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Re: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection
Posted: Sun Mar 14, 2021 5:44 am
by YeshuaYoke
it would be the banks doing it inline with asic, but you should have no problem getting wholesale account like I did, as a sophisticated investor rubric
Re: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection
Posted: Thu Mar 25, 2021 6:18 pm
by mlawson71
Guys,
the changes will go live in a few days time, if anyone is trading with Australian brokers, I hope you are prepared for it!
Re: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection
Posted: Thu Mar 25, 2021 6:46 pm
by Ogee
The new 'close out rule' to be introduced by ASIC was the one that caught many out when was introduced by ESMA in the EU and UK back in 2018.
It stipulates when the broker must close you out of a losing trade as your margin is used up (all for your own protection of course - silly you
).
This from one Australian broker;
What is the new ASIC margin close out rule?
Put simply, under the new ASIC rules we will need to include running losses for limited risk positions when looking at the equity calculation. Let's look at a worked example.
Say you have $1200 cash on your account.
You place an Australia 200 trade with a guaranteed stop and it requires a margin of $1000.
If the market moves against you $200's worth you would then start to eat into your equity.
If the market continues to move against you by a further $500 (i.e. 50% of the margin required to open your trade) your position would be closed.
This is because your equity is now only 50% of your margin requirement.
The new ASIC rules require us to close the position.
You would be left with $500 in your account.
Please remember if the market gaps over this level then there is no guarantee to close your trade at this exact 50% level. There is a 'negative balance protection' rule which will be in place from March 27th, however this applies to the account as a whole and only applies to new positions opened after March 27th.
There are a couple of other important things to note
We will not be implementing 24 hour or weekend close out rules for ASIC retail clients. This change will be made on March 27th and will be applied on an account level (both existing and new positions).
If you have a regular trader account, you can still use running profits to cover margin on new positions.
Positions which have guaranteed stops will be margined at the higher value; maximum risk on the trade or the underlying market margin rate.
Re: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection
Posted: Fri Mar 26, 2021 7:53 pm
by mlawson71
It's depressing that the EU did it and then that whole idea spread so wide.
Re: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection
Posted: Mon Apr 05, 2021 2:29 pm
by Kiwi
The new Australian regulations do not apply to every Aussie trader. If your with Pepperstone and have traded over $50,000 with them, all you have to do is pass a online test and you'll get a Pro account and then you can go back to 500:1 leverage or what ever you prefer, It only takes about 24hr to change back over.
Re: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection
Posted: Mon Apr 05, 2021 7:40 pm
by mlawson71
It looks like ASIC
has also banned retail binary options trading as well. The restriction will remain active for 18 months, however, ASIC has the power to make it permanent after the preliminary 18 months.
Re: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection
Posted: Tue Sep 14, 2021 3:19 pm
by Swiss_cheese
Some of my friends in Australia are very annoyed by the new leverage laws. Not really much point in using 1:30 after you've been used to 1:500 for years...
Re: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection
Posted: Sun Sep 19, 2021 5:12 am
by Nbats7979
Nbats7979 wrote: Sun Sep 19, 2021 2:40 am
Seems weird, on a trading forum, trading with a major broker nobody complained about this? It was 130 pips "pricing error" or stop hunt. Now the new regulations are in place they cant get away with it. I'll post my compensation if anyone cares. My point is does anyone actually trade on here? I would have thought there would be a few more complaints unless everyone is on a demo or just likes pretty indicators.
Re: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection
Posted: Sat Sep 25, 2021 2:29 am
by mlawson71
What broker did that?
Re: Australia’s 1:30 leverage: ASIC Announces Leverage Cap, Negative Balance Protection
Posted: Fri Feb 18, 2022 3:22 am
by HeavLeighGill
The 1:30 leverage cap sucks but traders can always switch to an offshore broker if it's that much of an issue.