OANDA Supports Proposed FCA Bonus and Leverage Changes

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 Leverage In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders In financial trading, leverage is a loan supplied by a broker, which facilitates a trader in being able to control a relatively large amount of money with a significantly lesser initial investment. Leverage therefore allows traders to make a much greater return on investment compared to trading without any leverage. Traders seek to make a profit from movements in financial markets, such as stocks and currencies.Trading without any leverage would greatly diminish the potential rewards, so traders Read this Term.

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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

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 Risk Management One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, One of the most common terms utilized by brokers, risk management refers to the practice of identifying potential risks in advance. Most commonly, this also involves the analysis of risk and the undertaking of precautionary steps to both mitigate and prevent for such risk.Such efforts are essential for brokers and venues in the finance industry, given the potential for fallout in the face of unforeseen events or crises. Given a more tightly regulated environment across nearly every asset class, Read this Term 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.