May 2, 2017

KVB Kunlun changes Leverage on ForexStar(MT4) for French Presidential Election

Full Details of KVB Kunlun’s Changes for French Election!


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This article is originally referred from KVB Kunlun News.

Please be reminded that before the announcement of the French Presidential Election’s result, market volatility is likely to exacerbate, giving rise to uncertainty and may cause a lack of market liquidity.

Consequently, effective from 5th May 2017 (Friday), in order to protect the funds of KVB customer accounts and thereby reduce risk, KVB Kunlun will take the following interim measures:

  1. Adjust the leverage ratio of some currency pairs; and
  2. Make a temporary adjustment to the Net Open Position limits of some currency pairs for each account.

For more details, see the list below.

Trading Currency Leverage Ratio Net Positions (Standard Lots)
Now After Adjustment After Adjustment
XAUUSD 200 100 Not Applicable
EURUSD 100 50 50
GBPUSD 100 50 50
USDCHF 100 50 50
USDJPY 100 50 50
EURCHF 100 100 10
EURGBP 100 100 10
EURCAD 100 100 10
EURJPY 100 100 10
EURAUD 100 100 10
EURNZD 100 100 10
CHFJPY 100 100 10
AUDCHF 100 100 10
GBPAUD 100 100 10
GBPCAD 100 100 10
GBPCHF 100 100 10
GBPJPY 100 100 10
GBPNZD 100 100 10
NZDCHF 100 100 10

*Leverage is not a fixed value, the adjusted leverage calculation formula is:
(Leverage level for account / 100) × (Leverage after adjustment for product)
Eg. Client account leverage is 50 and the client wants to trade EURUSD; newly calculated leverage is 50/100*50=25.
* Gold XAUUSD leverage level is a fixed value which is not affected by your account leverage and will be reduced from 200 to100.
* The above adjustments apply to the existing and new positions of all accounts. Therefore, your account margin will be recalculated based on the newly adjusted leverage ratios.
* The Net Position limit adjustments apply to all client accounts.

KVB Kunlun will review and may make adjustments to the above “interim protection measures” again based on the prevailing market conditions after 8 May 2017. These adjustments will be announced at a later stage.

During the election period, the markets can become extremely volatile, with highly insufficient market liquidity and the possibility of price gaps. Additionally, the spread between system accepted order and the market price as well as the bid ask spread may be widened. In such a situation, the actual execution price of Buy Stop, Sell Stop and Stop Loss Order may differ significantly from the price you have originally set in the Forexstar system. The above situation is in line with market practice and is outlined in the terms and conditions of the Client Service Agreement which you have signed with KVB.

Please pay close attention to the trade positions and the status of your margin accounts particularly during volatile market conditions. If you have insufficient margin in your account, KVB Kunlun may be forced to liquidate your positions in order to prevent additional risk. KVB is not obliged to give any additional notification of such an event.

This adjustment will become effective immediately upon market opening next Friday, May 05, 2017. It will affect your current account positions and margin ratio directly. There may be an increased risk of your trade positions being automatically stopped-out by the system, so we strongly recommend that you pay attention to the trade positions and status of your accounts to ensure that there are sufficient funds to maintain your positions.

No further notifications will be distributed by KVB.

Important Risk Warning

Taking into account our observations of the current situation of the international financial market, the French Presidential Election week is likely to exacerbate market volatility, causing a correspondent lack of market liquidity. This may result in wider spreads and rapid fluctuations in price gaps.
During this period, please be aware of the likelihood of the following risks:

  1. The financial market may lack liquidity. Therefore clients may not be able to trade normally, including the ability to open new position and to close positions.
  2. Given the market situation at that time, buying and selling price differences may be extremely wide.
  3. There is a strong probability that transaction orders may not be able to be accepted (including cancelling, placing take profit and stop-loss orders, etc).
  4. The actual execution price of Buy Stop, Sell Stop and Stop Loss Order may differ significantly from the price you have originally set in the Forexstar system due to a lack of market liquidity and widening of the bid ask spread.
  5. Given the uncertainty of the market, your account may be stopped-out due to wider spreads (including all hedge or partially hedge trading). These circumstances may lead to a negative balance in your account.

Please be aware that the above situation is in line with market practice and previous market experience, and is outlined in the terms and conditions of the Client Service Agreement which you have signed with KVB. KVB suggests that you exercise extreme caution during this trading period. Pay particular attention to your account risk management strategy and closely review your account at all times.

We strongly advise you to trade with caution and be particularly vigilant when trading during this period.

Thank you for supporting KVB and we wish you happy trading!

Original Source: KVB Kunlun News

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