Traders warn of 'carnage' as Saxo Bank says it will amend Swiss franc trades

16th Jan 2015 13:00

Saxo Bank has said it could revisit the rates for transactions conducted after the Swiss National Bank's (SNB) decision to scrap its cap on the franc.The Danish lender, one of the biggest figures in retail foreign exchange trading, said it had filled client orders in an "extremely illiquid market" around the SNB's move on Thursday, which is already being touted as a potential cause of huge losses for some investors."Once we are better able to establish the market liquidity, all executed fills will be revisited and amended to more accurate levels," Saxo Bank said in a statement on Friday."This may result in a worse execution rate than the originally filled level."Meanwhile, some traders claimed that the SNB's decision could lead to a "carnage" in the market, with hedge funds bearing the brunt of massive losses.Forex.com, the trading arm of Gain Capital, opted to briefly suspend trading in Swiss francs after registering a sharp hike in the currency's volatility. On EBS, the main system for trading between the major lenders worldwide, the euro, which had spent the last couple of years ranging between 1.21 and 1.20 francs, was momentarily quoted at 0.0015 francs.Broker IG Group said it forecast a loss of about £30m, after many of its clients successfully closed out their Swiss franc positions more quickly than the broker itself managed to secure its hedged positions on the currency in foreign currency markets. Canaccord issued a downgrade on IG as a result.IG shares were down 1.20% to 701.00p at 12:53 on Friday.