said.

In the last weeks, there has been considerable speculation on a possible intervention from the Swiss Central Bank to avoid further strengthening of the CHF.

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