Dukascopy Sets Limitations on Maximum Exposure Following Risk Tests

Following Black Thursday, the EUR/CHF move on January 15, 2015, that shocked the trading industry, brokers are continually trying to improve their Risk Management Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term in case of a similar event. Dukascopy Group announced today that it has developed measures to prevent the firm from suffering the fate of brokers who were critically hit on that day.

The Switzerland-based broker says that to ensure the stability of all Dukascopy Group entities, stress tests using different scenarios have been performed. The following assumptions for the tests were chosen: 5% gap/shift of EUR vs other currencies during a trading day and 10% gap/shift of EUR vs other currencies during the weekend.

Based on the stress test results Dukascopy has developed measures to guarantee the stability of the group. A new limitation of maximum net exposure starting from June 21, 2015, will be introduced to all group entities customers.

Dukascopy says it believes that these measures will eliminate the repetition of Alpari UK/FXCM scenarios and will not influence the large majority of its retail clients.

Maximum net exposure of each currency pair on one trading account is limited to a position of 25 million of primary currency. For precious metals and CFDs maximum net exposure is specified by instrument. Clients may request to waive the maximum exposure limit, in which case the account Leverage Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term will be reduced to 1:20 and 1:10 over-the-weekend.

Last week, Dukascopy Group announced that two of its global branches, Dukascopy Bank and Dukascopy Europe, are extending their range of instruments available for trading with a new type of binary option – Daily Stock Option. DSO allows the trading of binaries of a particular stock based on the price move during the next trading session instead of the traditional times frames of 5 minutes, 30 minutes, 1 hour and so forth.