Admiral Markets has reinstated trading on its cryptocurrency CFDs on both the Admiral.Markets and Metatrader 5 trading platforms. The company currently offers traders the ability to trade Bitcoin and Ethereum with leverage of up to 5:1, and up to 2:1 on Ripple, Litecoin and Bitcoin Cash.
The company initially launched cryptocurrency CFDs in July of last year, as brokerages attempted to incorporate Bitcoin and other virtual currencies into their asset lists. Prior to the changes, clients were able to apply a maximum leverage of 10:1 on Bitcoin, creating challenges in risk management, as Bitcoin enjoyed a strong bullish pattern for an extended period of time.
Pros and Cons of Being a BrokerGo to article >>
However, Admiral Markets has re-enabled the possibility to short crypto CFDs, allowing for a balanced trading environment, and a more practical solution for managing exposure levels. This feature was likely well received, as the past week has seen cryptocurrencies depreciate substantially across the board, amid fears of increased regulatory crackdowns from global governments.
With regard to spreads, the company has applied a spread that is the equivalent of 1% of the value of the underlying crypto assets, thus accommodating for price fluctuations as a percentage of value, rather than a fixed dollar amount. In order to restrict high exposure levels to such volatile instruments, the brokerage has restricted the maximum exposure per trading account to 5,000 EUR. Moreover, short positions are counted as part of the exposure, and are not netted from the total exposure amount.
Cryptocurrency CFDs traders at Admiral Markets should note that contracts will expire each week on Friday, and will not be rolled over to the weekend. This change will prevent potential gaps that can be incurred by clients to reflect price changes while Admiral Markets trading is closed outside of trading hours. The changes applied by Admiral Markets address some of the underlying issues that have made it challenging for CFD brokerages to provide access to cryptocurrency trading.