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50:1 or 500:1? Print
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Wednesday, 21 December 2016 10:09

HomeThe FCA is at long last catching up with US regulators and proposing changes to what has become the wild west amongst questionable spread betting, CFD and Binary providers.

The main area of concern for the FCA is to save private punters from themselves and the temptions of "Get rich quick" marketing promotions that are just great at getting the brokers rich quick! Why? Because the majority of spread betting and binary punters lose money. Punters losses can result in bumper 'broker' profits as most of these providers are not brokers at all, they take the other side of your trade. 

The FCA have now proposed:

 Limit leverage to 25:1 for punters with less than 12 months experience. and 50:1 above 12 months.

Ban 'Free' cash Bonus Promotions 'enticements to trade' and publish agregate customer profit and loss.

So will this help reduce punters losses? It's a no brainer. Take a look at the collapse in share prices of IG group and CMC Markets when the FCA probe was announced. The market expects the providers super profits to fizzle away once this comes into force.

The FCA have started the consultation phase to which anyone can contribute here: https://www.fca.org.uk/cp16-40-response-form

 

 

 

From the blog

Buy the rumour, sell the fact

Has it all been over cooked? The Trump US$ rally seems to have kicked off on the basis that his policies will be inflationary and so interest rates will have to rise. Added to this, the Fed has been telling us all year there will be at least a modest rate increase. Next Wednesday 14th is the last opportunity the Fed and Janet Yellen have to do the deed, consequently the market is convinced it's a done deal and priced it in with the Trump rally.

But the TMEST swing chart is suggesting the dollar rally could be rolling over. So we had best trade what we see and not what we think, or have been told to think!

Markets have a habit of rising on rumours of good news and then promptly reversing when it's actually announced, as further expectations of good news slip away. Perhaps the market is coming to the idea that the US economy, talked up over the last year is just that, talk.

If Trump is to boost the economy it's not going to happen instantly. Any delays, and if the US economy actually turns out to be weak at the start of 2017, could result in what usually happens in the year following a two term presidency. Recession.

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