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The Italian election is a risk of… passing the Margin Call
This coming Sunday, 4 in March, 2018, parliamentary elections will take place in Italy. This event may have a significant impact both on the fate of the Italian economy and the change in the prices of selected instruments. Therefore, most Forex brokers have decided to raise the minimum deposit margin requirements (decrease in leverage) for certain assets.
Limiting risk is also a risk
The purpose of reducing leverage is to protect investors from excessive exposure before the occurrence of unplanned, excessive losses, which may eventually lead to the creation of debt on the account.
The high-risk group includes mainly euro currency pairs and CFD instruments based on European stock indices (in particular, Italian, German and Eurostox). The reduction in leverage can be up to two times. Omitting such information on our part may, in extreme cases, result in a Margin Call or premature closure of the position (Stop-Out mechanism activation).
Recommended increased vigilance, limitation of risk exposure on the indicated instruments in the near future, and above all verification whether your broker also decided to temporarily increase the levels of capital collateral.
Elections in Italy
The upcoming elections may have a significant impact on the situation in Italian politics and the economy. The new electoral system favors a coalition, while polls report that none of the parties will, however, get the minimum required to run their own governments. According to experts, the scenario of concluding a center-right coalition is the best chance of success. And that would be a good result from the perspective of financial markets. The risk is a situation in which a right-wing party will come to power. It is her that promises to carry out thorough reforms, renegotiation of selected agreements with the European Union, as well as to strengthen relations with Russia.
The selections will run from 7: 00 to 23: 00 4 on March. The first exit-poll results should appear around midnight, while the final result will be known only after 14: 00 the next day.
