The European Financial Supervisory Authority “ESMA” plans to introduce a maximum leverage of 30 for CFD and Forex trading. There may be different shades depending on the market and volatility, but this idea of a leverage with a maximum of 30 may be in the first place, and so far many brokers have been giving their clients drastically higher leverage, especially in forex trading and CFD trading with indices, which allows them to achieve significantly faster gains or even total losses.
The citizen’s freedom to spend his money the way he wants? Or state enforced protection against too great risks? What’s more important? What do you like better? We have a clear opinion on this, and we focus on the idea of freedom. As long as every investor is aware of the risk, he should not be restricted in his freedom!
The broker IG Markets has set up its own survey portal for investors in order to gather the opinions of broad investor groups on this upcoming restriction (guardianship of investors). And there you see: Investors don´t want to be “protected” by the EU authorities against extremely high loss risks. 98% of the survey participants say NO to ESMA ideas, according to the survey publication of the company “Investment Trends”, which collected this data on behalf of IG.
108,905 views had this survey website throughout Europe.
There were 14,605 comments from investors.
2500 apparently usable responses from investors were used for the survey results.
98% rejection is a disgrace to EU supervisors. Actually, the poor, confused, helpless investor should be grateful for this state-ordered protection? But obviously the traders active in CFD trading know only too well about the risks, and are deliberately looking for these high levers in order to win a corresponding amount of money! 96% of investors don´t see any concrete improvement in the personal protection of their funds in the impending restriction of leverage.
The following chart shows that there are some small details that investors want to be optimized for their CFD trading, such as guaranteed stops. But the maximum leverage of 30 is not a part of this wishes.
And now we come to a point which we already have spoken about in December. What if this leverage restriction comes into effect? Many investors could resort to little or no regulated brokers outside the EU. This would really increase their risk in terms of deposit insurance, for example! This current study shows that a very large proportion of investors would think about opening an account with a broker outside the EU, when there´s a maximum of 30 leverage in CFD trading in the EU.