The Swiss franc shock of 2015 and what it taught about stops

[Amanhasnoname]

In January 2015, the Swiss National Bank removed its cap on the franc. EURCHF dropped by around 30 percent in minutes. Liquidity vanished and quotes disappeared.

Stops didn't fill near their levels. Many filled at prices far below, or couldn't fill at all while the market had no quotes. Some brokers went bankrupt because client losses exceeded deposits.

The event is a reference for tail risk in currency markets. It showed that stops can't be relied on in a one-way, no-liquidity move, that leverage magnifies a disaster, and that a pair considered stable can break.

Lessons for scalpers include avoiding positions in pegged or managed currencies without understanding the policy risk, keeping leverage moderate, and never assuming the market will always offer a price.

It also serves as a reminder to check how the broker handled the event. Some absorbed losses, and others passed them on to clients.

Brokers also reacted differently afterwards, with some raising margin on franc pairs for months and others changing contract terms. Reading what the broker did, not only what the market did, is part of understanding how a similar event could play out for the account.

How has the franc event influenced the way you trade managed currencies?