Anxious brokers are forcing clients to stump up more cash than ever against trading positions on the results of Britain's European Union vote in the hope of avoiding the catastrophic losses incurred when the Swiss central bank suddenly dropped its peg to the euro last year.

In some cases, day traders and other retail risk-takers will need to post 12 times the normal ante to take a position in the movement of pounds sterling, which will dive sharply if Britons vote to leave the 28-member economic bloc and rally if the "Remain" camp wins.

Those buying contracts for difference (CFDs), a derivative instrument which tracks market movements, in European stock indices, gold, the euro and a range of asset classes, will also be forced to post double, triple or higher multiples of the normal minimum to reduce the margin of loss if their bets go wrong.

Despite relative calm on markets this week, badly positioned investors could incur heavy losses if Britain votes to leave the EU. Photo: Jessica Shapiro

The safeguards, which some trading firms say are unprecedented, follow the loss of billions of dollars in January last year when the Swiss dropped their currency peg to the euro, driving the franc up nearly 20 per cent against the common currency.

The move caught banks, brokers and investors by surprise, wiping out some and forcing heavy losses on to retail dabblers and other part-time traders.

Several online foreign exchange brokers – some of which had allowed clients to scale up their bets by 500 times on the assumption the moves would be minuscule – were caught out by the instantaneous spike, which burst through pre-set stop loss levels designed to protect client losses.

The risk of sharp moves in the pound hit record highs a week ago, according to options pricing.

Thousands of clients were left nursing losses that vastly exceeded the money in their trading account, putting brokers on the hook, and putting several out of business.

Saxo Group, for instance, lost around $US107 million as a result of the event, some of which it has attempted to recover from clients.

Saxo said on Wednesday that it had more than trebled, to 7 per cent, the margin on its CFDs.

"Under normal conditions, with moderate volatility, if you wanted £100,000 worth of exposure to sterling, you'd put up £2,000 as margin," said chief executive for Saxo in Australia Ben Smoker. "But under a high volatility environment, you'd increase that to 7 per cent, or £7000 against a £100,000 position."

Several investment banks that transact in large volumes in the currency markets also suffered losses running into the hundreds of millions of dollars as a result of the Swiss peg removal in January last year.

On Tuesday, UBS took the unprecedented step of alerting its institutional clients that trading costs may rise or that quoted prices may become "indicative" or non-tradeable if volatility is excessive.

This could impact the bank's clients that use algorithms or automated orders to close or enact currency trades.

"In the event that extreme market moves occur, giving rise to limited liquidity in certain currencies, we may not be able to fill limit orders or take profit orders at the levels, or using the methodologies, expected in normally functioning markets," the bank said, adding that it would make decisions in good faith and in a commercially reasonable manner.

CMC Markets chief market strategist Michael McCarthy said on Wednesday that brokers were wary after the damage wrought by the unexpected shift in Swiss policy.

CMC has increased its margin requirements across all tiers of exposure, with the highest now at 16 per cent, or $1 in capital for every $6.50 invested.

"First of all it's insuring that clients have the funds in their account to protect their positions if there should be major moves," McCarthy said. "It's also a very clear way to spell out that we see a potential risk here, and that action is required."

The risk of sharp moves in the pound, for one, hit record highs a week ago, according to current options pricing.

"These higher margins are all a reflection of near-record implied volatility in the options markets," said IG's chief market strategist, Chris Weston.