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 can amplify the risk of rapid or large losses.
RUB Pairs
However, most of the forex 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.
