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The Swiss franc shock of 2015: when the 1.20 floor broke

For more than three years, Switzerland's central bank promised one euro would never cost less than 1.20 francs. On the morning of 15 January 2015, it dropped that promise without warning, and the market moved about 30% in minutes.

Story · 7-minute read · Updated 2026-10-21

The world before the shock

The Swiss franc has long been seen as a safe haven: a currency people buy when they're worried. During the euro debt crisis of 2010–2011, money poured into Switzerland.

The franc got so strong it began to hurt Swiss exporters and tourism. A watch made in Geneva was becoming very pricey for buyers in Europe.

So on 6 September 2011, the Swiss National Bank (SNB) made a bold promise. It would not let the euro fall below 1.20 francs. To defend that line, it said it would buy foreign currency "in unlimited quantities".

It worked. For more than three years, EUR/CHF hardly ever went below 1.20. The chart looked like a flat floor.

Many traders came to treat that floor as nearly risk-free. If the price can't go below 1.20, buying at 1.2010 looks safe. Some brokers offered high leverage on the pair.

What happened

By late 2014, defending the floor was getting expensive. The SNB had bought huge amounts of euros. And everyone expected the European Central Bank to start a big bond-buying program soon, which would weaken the euro further.

On 12 January 2015, an SNB vice chairman publicly called the floor a cornerstone of its policy.

Three days later, it was gone.

The moment everyone remembers

At about 10:30 am in Zurich on 15 January 2015 (around 4:30 am in New York), the SNB announced it was ending the floor "with immediate effect". It also cut its main deposit rate further below zero, to −0.75%.

What followed was one of the biggest moves in a major currency in modern times.

• EUR/CHF fell from about 1.20 to around 0.85 at the low, within minutes, by most reports.
• That's a drop of roughly 30% in a pair that usually moves less than 1% a day.
• Banks pulled their prices. For a while there was almost no one quoting a price at all.
• By the end of the day, EUR/CHF had settled near 1.00 to 1.04, still far below the old floor.

Swiss stocks also fell sharply, since a stronger franc hurts Swiss exporters.

Where the damage landed

The pain spread quickly to people and firms on the wrong side.

• Many traders' stop loss orders didn't fill near their price. With no buyers between 1.20 and much lower, some stops were filled hundreds or even thousands of pips away.
• Some traders lost more than everything in their accounts, leaving them owing money to their broker.
• US broker FXCM said client losses left it short about $225 million. It took a $300 million emergency loan from Leucadia to stay within capital rules.
• Alpari UK, a forex broker, went into insolvency within days.
• Others, from small brokers to some hedge funds, reported heavy losses.

What it teaches

1. A gap skips your stop

A stop-loss is a request to exit at about a price. When the market jumps over that price, the order fills at the next price available. Here, that was very far away. That's a gap, and it can happen in forex too, not just stocks.

Read how to set a stop-loss and gap trading explained to see how gaps form and what a stop can and can't do.

2. A "sure thing" is often the most crowded trade

The 1.20 floor felt safe because a central bank stood behind it. That's exactly why so many traders piled in with leverage. When the floor broke, they all needed out at once.

3. Leverage turns a gap into a debt

With low leverage, a 30% move hurts a lot. With high leverage, it can wipe out an account and then some. This is why US rules cap retail forex leverage at 50:1 on major pairs, and why we risk a small slice per trade. Try the numbers in the margin calculator and read leverage and margin explained.

4. Central banks can change their minds

A central bank's promise is a policy, not a law of nature. Watch for scheduled and unscheduled decisions with an economic calendar. Our EUR/CHF guide covers what moves that pair today.

What it doesn't mean

• It doesn't mean stops are useless. On almost every trading day, stops fill near their price. This was an extreme exception, which is why it's famous.
• It doesn't mean central banks can't be trusted. It means any policy can change, and markets can reprice in seconds when it does.
• It doesn't mean currency trading is a scam. It means leverage and gaps are real risks to plan for.
• Rules have changed since. Many brokers now offer protection so retail clients can't lose more than their account balance. Check your own broker's terms.

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