London-based broker Valutrades is working on launching its own cryptocurrency CFDs, according to a LinkedIn post published by its CEO, Graeme Watkins.
Valutrades is an ECN broker offering forex, CFDs, and commodities trading through the MT4 platform.
The announcement follows similar ones from a plethora of brokers. Since the launch of Bitcoin futures trading on the CBOE and CME Group exchanges in the US, foreign exchange companies have been eager to cash in on the popular asset. Other brokers that have recently begun to offer such contracts include ThinkMarkets, Libertex, ICM Capital, ADS Securities, and easyMarkets.
The current popularity of cryptocurrencies means that this is a lucrative area for companies to operate in, but at the same time the volatility of cryptocurrency prices means that it can be a dangerous one too. Specifically, ever-rising prices mean that brokers may not be able to profit. This has led many to offer the products with extra safeguards – Plus500 charges a 175 percent interest rate to hold crypto CFDs overnight, and IG Group will stop taking orders when it is exposed to too much risk.
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Some brokers now pay much less for leads who are only interested in cryptocurrency trading, and others have actually begun to close down their cryptocurrency CFD offers entirely.
Responding to a request for comment, Watkins said: “We went live just now with BTC/USD, ETH/USD, and LTC/USD, plus the crosses ETH/BTC and LTC/BTC. We are indeed looking at Ripple too at this time and if the launch goes fine we will roll these out over the coming week.
It’s true that volatility and new products bring risks and that’s one reason we are only launching now when others did some time ago. Our trading limits are in line with the market but we do not anticipate any issues like limiting our exposure because we are confident in our underlying liquidity solutions.”
Valutrades is registered by the FCA. We most recently wrote about the firm when it partnered with Hummingbird to offer trading via mobile phone.
Watkins held a seminar at the 2017 Finance Magnates London Summit on the subject of trader activity and ROI.