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Traders look for brokers with better leverage

Leverage, Leverage, wherefore art thou Leverage?

Like Juliet searching for her Romeo, traders are on the hunt again.

On March 29th 2021, Australia will reduce the leverage rates offered to retail clients to match that which the European Securities and Markets Authority (ESMA) imposed exactly 32 months ago to the day, back in 2018.  Traders flocked from the UK and Europe, across half the globe to open accounts with Australian brokers and now find themselves in the same boat of searching for a broker that still offers higher degrees of leverage without these tightening restrictions, and there are fewer and fewer options for them.

A large proportion of traders do not meet the requirements to be deemed as professionals and therefore aren’t privy to the extended leverage options professionals are afforded, so where should they go next?

It is likely that many clients will continue to search for brokers offering 200:1 leverage but with these options being greatly reduced there should be some key criteria that retail clients should consider when choosing their next broker:

  1. How long have they been trading for?
  2. Where are they based?
  3. Who are they regulated by?
  4. Do they have independent client reviews?
  5. Do they offer negative balance protection?

How long have they been trading for?

Do they have a long-standing history of servicing clients, receiving and sending client funds, and managing the day-to-day responsibilities that inherently come with being a reputable broker?  Or have they just started up in a new jurisdiction to try and cater for this migratory business?

Where are they based?

Is the country they do business in a recognized region for financial services? Is there recourse in that region should the worst happen?  Do they have client service which covers the market hours you wish to trade and do they speak your language? As trading is not always a straightforward business and timely, clear communication is key when your broker’s assistance is needed.

Who are they regulated by?

Are they licensed by a reputable regulator and how do you know who is reputable?  There isn’t a list of who is good or bad but doing your homework to feel more comfortable is worthwhile. This can be paired with the real-life user experiences from the following point…

Do they have independent client reviews?

There is a great deal of “pay for” review sites whose reviews could be misleading as they are paid for by the very broker the review is about.  To avoid these biased websites, it is best to find independently verified review sites such as Trustpilot (there are a few others as well) and check out what the clients really have to say.  Don’t just read the 5-star reviews but filter on the one and two-star reviews to see how bad it can get.  Everyone may have angry clients for one reason, or another, so check to see if the company bothers to reply to their reviews and most importantly, the manner in which they reply. This can tell you a lot about how the company treats and values its customers. 

Do they offer negative balance protection?

Clients are at risk of losing more money than they have deposited if this is not offered and with market volatility as it has been over the last year or two, this is an important feature.

There are other points such as ensuring they offer the trading platforms and instruments that you require along with requesting sufficient detail from you which you would come to expect when opening any financially related account.

So now you are armed with the information to find yourself a broker offering you as much protection as possible while still giving you the benefits you are accustomed to, there aren’t that many of us.


Tradeview Ltd. is not a portfolio manager or an investment advisor. This Market Report is for informational purposes only. Any statements made or opinions voiced in this Market Report do not constitute investment advice. The Tradeview Ltd. Market Report does not constitute a solicitation to buy or sell in the financial markets. Although the information contained in the Market Report comes from trusted sources, Tradeview Ltd. is not responsible for guaranteeing the accuracy, timeliness, completeness, or fitness of such sources. Tradeview Ltd. shall not be responsible for and disclaims all liability for any losses which may be suffered from access and use of the contents of the Tradeview Ltd. Market Report. Trading any financial instrument on margin, using leverage or otherwise involves considerable risk. Therefore, before deciding to participate in any style of trading, you should carefully consider your investment objectives, level of experience and risk appetite. Most importantly, do not invest money you cannot afford to lose. Consulting with your investment counselor, attorney, accountant or other professional upon whom you rely for guidance as to the appropriateness of an investment in any style of trading is recommended.

Tradeview Ltd.

Is licensed to carry on securities investment business and is regulated by the Cayman Islands Monetary Authority (CIMA) as a full securities broker-dealer. Tradeview conducts business pursuant to the Cayman Islands Securities Investment Business Law (SIBL) and its activities fall under the direct supervision of the Investments and Securities Division of CIMA.
Headquarters: 5th Floor Anderson Square, 64 Shedden Road, Georgetown, Grand Cayman, Cayman Islands KY1-1002, BWI.

Tradeview Asia Ltd.

Is licensed and regulated by the Labuan Financial Services Authority (FSA) as a Money Broker, registration number LL15870 licensed to facilitate transactions in foreign exchange pursuant to Labuan Financial Services and Securities Act 2010, the Labuan Companies Act 1990 and the Labuan Business Activity Tax Act 1990.
Headquarters: International Business Financial Centre at Office 5, Jamie Business Center I, Unit F10, First Floor, Paragon Labuan, Jalan Mustapha, 87000 Labuan F.T.

Tradeview Europe Ltd.

Is licensed as a Category 2 Investment Service Company and is regulated by the Malta Financial Services Authority (MFSA). The Malta Financial Services Authority (MFSA) is the single regulator for financial services in Malta. MFSA is a fully autonomous public institution and reports to Parliament on an annual basis. The MFSA is a member of the European Banking Authority (EBA), the European Securities and Markets Authority (ESMA) and the International Organization of Securities Commissions (IOSCO) and is a signatory of the Multilateral Memorandum of Understanding with other European regulatory Institutions. Tradeview is authorized to provide financial services across multiple asset classes and is passported in the EU/EEA under MiFID II (EU Markets in Financial Instruments Directive).
Headquarters: 157 Archbishops Street, Valletta VLT Malta 1440.

Tradeview Financial Markets S.A.C Global

Is authorized to conduct business pursuant to and in compliance with the General Law of Companies (LGS) promulgated by the government of Peru. Tradeview Financial Markets S.A.C is registered with the National Superintendence of Public Registries (SUNARP), company number 13089531. Tradeview Financial Markets S.A.C provides financial services in selected OTC derivative markets in compliance with all applicable government regulations.
Headquarters: Los Mirtos 239 Urb. San Eugenio, Lince, Lima, Perú.