Helena Izotova
Approximately a week ago, the Swiss National Bank came up with a shocking and unexpected decision to unpeg its national currency - the Swiss Franc - from the common European currency (which used to be pegged at 1.2). This instantly triggered unprecedented volatility in the CHF-related markets, which resulted in thousands of retail trader seeing negative balances while Forex brokers having major difficulties. Some of them even had to announce insolvency due to improper risk management and too leveraged business.
It should be noted that the very process affected companies and traders worldwide, including the USA, Europe, Russia, Asia etc.
Experts say that the negative effect of the SNB’s decision to unpeg its national currency from the Euro was reinforced by the central bank’s another decision to increase the key interest rate from 0,25% up to 0.75%, which brought investor’s costs related to servicing their deposit to a new level. At the same time, local exporters saw the same challenge.
Still, Forex traders and companies now seem to have suffered most of all. Some companies are still running dozens of millions in losses and are still trying to survive the aftershocks.
According to Masterforex-V Academy, this was a truly efficient stress test for the entire Forex industry. The Black Thursday (as they now call it) showed us the best of the best in the contemporary trading industry. While some companies had to report insolvency due to major losses resulting from improper risk management, some other (the minority of) Forex companies reported no damage to them or heir clients and continued their work as usual. Without any doubt, this is the result of efficient work done by those companies to cap the leverage and manage their risks properly so that to provide all of their clients with a truly high level of financial security and safety of funds.
FIBO Group is one of such outstanding representatives of the contemporary Forex industry This company managed to come off clear since the company’s management has been wise enough to foresee possible force-majeure and prepare for taking appropriate actions if necessary.
Fortunately, the company passed this stress test with flying colors. The management took timely actions to prevent any negative outcome of the unexpected volatility in the CHF-related currency markets resulting from the SNB’s decisions. The company was one of the first Forex brokers to downgrade and cap the leverage for EURCHF. Even though some clients were discontent with this decision, the latest events showed that his was a truly smart idea and it definitely payed off.
With that said, while other companies had to react by suspending trading letting their clients’ balances go negative and being unable to control the situation, FIBO Group let their clients work (and trade the Swiss Franc in particular) as usual without suffering any losses. It is not accidental that FIBO Group has been among the world-class Forex brokers belonging to the ultimate league of Masterforex-V Expo’s ratings of Forex brokers for years. It is also the winner of multiple prestigious awards and the participants of major Forex events held worldwide. This is another reason to value this broker as a reliable partner for any kind of retail Forex traders out there.
This also leads us to believe that while all companies can promise their clients safety and security as well as efficiency, few of them can actually put their words into practice. The bottom line is that the stress tests showed which companies can and should be trusted at all times…
Helena Izotova
