ESMA & Trading Outside of the EU

[SUNSEEKER]

Good article again Tom.

Ah, but mate, regulators don't work for the benefit of the consumers serviced by their respective industry - they work firstly for their political masters and secondly for the industry constituents. The most important political masters are the ones in power in central government - their employers. The most important industry constituents are the biggest - who have been and will be around longest and who have most clout with the political masters.

The consumers are only important as a potential (but disorganised) source of embarrassment for their political masters, but I suspect in the current ESMA CFD margin situation, the groundswell of opinion in favour of tougher regulation came from the large players in the financial sector who could see lots of potential investment cash drifting into self-investment schemes rather than their own products. Once they'd convinced the regulator it was a free perk for them, they must be calculating much of that previously self-managed money will now be coming their way.

Well, so it goes.

Thank you for the lesson. Where is Ann Rand when you need her.

 

[tomorton]

It'll be interesting to see what the SB industry does about this. I see LCG reduced their min stake levels to 10p / point / pip. Don't know if that's permanent of course. I do wonder if the unexpected side-effect of the 2018 ESMA regulations will be more subtle inducements to open an account, not less. Don't expect all such measures to be put on the table before the end of the 3mth trial period, these are commercially sensitive areas, and market share is key.

Meantime, without bragging, my account 's sufficiently well funded I don't see a major impact likely. 'course, I won't be having 15 or 20 positions open at the same time any more, but maybe that wasn't such a good idea anyway........

 

[dowsp]

If the Uk exits the EU via Brexit...

Could this realter or drop the ESMA situation ?

What is the Minimum that you can trade the Dow with the OZ brokers

ie how much would you need to place in an account to trade the minimum stake with their cheaper type brokers..

I very much doubt that we could trade the Dow with them similar to the prices of Spread betting where we could trade as low as 50 P or 1 GBP a point...

I suspect that it willl be the equivalent of more like 5 to 10 GBP a point...maybe like the Mini Dow contact in the USA..

I think at one time you could open a USA account for as low as 3 to 5 K GBP or maybe even in $s

if so..
What would be the difference between opening a USA account V an OZ account..

I just noted Sunseekers Toms opinion on leaving the EU and its effect on ESMA on his website...

31st July 2018 at 6:40 pm

Tom, I wonder what UK CFD brokers will do once the UK finally leaves the EU. Do you think they’ll revert back to 200:1 or so margins, and will some of them offer accounts to EU residents?
Reply

Tom H says:
31st July 2018 at 9:29 pm

I believe the FCA will still want to enforce the rules that ESMA has set in motion.

How many rich Pro Traders are there likely V small traders say within the UK ?

What % difference I wonder....

Is it enough to satisfy the Brokerages or Spread betters not to really be bothered about Small traders any more and welcolme the FCA ruling...

IF there is a much greater % of smaller traders... Then those who run such services have not really stuck up for the small trader IMO...to fight the FCA ...

If there is enough conviction and demand... Small traders should rebel and demand such GOVT BS regs to be overruled...

 

[pigbear]

On speaking with City Index,

You can still trade Options on things like the Indexes with just the given quoted prices...
but you cannot get it on a lower margin price for say Monthly Options...

where for eg a call option on say August Wall Street 25800 call option for eg, may be quoted at say 100 points at say a stake of 1 or 2 GBP a point... (a total of either 100 GBP or 200 GBP ) and before ESMA you may had paid a lower fee on a margin at say 35 points... per point to own that option ...(say 70 or 140 GBP for eg out of your account)

but instead since ESMA has come in... you now will have to pay the FULL quoted price of 100 points..
(for eg say either 1 x 100 = 100 or 2 x 200 = 200 GBP)

BUT you dont have to pay 10 Times more than 100 points that could cost 100 x 10 = 1000 ..or more
or have to pay say 10 x the prior lower fee of 35 points that would have been 35 x 10 = 350

so you could hold a position on the Dow Jones for say 100 points X your stake per point..

I am told if you are say buying Daily Wall Street Options that can be as low as say 5 to 10 points...
that you can still pay those same prices as before ESMA came in....

so you dont have to pay 10 x that ammount which say could have been 10 x 5 = 50

NOW thats what CITY INDEX TOLD ME...

BUT when I asked IG Index.... I got two different suggestions...

Initially I was told similar as what City Index told me...

BUT I asked for written conformation.... and they enquired with their options desk..
They said that the prices would be 10 x more....

SO I AM STILL UNSURE HOW IGs OPTIONS Prices may occur....

when I last looked they were still seeming the same as they used to before on certain Options, such as the daily and weekly options that they offer on say Wall St for eg...

ON their monthly options... they for some reason are are only showing or offering very few listed ...

that maybe because they are intending to ammend their pricing on what they offer..

BUT in theory based on what City Index told me.. if your just buyig straight Call or Put Options and NOT SELLING Options on Margin.... then you should not need to be paying 10 X the amount...

CITY INDEX always used to offer their option prices on wall st for eg.., at a reduced margin rate..

BUT I dont think IG did offer their options at a lower margin rate...

IF you trade options with these companies however... at least you can still trade certain Index like markets at low costs....

You be on what they describe as a restricted account... where you are limited to only being able to trade certain markets.. or may you wont be able to trade futures but could trade or BUY straight call or put Options with them...

IGs Options Customer service no longer exists... so you cannot speak direct with them..which has become one of their real downfalls as at one time you could have spoke direct to them..

Where as City Index you can still speak with their Options Customer service..

However if you sold an option for eg SPX Aug put 24700 Aug trading at 4 - 13 at let say £3 stake then what is the margin required. When you use the margin calculator it comes up blank.

 

[tokyojoe]

This can be done very simply, if for example you want to trade £1 per point on the dax, you need approx £600'ish in the account for every pound.

If you have intra-day movements of approx 500-700 points & you are a point & click merchant then there's more than enough potential on the table.

Stick a few grand in, if you can't afford to stick a few grand in the account to play small stakes then this is not the game to be in.

 

[SUNSEEKER]

I HAVE TO GET THIS OFF MY CHEST.....

I am trading on an account where I am not pro and I am short the Dow. I am 30-40 points in profit, so i move my stop loss to break-even, expecting the margin to reflect that. NOPE... my margin is still 5%.

I called the CEO of the firm (one perk of having worked in the city), and asked him if that was really true. I won't say his name because he was not very flattering to ESMA... He said "yes, and not only that, those clowns won't even accept that we lower margin if the client has a guaranteed stop-loss"...


So even a guaranteed stop loss will not lower margin requirements.

 

[Pat494]

I had a £200 bonus from XM brokers on joining about 2 years ago. This morning it had gone !
I contacted XM and they said that they had to comply with esma rules !

Another reason to leave those thieving b*stards of the EU.

 

[tokyojoe]

This can be done very simply, if for example you want to trade £1 per point on the dax, you need approx £600'ish in the account for every pound.

If you have intra-day movements of approx 500-700 points & you are a point & click merchant then there's more than enough potential on the table.

Stick a few grand in, if you can't afford to stick a few grand in the account to play small stakes then this is not the game to be in.

Just to add, the game has changed for small investors/speculators wanting to trade multiple positions, this new ruling will ensure less exposure, less open positions but if you intra day trade & choose a high volume/volatility instrument you simply need to ensure the position doesn't get closed out due to a margin call.....i.e £1 per point requires approx £650'ish minimum deposit, therefore a few grand acts as the buffer, because the the margin call on the minimum deposit will automatically close you out at 50%....£325'ish @ £1pp (if you let positions run that wide on a normal day with that sort of enormous stop).

 

[trendie]

was youtubing, and saw this ad. New Zealand company. Blackbull Markets.
never heard of them before.
am not recommending them.
do your due diligence.

https://blackbullmarkets.com/trading-products/account-types/account-comparison

 

[dowsp]

What I posted about the use of trading Options with the egs of City Index or maybe IG index.. was if you are BUYING straight calls or Put options....

and as far as I am aware .... they only offers the prices along the egs that I gave for Purchasing (Buying ) options... and NOT selling them....

As far as I am aware...
When you sell an option (other than closing an existing bought option postion ).... thats when you do need to have a required margin in your account... and I think unfortunatly that is unlikely to still be at the past rates... and probably are now at the new ESMA related rates...(maybe 10 X more)

OR IF we are lucky.... they may make us just pay at the FULL rate that they quote....

so again if say a sell price was quoted a 100... we would have to pay that full price.... and not get away with a different fee ( lower or higher cost.).(maybe depending if your selling a call or put.) as they may had used to offer....

With City Index... Verses IG Index... If I recall in their Monthly Options... they may have differing rules as to how much stake mimimum stake you can trade with them...

It maybe that with City Index... when trading US Indices or indexes. that they have a minimum of 3 GBP per point value .... where with IG Index as far as I recall you can trade those options at just as little as 1 GBP a point...
which is much better... as long as IG remain like that and at the same prior rates..

BUT I think also City Index may have changed at some stage to offer a Min a 2 GBP a point..

But you would need to check with them....

Proably best to ask to talk with the options dept and also ask about selling Options since ESMA to try to gain a better or hopefullly correct understanding..

When I checked IG yesterday... Their prices still seemed as they were prior to ESMA... so I am hoping that they do not increase them by 10 X...

and I am not so sure that I want to ask them... incase they do increase them.. whiles they still appear to be priced as they were... ie at reasonable prior pricing...

Depending on what you are willing to risk or can afford/ pay with straight calls or puts...and how far from the money you may buy..... if you get the timing and level right for the stronger faster moves you can still succeed... as long as the SB companies are NOT manipulating the price... which no doubt they appear to do... and thats one of the major problems with them and Spread betting options..

But if you do get the timing and levels of moves right and sell the positions at the right time ... it can still be quite a good opportunity to profit from options.. at as low a risk as maybe possible...

Daily options if you can get them right.. can be very profitable..

but I am very sorry to say... that since the large decline back in Jan / February... they have increased their prices dramatically..

At one time ... I could by an option on the Dow for 3 to 5 points... at about a 100 points out of the money...
and if you got a 200 point move or more... Potentially I could make 100 GBP profit quite easy..

BUT NOW.... I am having to pay 5 points usually and I can only buy them at 200 to 300 points or more out of the money... so if you get a 200 to 300 point move.... you really struggle to make a profit with such cheap options.

If you can get it right a few times... you can easily go from 5 to 10 point or GBP risk to making several hundreds to 1000s in a few days...

Ive seen 400 GBP option trades turn to 13 K in a short period under 2 months...

pigbear
However if you sold an option for eg SPX Aug put 24700 Aug trading at 4 - 13 at let say £3 stake then what is the margin required. When you use the margin calculator it comes up blank.

 

[dowsp]

I assume then that is now about 10 Times more than what you used to pay for the DAX.... and would be roughly the same for the other main Indexes / indices like even the USA ones or DOW / Wall Street or SPX 500...

I cannot recall what the prices used to be as I mainly trade options...
but if I recall... it has been somewhere between 80 to 120 GBP to trade 1 GBP a point..... (I got to be careful as I sometimes used to trade at 50 p a point where the margin price was half that..) and I get mixed up..

So if say it was 60 GBPs to trade an Index... then I assume if its now 600 GBP that they have now increaed it by 10 X...

So I suppose thats still as cheap as we are likley to get now in the UK...

If you were to open a USA account with one of their brokers and wanted to trade an Emini DOW Jones contact.... from what I can see on doing a quick search... it would require about a $5400 Margin to trade that market... at half the normal INDU , or Wall Street / DOW Jones contract rate...which is normally at $10 a point... but with the E Mini its half that rate... so its as low as $5 a point....

This gives egs of margins for various markets.. look under the Indices to find the Emini Dow

Name Symbol Exchange Init. Margin Day
E-Mini Dow ($5) YM CBOT $ 5390 $ 500

https://futuresonline.com/education/products/margin-requirements/

but $5400 is about 4100 GBP

So I wonder how that compares to opening an Austrailian CFD or similar type of account ?

So even if we traded at 5 GBP a point in a UK spread bet company..
that would be 5 x 600 = 3000 GBP that would still cheaper than opening a USA account...
but again is it cheaper than a OZ CFD account.. can anyone confirm ? who has investigated OZ accounts

No doubt It could still be that UK spread betting is still reasonable if the above comparision is anything to go by....
So we must have had it really good before...


PS.... I just phoned IG index to double check the price of Margin requirement for Wall Streets Dow Jones or INDU Market since ESMA...

It is actually a Margin requirement of 1257 GBP to trade Wall Street Market at 1 GBP a Point... so it must have used to have been about 125 GBP required margin to trade Wall Street at 1 GBP a point

or 628 GBP to trade at 50 p a point..

I also found out that you can now trade as low as 25 p a point that requires a 316 GBP margin...which I was never aware about..

SO to trade Wall Street Mini at 5 GBP a point would be 6285 GBP...

which is more expensive that opening a USA account to trade the Dow Emini that was $5400 or about 4100 GBP..

Its 2000 GBP cheaper...


but you can also trade these in other currencys.... such as the USA and OZ dollar ...and I THINK at similar levels as you can trade wall st at..

so for eg...

to trade ONE US dollar per point requires 963 GBP Margin

and to trade ONE OZ dollar is the cheapest and requires 710 GBP...

and you can definately half those...for USA to trade half dollar at a margin of 481 GBP

or to trade half OZ dollar requires 355 GBP

Maybe you can half those again to trade at 0.25 a dollar... about 240 GBP for USA $ or 178 GBP for OZ $

Can anyone find a webpages on IG indexs website that actually shows the Margin Rates which actually shows the value of 1257 GBP a Point on Wall Street...

All I can find is a ref to it being a 5 % Margin rate...

This can be done very simply, if for example you want to trade £1 per point on the dax, you need approx £600'ish in the account for every pound.

If you have intra-day movements of approx 500-700 points & you are a point & click merchant then there's more than enough potential on the table.

Stick a few grand in, if you can't afford to stick a few grand in the account to play small stakes then this is not the game to be in.

Thanks for the link...they offer Wall Street ... Will try to check it out...

I JUST HAVE Checked them out at initially... and I think they have promising potential..

They say that ou can trade a CFD on the US 30 Wall Street with a Margin of somewhre between 500 to 800 GBP to trade Wall Street at 1 GBP a point....

That is less or could under half of what IG Index --- 1257 GBP is quoting to trade at 1 GBP a point.....

At one stage they did quote 503 GBP for margin to trade it as a CFD when they later checked...

and then said it could offered cheaper with it being in GBPs...so I am not exactly sure just how cheap that they could offer it at..

seems you could sign up and pay in quite quickly...and fund almsot instant from what they said..

but will need to do some further research..

Its only been established since 2014 thou.. and they say they have UK clients some running from ESMA..

trendie

was youtubing, and saw this ad. New Zealand company. Blackbull Markets.
never heard of them before.
am not recommending them.
do your due diligence.

https://blackbullmarkets.com/trading...unt-comparison

 

[tokyojoe]

I assume then that is now about 10 Times more than what you used to pay for the DAX.... and would be roughly the same for the other main Indexes / indices like even the USA ones or DOW / Wall Street or SPX 500...

I cannot recall what the prices used to be as I mainly trade options...
but if I recall... it has been somewhere between 80 to 120 GBP to trade 1 GBP a point..... (I got to be careful as I sometimes used to trade at 50 p a point where the margin price was half that..) and I get mixed up..

So if say it was 60 GBPs to trade an Index... then I assume if its now 600 GBP that they have now increaed it by 10 X...

So I suppose thats still as cheap as we are likley to get now in the UK...

If you were to open a USA account with one of their brokers and wanted to trade an Emini DOW Jones contact.... from what I can see on doing a quick search... it would require about a $5400 Margin to trade that market... at half the normal INDU , or Wall Street / DOW Jones contract rate...which is normally at $10 a point... but with the E Mini its half that rate... so its as low as $5 a point....

This gives egs of margins for various markets.. look under the Indices to find the Emini Dow

Name Symbol Exchange Init. Margin Day
E-Mini Dow ($5) YM CBOT $ 5390 $ 500

https://futuresonline.com/education/products/margin-requirements/

but $5400 is about 4100 GBP

So I wonder how that compares to opening an Austrailian CFD or similar type of account ?

So even if we traded at 5 GBP a point in a UK spread bet company..
that would be 5 x 600 = 3000 GBP that would still cheaper than opening a USA account...
but again is it cheaper than a OZ CFD account.. can anyone confirm ? who has investigated OZ accounts

No doubt It could still be that UK spread betting is still reasonable if the above comparision is anything to go by....
So we must have had it really good before...


PS.... I just phoned IG index to double check the price of Margin requirement for Wall Streets Dow Jones or INDU Market since ESMA...

It is actually a Margin requirement of 1257 GBP to trade Wall Street Market at 1 GBP a Point... so it must have used to have been about 125 GBP required margin to trade Wall Street at 1 GBP a point

or 628 GBP to trade at 50 p a point..

I also found out that you can now trade as low as 25 p a point that requires a 316 GBP margin...which I was never aware about..

SO to trade Wall Street Mini at 5 GBP a point would be 6285 GBP...

which is more expensive that opening a USA account to trade the Dow Emini that was $5400 or about 4100 GBP..

Its 2000 GBP cheaper...


but you can also trade these in other currencys.... such as the USA and OZ dollar ...and I THINK at similar levels as you can trade wall st at..

so for eg...

to trade ONE US dollar per point requires 963 GBP Margin

and to trade ONE OZ dollar is the cheapest and requires 710 GBP...

and you can definately half those...for USA to trade half dollar at a margin of 481 GBP

or to trade half OZ dollar requires 355 GBP

Maybe you can half those again to trade at 0.25 a dollar... about 240 GBP for USA $ or 178 GBP for OZ $

Can anyone find a webpages on IG indexs website that actually shows the Margin Rates which actually shows the value of 1257 GBP a Point on Wall Street...

All I can find is a ref to it being a 5 % Margin rate...






Thanks for the link...they offer Wall Street ... Will try to check it out...

I JUST HAVE Checked them out at initially... and I think they have promising potential..

They say that ou can trade a CFD on the US 30 Wall Street with a Margin of somewhre between 500 to 800 GBP to trade Wall Street at 1 GBP a point....

That is less or could under half of what IG Index --- 1257 GBP is quoting to trade at 1 GBP a point.....

At one stage they did quote 503 GBP for margin to trade it as a CFD when they later checked...

and then said it could offered cheaper with it being in GBPs...so I am not exactly sure just how cheap that they could offer it at..

seems you could sign up and pay in quite quickly...and fund almsot instant from what they said..

but will need to do some further research..

Its only been established since 2014 thou.. and they say they have UK clients some running from ESMA..

trendie

Hi Dowsp, no disrespect, but your mindset is exactly the opposite of my point......the Dax isn't more expensive, the margin required is much higher, simple as that !

At the end of the day, £1 pp is £1pp...... not 10 times more expensive !

Someone running a £100k account will be able to take large positions, simple.

This is spread betting, I am speaking on behalf of people who SB, who are not even engaging with the real market, keep it simple, if you are spread betting you are not a sophisticated investor, you are a speculator, end of story I'm afraid.

Those with brains will trade the London hours, the SB will not wander too far from the DMA price.

Question for you, do you make a consistently good living from options trading ?

 

[hatemypips]

Hi Metro,

I received this email today from my broker (IG) It seems they are willing and able to allow their clients to relocate their accounts to different juristictions enabling them to use much higher margin rates.

Dear Mr. Brads

We have been receiving lots of questions from clients about the other locations in which we operate, so we have put together some information which you may find useful.

We operate 16 offices across the globe and are regulated in all of them, from the Financial Conduct Authority (FCA) in the UK to the Australian Securities and Investments Commission (ASIC) in Australia and many places in between.

All of our global offerings are compliant with the relevant local regulation and therefore our products may vary slightly by office, as may access to certain other features. For instance, Australia does not have a compensation scheme equivalent to the Financial Services Compensation Scheme (FSCS) in the UK, but does operate an equivalent Financial Ombudsmen Service (FOS) to handle customer complaints.

Across all of our offices, we always strive to treat our customers fairly and focus on delivering the best possible customer outcomes. We also strictly apply client money rules in all of our global offices, meaning that your client money is segregated and protected to the highest possible standard. Whichever global offering you choose, you’ll receive the same market-leading technology and unrivalled support that you expect from IG.

How to apply
If you decide you’d like to open an additional account with another IG office, you’ll need to complete a new application form. This is because your new account will be entirely separate from your UK account, with a new username and password.

From the global comparison page, please click on the location you are interested in for more details.
We're here to help
If you have any questions about this or need assistance with your account, our highly trained client services team is available by phone or email 24 hours a day from 8am Saturday to 10pm Friday.

Kind regards

IG

Here is a link with tons of info on the subject:

https://www.ig.com/uk/compare-our-l...ID=22380&tid=1852f6c46be336ebdac6fce764208e20

Such big brokers like IG or Нotforex won't crash (black swan tested), so change jurisdiction and don't be afraid of unfair treatment, reputation doesn't know locations or regulations

 

[dowsp]

Not sure that I understand all what your saying...

I suggested that the new margin rate since ESMA is now 10 X more that what it used to be on SB...and also indicated the to trade Wall St on IG is now costing more than the figure you indicated for the DAX..for a 1 GBP Per Point trade..

Eg: 1257 GBP for Wall Street V what you indiated the Dax to be..approx 600 GBP

... I assume you referred to SB rates with one of the UK companies..

Originally Posted by tokyojoe View Post
This can be done very simply, if for example you want to trade £1 per point on the dax, you need approx £600'ish in the account for every pound.

Does it make any difference what time one trades or which Market...

Does the Dow make bigger point ranges than the Dax in general ? some traders suggest that it does...

I dont trade the Dax so I am not familiar with it...

But many people trade the Dow ...its a 24 hr market...which I assume all IG Index Markets are ? if they are on futures... but the markets will move more during the main cash market hrs.

I assume also that you can trade the DAX and FTSE at 24 hrs on futures..

but do those markets move similar to the Dow... or does the Dow move similar as the DAX /FTSE during those main market times... at times they do... at least until the main US markets open..

but do these markets moves the same ammount of points if when say when they may appear to be moving similarly at certain time periods..

As far as I am aware they do not... and the Dow generallly make bigger range moves.. but its downfall can be its more volitile..if it goes agaisnt you..

So the Dax at times maybe a safer market...againt volitile fast moves..

It is often suggested that the USA markets tend to move most of the Market indices more... but main moves or pivots of ranges for a day...also do occur from earlier in the day European hours...or on overnight sessions..

it depends how one trades and what method you may look to use..

some try to find a days high point before entry... some can get in well on a trend.. each to their own if they get results..

Good option traders can make money at lower cost , lower risk is whatI was suggesting...

so they maybe able to turn smaller amounts of money to become reasonable sized accounts that they may later also use with Futures as well..I was just indicating that its possible to still trading indices at lower costs if you can trade options effectively.and I have witnessed someone do it..

Hi Dowsp, no disrespect, but your mindset is exactly the opposite of my point......the Dax isn't more expensive, the margin required is much higher, simple as that !

At the end of the day, £1 pp is £1pp...... not 10 times more expensive !

Someone running a £100k account will be able to take large positions, simple.

This is spread betting, I am speaking on behalf of people who SB, who are not even engaging with the real market, keep it simple, if you are spread betting you are not a sophisticated investor, you are a speculator, end of story I'm afraid.

Those with brains will trade the London hours, the SB will not wander too far from the DMA price.

Question for you, do you make a consistently good living from options trading ?

 

[dowsp]

I spoke with the IG Index Austrailian office to ask about what their mimimum Margin rates are for trading Wall Street on CFDs..

I was informed that you can trade as low as $1 Austrailain Dollar...at a Margin Rate of $126

$1 OZ dollar is about ( UK ) 50 pence
$2 OZ dollar is about (UK) 1 GBP

so the margin on (OZ ) $2 or (UK ) 1GBP is about (OZ) $ 252 or (UK) 126 GBP..

That is about the same as what the IG UK rates were before ESMA...

and is presently since ESMA... now 10 Times Cheaper...

I am not sure what other issues is needed to be considered...

but it seems now the cheapest option that I have found so far as a way to around ESMA to be able to pay less margin to trade Wall Street and I assume similar for other markets..

Has anyone actually opened an OZ IG account that maybe they can confirm or tell about about any other issues that needed to be considered that may be a problem..

 

[kalott]

I spoke with the IG Index Austrailian office to ask about what their mimimum Margin rates are for trading Wall Street on CFDs..

I was informed that you can trade as low as $1 Austrailain Dollar...at a Margin Rate of $126

$1 OZ dollar is about ( UK ) 50 pence
$2 OZ dollar is about (UK) 1 GBP

so the margin on (OZ ) $2 or (UK ) 1GBP is about (OZ) $ 252 or (UK) 126 GBP..

That is about the same as what the IG UK rates were before ESMA...

and is presently since ESMA... now 10 Times Cheaper...

I am not sure what other issues is needed to be considered...

but it seems now the cheapest option that I have found so far as a way to around ESMA to be able to pay less margin to trade Wall Street and I assume similar for other markets..

Has anyone actually opened an OZ IG account that maybe they can confirm or tell about about any other issues that needed to be considered that may be a problem..

"I was informed that you can trade as low as $1 Austrailain Dollar"

Seems they need to update the information about "micro" contracts?

https://www.ig.com/au/help-and-supp...rges/what-are-igs-indices-cfd-product-details

Switzerland have GBP contracts on a few indices

https://www.ig.com/en-ch/indices/indices-cfd-details

 

[Pat494]

This is a letter I got from XM.


Important: Implementation of ESMA Product Intervention Measures on CFDs
Dear Valued Client,

Further to our previous notification (as shown below), we would hereby like to remind you that the new restrictive measures of ESMA on the provision of CFDs, applicable to all investment firms established and regulated in the European Union, like XM UK, are effective as of today, 1st August 2018. As a result, the changes effected with regards to your trading account(s) are summarised below:
new higher margin requirements (i.e. lower leverage ratios);
the margin close-out rate, on a per account basis, has increased from 20% to 50%;
permanent removal of all trading benefits (e.g. bonuses and XM points).

In light of the changes above, you need to ensure that for any outstanding trading positions opened before 1st August 2018, your accounts remain sufficiently funded to avoid any disturbances from possible stop-outs of your open positions due to the increased margin requirements, the higher stop-out level at 50% of the minimum required margin and/or the removal of any bonus (credit) balances from your account(s).

We would also like to inform you that our Client Agreement/Terms, Conditions of Business and Risk Disclosure have been amended. If you agree with all these amendments, you do not need to take any action and we will assume that you have accepted them. If you do not agree with these amendments or you have queries related to them, please contact our Customer Support Department at [email protected].

The new restrictive measures imposed by ESMA that apply from 1st August 2018 and affect your trading conditions with XM UK (except measure no. 3) are summarised below:
New margin (leverage) requirements

The following margins (leverage levels) will be required for all trading positions (i.e. for opening new trading positions and maintaining existing trading positions):

CFDs on the following financial instruments New margin rates (leverage levels) from 1st August 2018
Major FX– Currency pairs composed of any two (2) of the following:
USD, EUR, JPY, GBP, CAD and CHF 3.33% (30:1 leverage)
Other FX – All other currency pairs 5% (20:1 leverage)
Gold 5% (20:1 leverage)
Major indices - EU50, FRA40, GER30, JP225, UK100, US100, US30, US500, EU50Cash, AUS200Cash, FRA49Cash, GER30Cash, JP225Cash, UK100Cash, UK100Cash, US100Cash, US30Cash and US500Cash 5% (20:1 leverage)
Minor indices – All other indices - (CHI50, SING, SWI20, USDX, CHI50Cash, GRE20Cash, HK50Cash, IT40Cash, NETH25Cash, POL20Cash, SINGCash, SPAIN35Cash and SWI20Cash) 10% (10:1 leverage)
Commodities (other than gold) 10% (10:1 leverage)
Shares and other reference values 20% (5:1 leverage)
Cryptocurrencies 50% (2:1 leverage)
Margin close-out rule on a per account basis

The margin close-out rule on a per account basis requires that XM UK automatically closes (i.e. initiates the stop-out mechanism for) one or more open positions of retail clients when the minimum total required margin for all these positions in any individual trading account falls below 50% (previously at 20%).

Negative balance protection on a per account basis

ESMA requires that a negative balance protection on a per account basis is offered to retail clients. XM UK has always offered negative balance protection to all its clients.

Prohibition of all trading benefits

In order to comply with prohibition of all trading benefits of ESMA (such as the bonuses and XM points offered by XMUK), please consider the following:
Any remaining bonuses (i.e. credit) in your trading account(s) are permanently removed on 1st August 2018, and any deposit(s) made into your account(s) from 16th July 2018 onwards do not entitle you to any bonus. This means that any remaining bonuses earned in your account(s) until 15th July 2018 were available until 31st July 2018.
Any unredeemed XM points were permanently removed from your trading account(s) on 16th July 2018, and any trading activity from 16th July 2018 onwards does not entitle you to any XM points. This means that any remaining XM points earned in your account(s) were available to redeem until 15th July 2018.

 

[Sonicscooter]

Good morning,

Welcome to a new world. The first thing I saw this morning when I opened my screen was an advert for Plus 500, where they suggested you trade Bitcoin, and then after that promotional sentence, it said: "80% lose".

I imagine these warnings will be ignored by people just like smokers fade out the images on the cigarette packages.

Still, looking at the screen this morning, I have 2 broker platforms side by side. One side has a broker where I have opted for PRO status, and next to it a broker where I haven't gotten around to apply for PRO status.

I bring up the Dow ticket. I input the average stake size for UK clients, which I have been told is around £7.50. To make it easier, I input £10.

Dow margin on PRO platform = £1,250

Dow margin on NON PRO platform = £12,500

So in answer to your question Sonicscooter, there is a good chance that people don't have an extra £11,250 spare capital available to deposit on their trading account.

I have written 3 articles about ESMA on my website www.tradertom.com. I have fought ESMA as a citizen by argument and reason. I supported IG's initiative on REPLYTOESMA.

I argued that Binary should not tarnish everything else, including spread betting and CFD trading. I am glad to see Binary gone, but I doubt you can simply remove an industry. Did the alcohol industry disappear during the Prohibition? No, it just moved across the border. This is in my mind what ESMA has achieved. They have exported the problem elsewhere, but it will still rear its ugly head.

ESMA could have achieved a sensible outcome by demanding a Negative Balance Protection from all brokers, on par with what BAFIN in Germany had done in 2017. It would have achieved a stop to the disaster stories we saw during the "Flash Crash" and the "2015 Swiss National Bank Announcement".

A typical UK spread betting account is about £2500. People will wake up this morning and realize there is not much fun in trading FTSE and having to deposit £380 for every pound staked. They will, if they can, deposit more money on their account, but I don't think this will apply to the majority.

I run a private signal channel on Telegram, where I tell people what I buy and short and when. There are currently 496 members in there. I should just add that I am not charging for it. This is not an advert in disguise.

I ran one of those SurveyMonkey surveys where I asked a question about the new ESMA rules. It was a pretty simple survey, and all I wanted was to get a feel for what people would do when faced with the new ESMA rules.

Question 1: Can you, and if you can, will you apply for Pro Status?


15% replied they could and would.



Question 2: Assuming you can't successfully apply for Pro Status, will you deposit more funds on your account?

37% said they would deposit more funds on their trading accounts.



Question 3: Assuming you can't successfully apply for Pro Status, will you seek an account outside the EU?


74% responded that they would seek an account outside the EU.


If those numbers are correct, and I will be the first to argue that the sample space is small, then what ESMA has done has backfired. ESMA intended to create a safer environment for the private investor. Instead they have thrown retail traders into the hands of foreign CFD providers.

Of course just because a CFD provider is based outside the EU does not make him the big bad wolf. However, when it comes to investor protection, we are privileged in the EU. My articles make an argument for Australia because of the bank protection guarantees as well as an Ombudsman, as opposed to selecting a broker on say Cayman Islands, where I have no protection.

So today is D day. For some it is business as usual, while for others, it is a day of wondering what to do. I have been in the industry since 2001. I dont agree with the CEO of IG Markets, who said that the industry brought this on by itself. We didn't. We got more competitive.

In 2001 the spread in the DAX was 8 points. The spread on the quarterly Dow was 16. You barely had charts, let alone online platforms. We have innovated ourselves into the point where people arriving to the trading industry do not have to worry about charting packages costing 300 dollars a month, because the brokers provide it for free. They don't have to worry about news flow because most brokers provide it for free.

Trading is really not an easy game to crack. You need your A-game every day. It is a job or a serious hobby. All the brokers have done is make it easy for you to implement your game. Would you rather trade DAX at a 1-point spread or a 4-point spread?

I don't work in the industry anymore, and I haven't done since 2009, but I don't see how this was the industry's fault. The advertising standards made sure the adverts were kept in line. The Ombudsman handled complaints. The brokers made sure they kept in line. The odd fine here and there made sure the FCA showed their teeth from time to time. So what happened? Was it too much margin? OK, fine, reduce it to 100 to 1 and keep it there.

ESMA has committed a grave error, and they have not learned from history. We may not have a similar situation apart from Japan's ban on margin a few years ago, but we have from so many other avenues in life. When you create a void, it will be filled by someone.

Tom

Then they shouldn't be trading, and looking at this message from you, you aren't either, or at least not with any success.

 

[tokyojoe]

Then they shouldn't be trading, and looking at this message from you, you aren't either, or at least not with any success.

Careful how you answer Sunseeker, this one has teeth, he knows the craic, unlike 99% of the "traders" on here !

Might have a little look into you myself.

You know, we have quite a few smoke n' mirror merchants.....not saying you are one, but I'll need to do a little research, you being from the old guard n' all.

Gonna make a point of weeding out the flannel from now on, time for a change of format on this forum.

 

[tokyojoe]

Not sure that I understand all what your saying...

I suggested that the new margin rate since ESMA is now 10 X more that what it used to be on SB...and also indicated the to trade Wall St on IG is now costing more than the figure you indicated for the DAX..for a 1 GBP Per Point trade..

Eg: 1257 GBP for Wall Street V what you indiated the Dax to be..approx 600 GBP

... I assume you referred to SB rates with one of the UK companies..



Does it make any difference what time one trades or which Market...

Does the Dow make bigger point ranges than the Dax in general ? some traders suggest that it does...

I dont trade the Dax so I am not familiar with it...

But many people trade the Dow ...its a 24 hr market...which I assume all IG Index Markets are ? if they are on futures... but the markets will move more during the main cash market hrs.

I assume also that you can trade the DAX and FTSE at 24 hrs on futures..

but do those markets move similar to the Dow... or does the Dow move similar as the DAX /FTSE during those main market times... at times they do... at least until the main US markets open..

but do these markets moves the same ammount of points if when say when they may appear to be moving similarly at certain time periods..

As far as I am aware they do not... and the Dow generallly make bigger range moves.. but its downfall can be its more volitile..if it goes agaisnt you..

So the Dax at times maybe a safer market...againt volitile fast moves..

It is often suggested that the USA markets tend to move most of the Market indices more... but main moves or pivots of ranges for a day...also do occur from earlier in the day European hours...or on overnight sessions..

it depends how one trades and what method you may look to use..

some try to find a days high point before entry... some can get in well on a trend.. each to their own if they get results..

Good option traders can make money at lower cost , lower risk is whatI was suggesting...

so they maybe able to turn smaller amounts of money to become reasonable sized accounts that they may later also use with Futures as well..I was just indicating that its possible to still trading indices at lower costs if you can trade options effectively.and I have witnessed someone do it..

Dowsp, I don't have time to get into your reply, don't make me nit pick your words, you'll lose mate.... BUT F@CK YEA it matters what time you "trade" as a retail SB...... do after market at your peril.....!

I'm not going to turn this into the usual my b@lls are bigger than yours, but trust me my friend, day trading the markets is best done within hours, your reply is slightly worrying that you don't know this simple Simon fact !

I'm not sure I'm talking to someone who knows whats what..... so I'll leave it there & ask you again...... are you making a consistent GOOD living from options trading ??

A yes or no, without flannel will suffice mate !