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Anticipating Brexit Tumult, Online Brokerage Boosts Margin Requirements

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. 

oh-shitIn 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.

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