Changes to CFD leverage

NickBk said:
I for one think the new changes proposed for CFD trading is a great move and a bit late for some but it should keep traders in the game longer and force them to learn more about trading instead of gambling.

http://www.mondovisione.com/media-a...poses-stricter-rules-for-contract-for-differ/
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I completely agree. Leverage at 50:1 is plenty. We have analysis throughout 2016 that shows our clients use leverage for accounts with balances less than $1,000 to be around 30-35:1. Accounts that have $5k to $10k use leverage around 8-10:1.

I think the FCA and CySEC have both acted correctly. Binaries have blurred the lines between what is acceptable and what should not be acceptable and leverage restrictions and bonus bans in my opinion is the perfect way to rein bad behaviour in.
 
NickBk said:
https://uk.finance.yahoo.com/q?s=IGG.L

Someone said IG rarely have a losing day, well the shareholders are being cleaned out. I hope they are leveraged. Currently off 26%
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When I was at IG (many moons ago) there was typically 1-2 losing days across the group each year. that wasn't to say that each individual desk (such as FX or Shares or Options) didn't have losing days more regularly, but across the group they were profitable almost every day.

the shareholders are being cleaned out? i think that's a bit of an overreaction. the vast majority of IG;s clients wont use leverage over 50:1 and once the market is made aware of that by analysis that no doubt will be swiftly published the sentiment may be different. IG do not need clients trading on 100:1 in order to be a successful and profitable company. I don't bet but if i did i'd be buying IG now. November was a good month for all brokers and December has started well.. I'd expect IG Q4 results to be good.
 
I agree it is a super business to own.
You have access to much better client stats than I do too.
Just heard of a lot of punters getting cleaned out on insufficient margin, which is usually at the higher levels of leverage.
I think the 200/1 and even 500/1 others offer on fx is the equivalent to the fobt that pervade the high street in the UK.
In general the change won't make people better traders but it may stop the hapless from throwing away their money.
Those binary only companies should be banned imo.
Cheers
 
I am guessing the drop of £1.1bn of market cap says they make a lot of their money from the massively leveraged punter.
 
NickBk said:
I am guessing the drop of £1.1bn of market cap says they make a lot of their money from the massively leveraged punter.
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either that or this is the latest example of this industry getting very difficult to remain regulated in. IG have lost a third of their value, that to me doesn't make sense. no way is a third of their revenue coming from people that trade using leverage over 50:1

firms that rely on bonuses and promotions to get clients will be the ones i think are in a bit of trouble. if they can't on-board people by their usual methods of deposit bonuses then how are they going to get new clients? IG don't have that problem, they have all the clients anyway !!

we'll take steps in the next few days to limit leverage to our cysec clients to 50:1 but we wont make any decision on our fca clients until the consultation period has closed and the policy statement released sometime in the Spring. I would expect the CySEC changes made now to provide lessons learned for the inevitable fca changes in a few months time.
 
highbury fx said:
either that or this is the latest example of this industry getting very difficult to remain regulated in. IG have lost a third of their value, that to me doesn't make sense. no way is a third of their revenue coming from people that trade using leverage over 50:1

firms that rely on bonuses and promotions to get clients will be the ones i think are in a bit of trouble. if they can't on-board people by their usual methods of deposit bonuses then how are they going to get new clients? IG don't have that problem, they have all the clients anyway !!

we'll take steps in the next few days to limit leverage to our cysec clients to 50:1 but we wont make any decision on our fca clients until the consultation period has closed and the policy statement released sometime in the Spring. I would expect the CySEC changes made now to provide lessons learned for the inevitable fca changes in a few months time.
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fxpro ?
 
tar said:
fxpro ?
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lol, no. it doesn't really matter anyway does it. the moment you know who i work for i'm going to start getting the hairdryer treatment from you all and i'll then run off in to the sunset never to be seen again... its better this way, let me be anonymous and i'll be able to answer without having to put any spin on it.

from my seat this industry is getting difficult but it is still an extremely profitable business to be in if you can get it right. I want less firms to compete with but i want the firms that remain to be strong and have good balance sheets and be in the 250 or main index to provide credibility to the sector. i want the regulator to really focus on the poorly run firms, the firms that don't segregate client funds or pay client withdrawals back quickly or who lie etc etc. If we were left with companies that had the muscle and reputation of IG, CMC, FXCM, SAXO etc and got rid of the companies that made money by ripping people off then this industry will go from strength to strength. I'm 100% for tough reg's and squeezing the weak out.
 
highbury fx said:
lol, no. it doesn't really matter anyway does it. the moment you know who i work for i'm going to start getting the hairdryer treatment from you all and i'll then run off in to the sunset never to be seen again... its better this way, let me be anonymous and i'll be able to answer without having to put any spin on it.
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What are you talking about :LOL: ? I sincerely just wanted to know ...
 
highbury fx said:
lol.. well i aint sayin ;)
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You already answered me , you dont work for fxpro , i have an account with them . Would you mind if we open a new thread to allow members ask you questions about the industry ?
 
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