Trading CHF With Possible SNB Intervention?

With the SNB's history, we always need to keep the possiblity of FX intervention in mind for the CHF.
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Giles Coghlan
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A good question here, is it unwise to trade the Swiss franc? Given there’s a threat to the Swiss national bank intervention.

Now, if you just recall 2015, when the Swiss national bank gave up defending the peg, also, if you notice the number of times when they did intervene in the market and impacted the market, it tends to be large volatile moves.

One thing to be aware of is that if you are trading the Swiss franc, there is always the risk of the Swiss national bank intervention. Now, if you are not using high levels of leverage, then that shouldn’t be anything to worry about. Yes, you may get your stop hit.

You may get a little bit of slippage on a volatile on a volatile move, but as long as you’re not over leveraging, it’s something you shouldn’t be too concerned about.

However, having said that, if you have the choice of the Swiss franc or the Japanese yen at the moment, it makes sense to use the Japanese yen because there’s less likelihood of intervention with Japanese yen. Then there presently is with the Swiss franc. So is it unwise to trade the Swiss franc with the threat of SMB intervention?

Yes, it could be if you’re over leveraging and it also could be, if you’ve got the option of trading the Japanese yen or the Swiss franc, it makes sense to trade the Japanese yen at the moment.

So that’s just something to be aware of. Obviously we need to keep monitoring the situation and there are potential opportunities with the SMB intervening in the Swiss franc as well. However, they should only be embraced when you fully realize what’s happening. And if you’re just sort of casually trading the Swiss franc, you need to be aware that there is a risk of intervention.

How however small it currently is at the present. It serves you well to get it into your mind now, but Swiss franc does have intervention from a potential from the SMB. And obviously we have had some very large moves in the Euro Swiss franc, uh, and that did affect the Swiss franc pairs. So just to be aware of that, anyone trading the Swiss franc.

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