Abdelrahman Alimari Managing Director of CommexFX
Abdelrahman Alimari Managing Director of CommexFX

Further perspectives relating to the SNB crisis

First Published: e-Forex Magazine 60 / Expert Opinion / April 2015

Why did some retail FX brokers weather the crisis caused by the sudden removal of the SNB peg better than others? The reason behind this is simple, there were two different scenarios which occurred, the first being, retail brokers who had better risk management structures in place which enabled them to be ready for such an event. Although it was almost impossible to predict when exactly this would occur, but with clear and precise hedging strategies in place they made sure to minimize the high volatility risks, an example of such an event was the SNB. The second were the brokers who’s traders simply had few or no positions open at all on CHF pairs.Does this event strengthen the value proposition of either market making or non-dealing desk brokers? When such an event occurs, we will most definitely see a strengthening of the non dealing desk brokers such as CommexFX. This has a domino effect and will also create more pressure on market makers to increase the liquidity and introduce more preventive...continued

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