Geopolitical Crisis: FX Brokers Change Trading Conditions for RUB Pairs

The Russian invasion of Ukraine has started a major turmoil in the financial markets. And, with the pilling sanctions on Russia, the ruble and other Russia-related stocks have become very volatile. Now, online brokerages are changing trading conditions to mitigate their risks from exposure to these financial instruments.

London-headquartered IG Group on Tuesday increased margin rates on existing CFD and spread bet positions on shares with direct exposure to Russia, effective from 15:00 GMT on March 1. A total of 42 company shares were affected by this decision.

In addition, it suspended traders from opening any new positions with these share CFDs as the increased volatility Volatility In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, or stocks, over a given time period. Essentially, volatility describes the nature of an instrument’s fluctuation; a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Trad Read this Term can amplify the risk of rapid or large losses.

RUB Pairs

However, most of the forex Forex Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Foreign exchange or forex is the act of converting one nation’s currency into another nation’s currency (that possesses a different currency); for example, the converting of British Pounds into US Dollars, and vice versa. The exchange of currencies can be done over a physical counter, such as at a Bureau de Change, or over the internet via broker platforms, where currency speculation takes place, known as forex trading.The foreign exchange market, by its very nature, is the world’s largest tradi Read this Term brokers' focus was on the plummeting ruble, Russia’s fiat currency. The ruble lost around 30 percent of its value on Monday after the European Union and the United States decided to ban ‘selected Russian banks’ from accessing SWIFT.

Moreover, IG Group has increased the margin rates on existing spread bet and CFD positions on all currency pairs which include the Russian ruble.

For all ruble pairs and Russia-related share CFDs, the broker has changed the margin rate to 100 percent.

“The situation in Ukraine and its global ramifications are fluid and fast-changing. We’re continuously monitoring developments in financial markets and shifting legal and regulatory obligations worldwide,” IG noted.

Danish broker, Saxo took a more drastic step and entirely closed trading with all RUB currency pairs. It took the step after giving a day's notice to its clients.

“In response to the Ukraine crisis, Saxo Bank, the Danish retail trading platform and fintech, has halted RUB currency pair trading effective immediately (this includes USDRUB, EURRUB, RUBHUF & XAURUB pairs) and suspended incoming RUB payments,” said Saxo.

Dukascopy is another broker that discontinued trading with USDRUB and EURRUB for all of its clients on Monday. It closed training with the two mentioned pairs cited technical impossibility and determined price levels to close trading with other RUB pairs.

Furthermore, Forex.com responded to the volatile market conditions due to the Russia-Ukraine conflict by changing trading conditions. Meanwhile, the Japanese subsidiary of Forex.com and Alpari were among the brokers that suspended the opening of new positions on certain RUB pairs as early as February 24.