The following got mailed out to customers of the forex broker Oanda yesterday:
Due to the extreme volatility some market analysts foresee could result in the coming days, OANDA fxTrade will not accept any trading activity from 6:00 AM EST until approximately 3:00 PM EST, on Sunday, June 17, 2012. OANDA believes the convergence of a major market event during off-market hours represents a potential trading risk and has taken this rare step to protect traders from excessive rate fluctuations.
Please note that during this halt in trading, you can still access your account details but no trading activity will be accepted. For this reason, OANDA strongly recommends that all traders consider minimizing currency exposures prior to the trading halt.
If you do intend to maintain open positions during this period, be aware that OANDA will hold exchange rates steady during the trading halt. However, when trading resumes, rates will immediately adjust to the current market rate and it is possible that the updated rate could result in a margin closeout if the price has moved significantly against your positions. Therefore, it is your responsibility to ensure you have adequate funds in your account to prevent a margin closeout.
Of course this basically just means Oanda will be acting list almost every other broker in not allowing trading on Sunday before the Asia open, but this is a new thing for them. My immediate cynical reaction is that the markets probably won’t end up doing anything much at all. 🙂
It should be noted, though, that this is totally a risk management decision. You can be sure Oanda is going to get as flat as they can heading into the weekend to ensure they don’t take a big hit from a volatility event. Methinks there are a few traders out there who could learn a thing or two here.