The Floor
From September 2011 the Swiss National Bank maintained a floor on EUR/CHF at 1.20. It would not allow the euro to buy fewer than 1.20 francs, and it enforced this by creating francs and buying euros in whatever quantity was required.
The reason was economic self-defence. During the eurozone crisis, money fleeing the euro poured into the franc, and a soaring currency was strangling Swiss exporters and tourism. The floor was a dam.
For three years it held, and the market came to treat 1.20 as something close to a law of physics. EUR/CHF traded in a narrow range just above it. Positions were sized as if the downside was bounded, because for three years it had been.
Days before the end, SNB officials publicly reaffirmed the commitment.
15 January 2015
At 09:30 Zurich time, with no warning, the SNB announced it was discontinuing the minimum exchange rate.
What followed is one of the most violent moves ever recorded in a major currency pair. The franc surged roughly 20% in under a minute, and by some measures close to 30% against major currencies at the extreme. For a period of around 45 minutes there was virtually no liquidity — meaning that for stretches of that window there was no meaningful price at which orders could be filled.
The SNB itself paid dearly for the whole episode. It reported a first-half 2015 loss of CHF 50.1 billion — roughly $52.2 billion — largely the revaluation of the enormous euro reserves it had accumulated defending the floor.
Why Stop-Losses Did Not Save Anyone
This is the mechanic every leveraged trader needs to understand, and the reason this event is on a broker-safety page rather than a history page.
A stop-loss is not a guarantee of a price. It is an instruction: when the market reaches this level, turn my position into a market order. Filling that order requires a counterparty at some price.
When EUR/CHF fell through 1.20, there were no bids. Orders queued at 1.19, 1.15, 1.10 did not execute there — they executed wherever the first real liquidity appeared, in some cases 20% or more away. A trader who believed they had capped their loss at a few hundred discovered the loss was tens of thousands.
The technical term is gap risk or slippage, and leverage multiplies it exactly as it multiplies everything else. At 100:1 leverage, a 20% adverse gap does not cost you your position. It costs you your position twenty times over.
Negative Balance: Owing Your Broker Money
Here is the part that shocked retail traders. When losses exceed the money in the account, the deficit does not simply vanish. Under the terms in force at many brokers at the time, the client owed the difference.
People who had deposited a few thousand received demands for sums far larger. Some brokers pursued the debts; some wrote them off; some could not afford to write them off because they were insolvent themselves.
The damage ran straight through the industry:
- FXCM, then one of the largest retail brokers in the world, suffered around $225 million in client losses — money its clients owed it and could not pay — and required an emergency bailout to keep operating.
- IG disclosed a hit of roughly £30 million.
- Several smaller brokers were driven into insolvency outright, some within hours.
The brokers were not gambling against their clients. They had passed the exposure on and were left holding debts owed by accounts that no longer had money in them.
What Changed Afterwards, and Why It Matters Now
The 2015 shock is the direct ancestor of protections that retail traders in several jurisdictions now take for granted:
Negative balance protection. Under the ESMA product-intervention framework adopted across the EU — and mirrored by the FCA in the UK — a retail client cannot lose more than the funds in their trading account. If a gap blows through the balance, the broker absorbs the deficit. This is not a courtesy; it is a regulatory requirement, and it exists because of days like this one.
Leverage caps. The same framework limits retail leverage by instrument — most restrictively on the most volatile products. Lower leverage does not prevent gaps, but it changes a wipe-out into a survivable loss.
Margin close-out rules. Brokers must close positions when account equity falls to a defined percentage of required margin, rather than letting an account drift to zero and beyond.
Three things follow for anyone opening an account today.
Check that negative balance protection actually applies to you. It attaches to retail clients under specific regimes. Trading through an offshore entity of the same brand, or accepting classification as a professional client, can remove it — and professional classification is often marketed on the higher leverage it unlocks while the protection you surrender gets a single line. Our explainer on elective professional client status covers exactly what is given up.
Understand that "guaranteed" and "stop-loss" are different products. A standard stop is best-efforts. Some brokers offer guaranteed stops, usually for a premium, which do hold the price through a gap. In January 2015 that distinction was worth more than any spread saving.
Read the leverage number as a risk multiplier, not a feature. The offshore broker advertising 500:1 is not offering you more opportunity than a regulated one at 30:1. It is offering you the 2015 outcome with a smaller starting balance. That trade-off is set out in offshore broker leverage and leverage caps by instrument.
The Lesson in One Line
A central bank told the market for three years that a level would hold, reaffirmed it days before, and then removed it without notice. It was not lying — it changed its mind because holding the floor had become more expensive than breaking it.
No promise about a price is stronger than the interest of the party making it. Size your positions as though the thing everyone considers impossible happens on an ordinary Thursday morning, because on 15 January 2015 it did.
For the other side of that coin — a central bank that tried to hold a level and was beaten — see Black Wednesday. For why any of these rates float in the first place, see how the forex market was born.
Capital at risk. CFDs and leveraged forex are complex instruments and a majority of retail accounts lose money trading them. This is general information, not financial advice.