Concerning New ESMA Regulation On Leveraged Trading
I have just seen this recent news about ESMA passing a regulation on maximum leverage for brokers in Europe. Although I am not trading in Europe there is a particular message about this move I wanted to share with those who care here.
If you are interested in any way on protecting the interests of individual investors whether you are a lawyer or either living in EU, to me, what seems of a huge concern is that they are taking away what was an advantage to the individual trader in the world in relation to US traders. In the US they have to trade instruments like options to get a leveraged return because they have CFD derivatives banned from being offered by their brokers. The regulators banned CFDs with a narrative of "protecting retail investors".
However what is not being realized is that you are being helped with higher leveraged accounts. You can withdraw a higher percentage of your account and still keep your trading program just the way it was. You don't have to trust your broker with all your money because the best ones allow you to trade with the least amount of collateral as possible by giving you a higher leverage.
For the individual investors it is about the opportunity that it is to have a bigger leverage and follow a trading program. It is not about letting regulators have a word bigger than your own sense of taking responsability.
Appreciated if you could talk with your fellows about this concern in EU.
Thats very confusing, no one talks, but it's big. There will be changes in EU, maybe it's too early to say what exactly, coz even brokers don't know for sure all bits of this new regulation. What they suggest now is - professional account - "little bit changed optimal execution price, regards of this - priority will be given not to the overall price but to other variables" . Now these little bit, and other variables is more than enough to stop trading for good, i believe HFT companies have good lobbyist up there.
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