Market experts say the Swiss currency franc typically moves below 30 "pips" which is the measure of changes in exchange rates for currency pairs in a single day. When the cp was removed, this climbed to 1,500 pips in less than one minute.
This can be disastrous. Global FOREX dealer CMC Markets maintains there a small number of investors in New Zealand trading the Swiss currency compared to Europe. These traders lost money. Some dealers refunded affected clients' accounts instead of expecting them to pay. Said investors still lost all the money in their respective accounts although they were not left with a huge debt. Even private traders without any interests on the Swiss franc could have lost funds if the firm they traded with was affected.
New Zealand’s Global Brokers (trading as Excel Markets) was one of these companies. Investors were lucky enough that it was under regulation by the Financial Markets Authority so client money is separated from the firm's finances. However, not all dealers in New Zealand do that. Certain FOREX dealers impose restrictions on traders. CMC Markets have layered margins. This means that the higher the risk, the more funds you should invest. This protects both the brokerage and individual investors. After the Swiss crisis, these traders will feel relieved their investments have been tiered.
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