With the entry into force of MiFID II, retail investors have seen their trading conditions changed, starting with the total extinction of binary options since 2 July 2018, which has forced all brokerages regulated at European level to eliminate this Product for retail customers, being available only to institutional clients. Another of the measures imposed by the European regulator in order to protect the investors, went through the change of the leverages offered to customers in CFD’s negotiation.
On 1 August 2018 all brokerages under the supervision of the ESMA (European Financial Markets Supervisory authority) were obliged to amend and standardize the trading conditions of CFD’s for all their customers, so that these They would be more protected by having smaller positions and with less exposure to risk.
What has changed with the entry into force of the new rules?
- Main Exchange Pairs-30:1
- Remaining currency pairs, gold and main indices – 20:1
- Raw materials (other than gold) and other indexes – 10:1
- CFD’s shares – 5:1
- Criptomoedas – 2:1
New leverages require investors to need a higher margin
To open the same positions, let’s look at the example of EURUSD. In XTB, investors needed a margin of just 1,000 euros to open a lot, starting in August they needed 3,333 euros to open the same position. This margin increase required to open the same position causes market movements to have less impact on the investment made.
However, in XTB it is possible for customers to keep the previous leverages
(5:1 in the case of Criptomoedas), obtaining a professional status, registering via the link: https://pt.xtb.com/pro-trader-lp-1. The approval process as a professional customer takes, on average, about 1 week if the customer complies with the requirements and has the documents available.
- Required minimum margin: As of August 1, investors began to have a new minimum margin required to withstand their positions, thus passing from 30% to 50%, which, on the one hand, gives less margin to withstand possible losing positions, but by Another, it allows customers to lose less in percentage terms of the amount invested.
Negative balance protection: the fact that you do not have a credit balance for theBrokerage is no longer a novelty for XTB, since it was a pioneer brokerageIn this field by not allowing customers to lose more than the amount theyhad in the account. The novelty? Is that even with professional status, in XTB theCustomers will not be able to have a negative balance, contrary to what happens in manyOther brokerage firms who take advantage of the fact that it is not a requirement of ESMA toProfessional accounts and customers are unaware of this.
With regard to the negotiating committees, the despite the increase of required margin to open new positions, the XTB will keep the negotiating committees practiced previously which will greatly benefit the customers. Let’s take the example:
By opening a position of 0.01 lots in EURUSD, XTB customers need a margin of 33.30 euros with a commission of 0.07 euros, which corresponds to 0.21% of the margin value.
Before August, for 0.01 lots of EURUSD were needed 5 euro margin
With a commission of 0.07 euros, which corresponded to 1.21% of the margin. That is, customers went from a commission of 1.21% to 0.21% with the entry into force of the new rules. In order to clarify all customer doubts, establish new negotiation strategies and risk coverage, XTB will develop two special webinars so that they can successfully negotiate with the new leverages
(Insert Link: https://pt.xtb.com/esma-webinars-af present in Marketing tools):
- September 5 – 10PM (intended for customers and non-XTB customers) – Framing of the new rules and strategies.
- September 12 – 10PM (intended only for XTB customers) – risk negotiation and diversification strategies.
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