November 2, 2020

ATFX, Change of leverage (margin) during US Presidential Election

Change of leverage (margin) on particular products during US Presidential Election.

Change-of-leverage-(margin)-during-US-Presidential-Election Change-of-leverage-(margin)-during-US-Presidential-Election


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Change of leverage during US Presidential Election

The US presidential election takes place on 3rd November 2020 and is the biggest economic event of the year, widely impacting financial markets, particularly USD FX pairs, stocks and Indices.

The 2020 United States Presidential Election is scheduled to be held on November 3, 2020 (Tuesday).

There is an increased chance of higher market volatility on all financial products during this period.

This may cause a lack of liquidity, spreads to widen, gapping and increased likelihood of a flash crash.

Due to the above risks, ATFX will be temporarily reducing the leverage on some of our instruments.

The changes will be effective at the market opening time (i.e.: MT4 server time 00:01) on October 31, 2020 (Saturday).

Markets Current Leverage Temporary Leverage
Forex Pairs 1:400 / 1:200 1:100
XAUUSD 1:400 / 1:200 1:100
XAGUSD 1:200 1:100
Other Markets No Change No Change

It is important to keep your trading account adequately funded so you can manage your open positions during this time.

Insufficient margin may lead to forced liquidation of positions.

ATFX will be continuously reviewing the leverage offered and will return to normal leverage once the volatility on these markets has reduced.

We encourage you to consider the risks involved during periods of extreme volatility.

What to expect from US Election 2020?

What to expect from the US Election?

The U.S. Presidential Election on Tuesday, Nov 3rd has the potential to cause global market volatility.

The polls have Joe Biden in the lead, but what are the expectations for the USD and the S&P500 going into the elections?

The USD is expected to fall if Joe Biden is elected as President, as he is expected to reverse President Trump’s protectionist policies.

This may be beneficial for the world but disadvantageous for the USD.

If this occurs, gold can be expected to move sharply higher as the USD weakens.

If President Trump wins, the USD is expected to move higher, as he intends to pursue the trade war against China more vigorously in a second term.

However, both candidates are expected to give a boost to US stocks.

To avoid large price swings in volatile markets, some investors may exit the market prior to the election.

Make sure you are prepared for Tuesday’s US election and its potential associated volatility.

Market volatility has been the order of the day throughout 2020 with financial markets reacting to COVID-19 and it is likely to continue around the US election.

How does the Election affect US Economy and Markets?

What do you need to know when trading around US election?

USD volatility is likely to increase as investors react to the election results. In 2016, the US Dollar Index rose nearly 6 percent in the 2 months after Donald Trump was elected. Trade major currency pairs with spreads from 0.0 pips.
Indices and Stocks
There has been a common theme during the last three elections. The US500 has made election day gains of 0.38% (2016), 0.79% (2012) and 4.08% (2008). Volatility could result in a spike in US Indices with the US500, VIX and US Dollar Index all available to trade.
In the months following Trump’s election in 2016, gold declined from $1,280 into the low $1,100s. Its safe haven aspect has seen it achieve record highs of more than $2,000 in recent months. Investors may again turn to Commodities such as gold, silver and oil in response to to the uncertainty surrounding the election period.

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