Can You Become a Pro Trader?
The European Securities and Markets Authority (ESMA) has recently imposed new limitations on CFD trading. As UFX strictly adheres to ESMA and CySec regulations, trading on our platform is done according to these new conditions. If you are a veteran trader who wishes to keep trading under the previous conditions, or if you wish to start trading at our platform under the same conditions, you can apply for a professional account. Note that trading with a professional account also carries potential risk, as explained below.
What does a professional account offer in light of the new limitations?
The major update is the limitation on leverage rates. ESMA has set leverage limits that, while lowering potential losses, also limit potential profits.
The following table highlights major differences between the leverage rates available to regular (“Retail”) accounts and those available to Professional Traders:
|Asset||RETAIL ACCOUNT LEVERAGE||PROFESSIONAL ACCOUNT LEVERAGE|
|Major Currency Pairs||1:30||Up to 1:400|
|Oil||1:10||Up to 1:400|
|Gold||1:20||Up to 1:400|
Let’s take a closer look at the currency pairs example:
With a retail account and a $1,000 balance, you can open a 25,000 EUR/USD position and earn $2.5 for each pip. A 10 pips movement on the EUR/USD will result in a profit or loss of $25.
On the other hand, with a Professional account and a $1,000 balance, you can open a 340,000 EUR/USD position and earn $34 for each pip. A 10 pips movement on the EUR/USD will result in a profit or loss of $340. With higher leverages, a professional account provides you with greater potential profits, but also with greater potential losses.
What other benefits do I get from switching to a professional account?
A UFX Professional account provides you with access to the MetaTrader 4 platform, with which you can take your trading to the next level. It also provides you with highly advanced market analysis tools and automated trading features in addition to VIP support services.
What are the risks of switching to a professional account?
A professional account does not offer the following protections:
- General measures: Financial regulators may issue legislations and rules which protect only retail clients. If you choose to be a professional client we will not be obliged to follow those measures in relation to your account hence those protections (and any future measures) would not apply to you.
- New ESMA intervention measures (decision (EU) 2018/796 of 22 May 2018) do not apply to professional clients.
- Investor Compensation Fund Rights: As a professional client you will not be eligible for Investor Compensation Fund (ICF).
Do I need to meet any requirements in order to become a professional trader?
You must meet two of the three criteria below, in order to be eligible to re-categorization to a professional Client.
- You have carried out transactions at an average frequency of 10 per quarter over the previous four quarters on CFDs or forex in significant size (with UFX or other providers).
- You hold an investment portfolio, defined as including cash, deposits and financial instruments exceeding €500,000.
- You work or have worked for at least one year in the financial sector in a professional position, which requires knowledge of the transactions or services envisaged.
So, how do I switch to a Professional account?
First, we need to check your eligibility to trade with a Professional account. Please click on the button below to start the application process.
Elective Professional Account Eligibility Test Q&A
The first step in qualifying for a Professional Account is demonstrating trading knowledge. Please answer the following questions: