Leverage changes before news and the margin surprise it brings

[Amanhasnoname]

Many brokers reduce leverage ahead of major events, or on weekends. The change is usually announced by email or in a notice that few people read, and it can hit open positions.

When leverage drops from 500:1 to 100:1, the margin required for existing positions rises accordingly. An account that was comfortable yesterday may be near a margin call today. Positions can get closed automatically if free margin falls too low.

It's a common source of unexplained liquidations. The price didn't move much, but the required margin did.

Checking the broker's leverage policy is worthwhile. Some apply dynamic leverage tied to position size or account equity. Others have fixed rules for specific instruments or time windows.

A safe approach is to size positions assuming the lowest leverage that might apply, and to keep extra free margin around events.

Has a leverage change ever caught your account off guard?