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Are FX markets playing crazy?

25 March 2015

More than 2 months after the SNB bloodbath, things should be returning to “normal” in FX markets… but are they?

Is last week’s 1-day dip then re-bound in the EURUSD ¨normal¨? How about the speed with which the USD approaches EUR?

FX Volatility

FXVolatility

The 6 USD TRN a day FX behemoth now seems jumpier than equity markets, and that’s not “normal”.

What if these are not freak-events, but the tail of a volatility wave?

How about bond markets?

Surely things ought to be more rationale in less speculative parts of town?

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Yes, the Greek tragedy will unfold. Surely that’s part of it. But Greece is a small-ish fish in the bigger pond – it really seems as though the rest of the pond is moving too.

Bi-polar trading, anyone?

The underlying theme is interest rate expectations. No-one, least of all the Fed, really knows how the Fed will tighten US interest rates. Similarly, with QE just starting and the ECB entering unknown territory, no-one really knows where the Euro economy is headed, one month before a major milestone for Greece (and the Euro), etc.

With more than your fair share of macro-economic unknowns, who’s surprised by volatilities spiking? Plus traders take sides: check EUR-USD positioning.

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That’s the kind of psychology that delivers (and follows) 22% value gain by the dollar vs. the US main commercial counterparts. It’s not happened in the last 40 years, but you can’t rule out it all happening again next year!

This is NOT a video-game on a trading screen. EURUSD has direct impact on absolute and relative global GDP growth (how import crazy will the US go?), debt servicing costs, commodity prices, etc. etc. This is a recurring them on the Financial Times in the next  3-5 years.

Implications for brokers and independent traders

Volatility is different things to different pockets. When it spikes, institutional money (focus: return OF capital) typically retreats into risk minimisation mode. To speculative money (focus: return ON capital)  this as a boon, the kind of environment to quickly build (and burn, and build again) a great reputation.

FX mean reversion is gone for now. “Hold on and recover when the ebb flows” can get any market making b-book broker out of a hole in normal conditions, but a client B-book over-exposed one way or the other could well be deadly now. Smart b-bookers will a-book more… passing the hot cookie to their LPs.

Problem is: how much risk appetite do they have post SNB? Established LPs may (partially or totally) withdraw as volatility mounts. Flows will perhaps land with less established LPs keener to pick coins in front of steam trains than the big boys.

Altogether, spreads ought to widen for the foreseeable future… which brings us to the implications for traders.

If you haven’t learnt the lesson yet, now is the time.

  • Investor capital is your ONLY viable business model.  You’re likelier to turn 3k into a million by playing the lottery than by trading your own capital with leverage.
  • Adjust your leverage. A 1:1 leverage EURUSD trade today is 2+ times riskier than 3 or 4 months ago.
  • That’s if you consider “average” moments. Spikes could well be significantly larger!
  • Do not trade with unregulated or lightly regulated broker-dealers.
  • Check not only your broker’s solvency, but their liquidity providers’.

Darwinex

It always pays to be an FCA regulated. As does offering FSCS protection up to 50.000 GBP and only offering liquid instruments on a 100% non-market making, pure broker basis.

Plus, this is a great learning opportunity for DARWIN risk management algorithms. Several extreme events in such a short time feed the event data-base, update risk policies and sharpen management scenarios. And with FX volatility making the headlines on a regular basis, expect new entrants into the market – which is not a bad thing.

Time to upgrade your trading?

 

Last News

Darwinex Trading Hours for ANZAC Day

19 April 2018

Please note the amended Darwinex trading hours for the upcoming ANZAC Day on 25 April 2018 (all times are in UK time).  Instrument Trading Hours  FX 22:01 Wed – 22:00 Thu   DARWINS 22:01 Wed – 22:00 Thu  COMMODITIES   Gold 23:01 Wed – 21:59 Thu Silver 23:00 Wed – 22:00 Thu Platinum 23:00 Wed – 22:00 Thu Palladium […]

Please note the amended Darwinex trading hours for the upcoming ANZAC Day on 25 April 2018 (all times are in UK time).

 Instrument Trading Hours
 FX 22:01 Wed – 22:00 Thu
  DARWINS 22:01 Wed – 22:00 Thu
 COMMODITIES  
Gold 23:01 Wed – 21:59 Thu
Silver 23:00 Wed – 22:00 Thu
Platinum 23:00 Wed – 22:00 Thu
Palladium 23:00 Wed – 22:00 Thu
US Crude 23:00 Wed – 22:00 Thu
Natural Gas 23:00 Wed – 22:00 Thu
 INDICES  
Australia 200* 08:10 – 22:00
 Europe 50 23:00 Wed – 22:00 Thu
France 40 23:00 Wed – 22:00 Thu
Germany 30 07:00 – 21:00
Spain 35 07:00 – 19:00
Japan 225 23:00 Wed – 22:00 Thu
 UK 100 23:00 Wed – 22:00 Thu
 US SPX 500 23:00 Wed – 22:00 Thu
 US Tech 100 23:00 Wed – 22:00 Thu
Wall Street 30 23:00 Wed – 22:00 Thu
*Amended Darwinex trading hours.

As always, at info@darwinex.com we’ll be happy to assist you!

Change in bank account details for GBP deposits

6 April 2018

Over the next few days the segregated accounts for our GBP clients will be transferred over to a new FCA regulated banking entity. Your deposits remain protected under the Financial Services Compensation Scheme (FSCS). The change will be 100% automatic and will not require any action on your part. Nevertheless, due to the fact that […]

Over the next few days the segregated accounts for our GBP clients will be transferred over to a new FCA regulated banking entity. Your deposits remain protected under the Financial Services Compensation Scheme (FSCS). The change will be 100% automatic and will not require any action on your part.

Nevertheless, due to the fact that the bank account details used up until now for GBP deposits have been changed, if you wish to make a deposit via bank transfer, make sure to initiate the deposit from your Wallet in order to receive the new bank account details per email. This should be the way you always initiate a deposit as opposed to copying a previous deposit’s data.

We remain at your disposal at info@darwinex.com

And the DarwinIA winners are… (March 2018)

2 April 2018

The March 2018 edition of our DarwinIA trading challenge came to its end. Below you can find the 48 winners of our € 4,000,000.00 notional allocations for a 6 month period and the 7 traders who won € 1,000 in Darwinian Dividends. Congratulations to the winners! Place DARWIN Notional allocation Darwinian Dividends 1st VQB € 300,000.00 € 1,000.00 […]

The March 2018 edition of our DarwinIA trading challenge came to its end. Below you can find the 48 winners of our € 4,000,000.00 notional allocations for a 6 month period and the 7 traders who won € 1,000 in Darwinian Dividends. Congratulations to the winners!

Place DARWIN Notional allocation Darwinian Dividends
1st VQB € 300,000.00 € 1,000.00
2nd EEE € 250,000.00 € 1,000.00
3rd GUA € 210,000.00 € 1,000.00
4th SYO € 170,000.00 € 1,000.00
5th NCN € 150,000.00 € 1,000.00
6th BAD € 140,000.00 € 1,000.00
7th EWL € 130,000.00 € 1,000.00
8th LVS € 120,000.00 /
9th LZB € 110,000.00 /
10th CBY € 110,000.00 /
11th JHJ € 110,000.00 /
12th CLA € 100,000.00 /
13th FEG € 100,000.00 /
14th VTS € 100,000.00 /
15th VFL € 90,000.00 /
16th SDP € 90,000.00 /
17th OVL € 90,000.00 /
18th RIH € 80,000.00 /
19th STV € 80,000.00 /
20th CJN € 80,000.00 /
21st JMP € 70,000.00 /
22nd AGD € 70,000.00 /
23rd LDD € 70,000.00 /
24th CSP € 70,000.00 /
25th NAF € 60,000.00 /
26th LDZ € 60,000.00 /
27th XYF € 60,000.00 /
28th SCN € 60,000.00 /
29th PFI € 60,000.00 /
30th BGR € 60,000.00 /
31st OSM € 50,000.00 /
32nd ZLA € 50,000.00 /
33rd VRT € 50,000.00 /
34th AAN € 50,000.00 /
35th XSN € 50,000.00 /
36th ZZL € 50,000.00 /
37th ZTY € 50,000.00 /
38th SIX € 40,000.00 /
39th HTS € 40,000.00 /
40th ONE € 40,000.00 /
41st XYP € 40,000.00 /
42nd HFE € 40,000.00 /
43rd AOF € 40,000.00 /
44th MER € 40,000.00 /
45th NSC € 30,000.00 /
46th VOZ € 30,000.00 /
47th FYW € 30,000.00 /
48th QKL € 30,000.00 /

Change in bank provider

26 March 2018

Over the next few days the segregated accounts for our EUR and USD clients will be transferred over to a new banking entity. The change will be 100% automatic and will not require any action on our users part. Nevertheless, due to the fact that the bank details used up until now for EUR and […]

Over the next few days the segregated accounts for our EUR and USD clients will be transferred over to a new banking entity.

The change will be 100% automatic and will not require any action on our users part.

Nevertheless, due to the fact that the bank details used up until now for EUR and USD have been changed, any client who wishes to make a deposit via bank transfer will have to enter the new bank details.  

To access these new details, it is necessary to generate a new order to deposit via bank transfer from your Wallet.

We remain at your disposal at info@darwinex.com

Kind regards,

The Darwinex Team

Bank transfers won’t get processed on Friday 30th March and Monday 2nd April

23 March 2018

Easter is just around the corner which means a bit of vacation, reflection and celebration that we hope you enjoy with your nearest and dearest. Please note that Friday 30th March and Monday 2nd April are UK Bank Holidays. Bank transfers to / from your Darwinex Wallet won’t get processed on those days. Should you […]

Easter is just around the corner which means a bit of vacation, reflection and celebration that we hope you enjoy with your nearest and dearest.

Please note that Friday 30th March and Monday 2nd April are UK Bank Holidays. Bank transfers to / from your Darwinex Wallet won’t get processed on those days.

Should you want to deposit or withdraw through a bank transfer next week, you might want to make arrangements to initiate the transfer process earlier.

Do not hesitate to contact us at info@darwinex.com in case you need any assistance.

Happy Easter!

 

Darwinex Trading Schedule Easter 2018

Trading Schedule for the 2018 Easter Holiday Period

Please note the amended Darwinex Trading Schedule for the 2018 Easter Holiday Period. Times are displayed in UK time and changes to regular schedules are highlighted in red.   Instrument Thursday 29th March  Friday 30th March  Monday 2nd April FX 22:01:01 Wed – 21:59:59 Thu 22:01:01 Thu – 21:55:00 Fri 22:05 Sun – 21:59:59 Mon Commodities* 23:00 […]

Please note the amended Darwinex Trading Schedule for the 2018 Easter Holiday Period.

Times are displayed in UK time and changes to regular schedules are highlighted in red.

 

Instrument

Thursday 29th March  Friday 30th March  Monday 2nd April
FX 22:01:01 Wed – 21:59:59 Thu 22:01:01 Thu – 21:55:00 Fri 22:05 Sun – 21:59:59 Mon
Commodities* 23:00 Wed – 22:00 Thu CLOSED  23:00 Sun – 22:00 Mon 
DARWINs 22:05 Wed – 21:59 Thu CLOSED 22:05 Sun – 21:59 Mon
Indices      
Europe50 23:00 Wed – 22:00 Thu  CLOSED  CLOSED
GDAXI 07:00:00 – 21:00:00  CLOSED   CLOSED
SPX500 23:00 Wed – 22:00 Thu  CLOSED  23:00 Sun – 22:00 Mon
WS30 23:00 Wed – 22:00 Thu  CLOSED  23:00 Sun – 22:00 Mon
NDX 23:00 Wed – 22:00 Thu  CLOSED   23:00 Sun – 22:00 Mon
J225  23:00 Wed – 22:00 Thu CLOSED  23:00 Sun – 22:00 Mon
AUS200 23:00 Wed – 14:00 Thu CLOSED  CLOSED 
FCHI40  23:00 Wed – 22:00 Thu  CLOSED  CLOSED
UK100 23:00 Wed – 22:00 Thu  CLOSED   CLOSED 
SPA35 07:00 – 19:00  CLOSED   CLOSED 

 

*Please, be reminded that the instrument XAUUSD closes a minute earlier, and opens a minute later, than the rest of Commodities in Darwinex as shown in the table of Darwinex assets and spreads.

March 30th

In spite of the DARWIN Exchange being closed on Friday, 30th of March, the quote in the majority of DARWINs will keep moving throughout the whole market day due to the fact the the Forex market will remain open as seen in the table above.

March 29th and April 2nd

On the other hand, on March 29th -Thursday, and April 2nd -Monday-, the DARWIN Exchange will remain open even if the underlying assets’ market is closed, like AUS200 on March 29th or UK100 on April 2nd.

Should you want to know the standard procedure when you buy/sell a DARWIN whose underlying asset market is closed, we recommend you to read the following Knowledge Base article: Can I buy and sell DARWINs whenever I want?

Do not hesitate to contact us at info@darwinex.com for support.

Happy Easter!