UK referendum may create “extreme volatility and/or unusually large moves in market prices”
In one indication of how uncertain market participants are toward the June 23 vote on whether Britain will leave the European Union, a major US-based retail securities broker is increasing margins for customers trading certain currency and futures contract-products, a MHB reader reports.
In an email to customers, titled, “Notice of UK Referendum (‘Brexit’)”, sent shortly after the June 22 market close, the Plantation Florida-based TradeStation informed clients it will “be increasing your margin requirements effective the morning of June 23 through the close of business on June 24.”
Those who operate “on margin” borrow money from a broker to supplement securities transactions and are required to meet certain minimal funding thresholds on such accounts.
TradeStation is the choice of many at-home traders because of its sophisticated platform and direct market access.
“You should review your account and take whatever measures you believe to be necessary to address the possibility of an extreme or unusual market disruption,” the brokerage warns. “Please be aware that TradeStation will exercise its right to liquidate any customer positions at any time should your account fall below existing or revised margin requirements.”