LONDON, Aug 11 (Reuters) - Saxo Bank will raise foreign exchange and contract for difference (CFD) margins from next Wednesday citing “growing tension between North Korea and the USA”, the online trading platform provider said in a note sent to clients on Friday.
The Denmark-based retail broker said the changes, which include doubling yen, euro and dollar minimum margin on amounts below $3 million to 2 percent, would be effective from 0800 GMT on Wednesday, Aug. 16.
The company told its clients the move was designed “to reduce your risk against the potential high volatility, rapid price movements or market gaps that may occur in case of further political escalation”.
Since the huge losses generated by moves in the Swiss franc in January 2015, banks and retail brokerages have tended to be more cautious in the amount of capital they ask investors to hold against open trading positions, periodically raising margin rates at times of potential market stress. (Reporting by Julien Ponthus, editing by Patrick Graham)