Recent revelations of a crude oil price war and the ongoing spread of Coronavirus means financial markets are facing increased volatility. CFD instruments, including forex, precious metals, crude oil and stocks, will incur the risk of price fluctuation, gapping, the widening of spreads and insufficient liquidity.
Oil prices have fallen dramatically after Saudi Arabia announced it will increase production. WTI Crude Oil dropped over 30%, whilst all three major U.S. Indices (US30, NAS100 and SPX500) suspended trading at the time.
Volatility has caused U.S. stock futures to exceed 5% daily down limits and halted trading on occasions. This has affected CFD instruments of these markets but trading on all instruments has since resumed.
Forex markets have also been affected, with currencies gapping on the open and increased volatility across major pairs and crosses.
We would advise clients to be aware of the risks involved over the coming period. Monitor both the market and your positions to ensure sufficient funds are available to cover open positions.
We are following developments closely and will take the necessary actions to protect our clients. Such actions may include increased margin requirements, widening of spreads, decreased leverage, etc. These actions can be taken at any time, including over the coming weekend.
Please feel free to contact us via info@fxtleverage.com if you have any questions.