27 October 2020

A word to the wise for traders over the US election

There are very few things that are guaranteed in life but volatility around the US election is one of them. This election promises to be a memorable one given the disparity of the two front runners, who are so close in the polls, concerns about mail-in ballots, the current unsettled geopolitical/economic landscape and potential foreign interference, to name but a few of the influences. Last election day we saw both the Dow and the S&P have intraday spreads of almost 7% whilst Gold's was over 5%.

All traders must be prepared for this as, whether one is to stay up to watch and trade the election minute by minute or is going to let positions ride overnight, margin is going to become very relevant. All traders should examine their risk profile to ensure that the margin cover is sufficient to absorb the potential volatility and reduce the chance of being stopped out by an intraday spike in volatility.

Please feel free to reach out to your own personal account manager if you would like to discuss any aspect of your margining.

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