Blackwell Global Introduces Measures to Curb Possible Brexit Fallout
Award-winning forex and CFD brokerage Blackwell Global has put in place a variety of measures in order to protect its clients from unnecessary exposure to anticipated market volatility during the period of the EU Referendum, which will occur on Friday, June 23rd 2016.
As a seasoned brokerage that has weathered multiple market changes, Blackwell Global has formulated various prudent policies in order to better facilitate its goals of risk aversion and client protection. The two primary actions that the company will undertake are the increase of margins and the temporary halt of new trades in anticipation of the event. This is to ensure that the interests of its clients are safeguarded from the choppy market conditions that typically follow after major news announcements such as the Brexit vote. Markets are often subjected to the influence of political factors, and the market reactions following Britain’s possible exit from the European Union (EU) are difficult to predict.
"Increased margin acts to protect the trader", says Mr. Patrick Latchford, CEO of Blackwell Global UK. "During erratic trading conditions, markets can show signs of gapping, which may inadvertently cause problems to trading activity in the form of stop-outs. This can prove to be a problem to traders who hold big positions. Our main priority is, and has always been the interests of the trader."
Another measure that will be taken is the temporary halt of new trades on the polling day – starting 7am UK time (6am GMT) until 27th June, Monday, 5pm UK time (4pm GMT), subject to market volatility. This is an imperative that stems from the prediction of volatile trading conditions.
Mr. Latchford explains that the risks posed by this extremely rare event necessitates this policy, and that it is appropriate to give the market time to stabilise before trading resumes.
To further elaborate on this point, Mr. Jansen Khoo, Head of Risk and Prime Services, agrees that such measures act to protect at the core, the trader.
Mr. Khoo says, "The trading halt is to help clients avoid incurring huge slippages during the UK referendum, since most liquidity providers tend to widen spreads due to thin liquidity. Our risk analysts are fully engaged during this period of uncertainty, to further assure our clients of the safety of their investments. "Blackwell Global has a strong track record of handling complex events such as the Swiss National Bank (SNB) crisis, and aims to maintain its reputation of being a reliable and responsible brokerage."
As an extension to its strong security, Blackwell Global routinely practices due diligence by monitoring its clients trading behavior closely, so as to enforce prudent and strict risk policies. This serves as another layer of protection to ensure that clients and the firm are relatively insulated from possible fallout from the market.