OANDA, one of the oldest brokers in the industry, has issued a statement outlining support for the proposed changes by the UK Financial Conduct Authority to bonus promotions and leverage.
To unlock the Asian market, register now to the iFX EXPO in Hong Kong.
The company itself has outlined that 75 percent of trading done via its European subsidiary based in London, OANDA Europe, has been transacted by clients that use 1:50 or lower leverage.
Serious professionals seldom trade at those levels of risk
Kohle Capital Strengthening Retail OfferingGo to article >>
The company has long been operating with a leverage restriction at 1:50, when new traders have always been defaulted to 1:20. The company has added 1:100 leverage only in response to increasing client demand in 2015.
At the time the company outlined that while some brokers may offer 100:1 leverage, or even 200:1, OANDA believes those levels are far too risky and could cause clients to lose all of their funds very quickly.
“Serious professionals seldom trade at those levels of risk”, a statement on the company’s website reads.
In a statement issued on the FCA’s action yesterday, the company outlined: “OANDA believes that client risk management and education is of primary importance, and advises against trading with brokers who offer excessive bonuses and high levels of leverage.”
“The company believes the FCA announcement further validates its established leverage rules, under which clients in Europe receive a default setting of 50:1, with a maximum of 100:1,” the company elaborated.