ActivTrades Launches Bitcoin, Litecoin and Ethereum CFDs

The company’s risk-management team explained that the broker is sourcing liquidity from leading crypto exchanges.

ActivTrades has just launched a list of new contracts, including Bitcoin, Litecoin, and Ethereum. The company is offering the new crypto CFDs via its proprietary trading platform ActivTrader, MetaTrader 4 and 5 on desktop, tablet and mobile.

The brokerage is not charging any commissions on the contracts and offers 1:5 leverage to its clients. The offering of the three cryptocurrency pairs comes at a time when some other brokers have started suspending their products due to adverse market conditions.

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Commenting on the news, the CEO of ActivTrades, Alex Pusco, said: “Now that leading derivatives marketplaces such as the CME and CBOE have started offering Futures contracts on Bitcoin there is more liquidity in the cryptocurrencies market and we can offer a higher quality product for our traders.”

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“We will also launch webinars about these products to further support our client’s knowledge of the market. There is a high level of interest on cryptocurrencies right now, but as a highly speculative product it is very important to learn how to trade them wisely,” he elaborated.

Risk Management

ActivTrades is confident in addressing the risk-management challenges brokers face when offering cryptocurrencies. Commenting to Finance Magnates on the launch, the Risk Director of the company, Andrea Draghi, said: “We’re sourcing liquidity from a pool of Crypto exchanges, where Bitstamp is the main one. In terms of risk management methodology, the key point is a wise use of the leverage range which is set at 1:5 to ensure enough margin is allocated upfront in the event of potentially strong movements as the cryptocurrencies recently experienced.”

“On top of that, we have in place precise internal hedging limits to avoid risks we’re not comfortable with. When we approach those limits, we may stop taking new positions, but our clients are always able to reduce their exposure, closing their existing positions,” he elaborated.

The risks associated with cryptocurrencies have affected many brokers in the industry with ICMarkets, ThinkMarkets, and XTB all modifying their crypto trading conditions. Draghi elaborated that ActivTrades is not seeing a one-sided market problem.

“Cryptocurrencies are moving in a strong trend, hitting every week new highs and showing some retracements from time to time. Overall, if we look at Bitcoin, for instance, we observe the sentiment of our customers is slightly bullish, but on the other hand, also the short positions are significant, so, the situation is quite balanced,” he added.

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