Yesterday, on July 6th at around 11 p.m. (UTC), the Silver market briefly fell by 10% to 14.399 USD before quickly recovering to around 15.9 USD. This phenomenon is commonly called a "flash crash" and mainly caused by a fat finger error or technical issues. It is still unclear what caused this crash, but it affected all exchanges and derivative providers around the globe.
Especially for businesses like 1Broker, who offer high-leveraged contracts, such extreme volatility leads to many unpleasant side-effects. In general, Stop Loss values are not guaranteed exit prices and many positions are force-closed with a negative value. In some cases, losses even exceeded the total account value which lead to negative account balances. Contrary to popular belief, high price volatility is not in our interest and does not increase our profits.
Apart from an outage due to high server load after this event, our trading engine worked correctly. However, we fully understand the frustration when losses are dramatically higher than the amount initially invested. Therefore, we decided to create an "emergency fund" to refund all losses exceeding the initial investments. We expect that in total ~65 BTC will be payed out in the coming hours. 1Broker will cover this amount in full from our reserves and no increase of fees is necessary.
To protect our traders in the future, we lowered the maximum leverage for our Silver and Gold market from 100 to 50.
If you have any questions, you can contact us at any time.