FinMarket Review

Finmarket.com briefly

FinMarket is a trade name of the company K-DNA Financial Services Ltd, which provides online trading services for retail investors. The firm claims it offers deep liquidity and a fully transparent trading model. FinMarket defines itself as an industry leader providing real-time market prices with narrow spreads directly from the interbank market. K-DNA is licensed and regulated by the Cyprus Securities and Exchange Commission (CySEC). Customers can trade currency pairs, commodities, indices, shares and cryptocurrencies, through the popular terminal MetaTrader 4 (MT4). The minimum initial deposit is USD250.

Regulation

The first step to a successful, profitable trading experience is trading with a licensed, registered, and regulated broker, the company says. FinMarket is owned by K-DNA Financial Services LTD, which is authorized and regulated by the Cyprus Securities and Exchange Commission (CySEC) under license number 273/15. All client’s funds are held in segregated accounts. This means the funds you have deposited to your trading account are maintained in total and complete separation from the brokerage’s operating and trading costs. Deposits of the customers are insured up to EUR20,000 by the Investor Compensation Fund (ICF). FinMarket operates on the European market in accordance with the Markets in Financial Instruments Directive (MiFID) and is approved for the acceptance, transmission, and execution of orders.

Account Types

There are five types of live trading accounts available, which differ mainly in the required initial amount of the deposit and the offered spreads.

Silver Member account – The minimum required amount is USD250 and the spread for the EUR/USD pair starts from 4 pips.

Gold Member account – The minimum required initial amount is USD5,000 and the spread for the EUR/USD pair starts from 3.4 pips. The commission discount can be up to 15%.

Platinum Member account – You must invest at least USD20,000 and the minimum spread for the EUR/USD pair will be 1.1 pips. The commission discount can be up to 65%.

Diamond Member account – The minimum required deposit amount is USD50,000 and the minimum spread for the EUR/USD pair will be 0.9 pips. The commission discount can be up to 75%.

Elite Member account – You must invest at least USD250,000 and the spread for the EUR/USD pair will start at 0.8 pips. The commission discount can be up to 85%.

Hedging and scalping strategies are allowed in all types of accounts. Trading some asset groups is charged a commission.

What Type of Brokerage the Company is?

We have found in the Order Execution Policy document that all transactions on contracts will be executed by FinMarket as an agent on the client’s behalf. The counterparty (principal) to every trade will be one of the company’s execution venues. So, FinMarkets transmits every client order (arranges for its execution) with the third-party liquidity providers (execution venues). This means that the company uses the Straight Through Processing (STP) model to execute client’s orders; Therefore, there is no conflict of interest, and the company earns money only from the spread and commissions.

There is a text that warns of slippage when trading CFDs. This is the situation when at the time that an order is presented for execution, the specific price shown to the client may not be available; therefore the order will be executed close to or a number of pips away from the requested price. Slippage is the difference between the expected price of an order, and the price the order is executed at. In other words, the client orders may not be executed at declared prices. It is noted that slippage can occur also during stop loss, take profit and other types of orders. The company does not guarantee the execution of your pending orders at the price specified. It confirms that your order will be executed at the next best available market price from the price. Slippage may appear in all types of client accounts. This means that the stop loss orders are not guaranteed.

The same document reveals that when the company executes an order on behalf of a retail client it is obligated to provide protection for negative balances (Negative Balance Protection – NBP). Negative balances can occur in volatile markets where the price of a traded asset deteriorates rapidly and the technology in place fails to prevent the client’s account from becoming negative (going into debt). Given the NBP, the maximum potential losses that a retail investor can have are limited to the funds in the retail client CFD trading account with the company. NBP means that the company is obligated to compensate retail clients in cases where their account balance becomes negative. All risk from the occurrence of a negative balance and its compensation are covered by the execution venues. Currently, Up Trend Ltd is the execution venue in respect to each class of financial instruments.

Fees

In addition to usual fees there also is an inactivity fee. If the client account is inactive for seven months or more (no trading, no open positions, no deposits, or withdrawals), the company will charge a monthly maintenance fee. The fee will be EUR 30 during the first year of inactivity; EUR 40 in the second year of inactivity; EUR 50 for each subsequent year.

Deposits and Withdrawals

Customers can use several deposit methods such as wire transfer, credit/debit cards (instant payment), giropay, Skrill and Neteller. The company does not accept any cash deposits.

Withdrawals should be made using the same method used by the customer to fund his trading account. Credit card withdrawals are only available for the initial deposit amount. If the withdrawal is made by bank transfer, the company will charge the customer the applicable bank transfer fee. The company will charge a withdrawal fee of EUR35 for all payment methods.

Trading Platforms

You can trade via one of the most operated terminals worldwide – MetaTrader 4 (MT4). MetaTrader 4 is the most popular charting and analysis software in use by traders of all levels. MT4 has all the charting and analysis capability that any trader needs combined with fast order execution directly from the chart. All the popular indicators and charting tools are preloaded into the platform and you can load custom designed indicators or Expert Advisors (EAs) that allow you to automate your trading strategies. MetaTrader platform is available as a desktop version. In addition, the company offers its own web-based terminal named WebTrader. Customers can execute orders with just one click or view and subscribe for copying other traders’ deals. In addition, a powerful visual trading tool is available. It gives a visual representation of market conditions and major trends for currency pairs.

Assets

Forex – You can trade 46 major, minor, and exotic currency pairs. The minimum spread for the EUR/USD pair depends on the account type and can be within 0.8-4.0 pips. There is a commission of USD5 per lot traded.

Indices – 21 CFDs on global indices are available for trading, such as FTSE 100, DAX30, DJIA and ASX200. The minimum spread for the DAX30 is between 1.9 and 1.75 points. There is a commission of USD8 per lot traded.

Commodities – 17 commodities are available for trading, including Gold, Silver, Crude Oil, Brent Oil. The average spread for the Gold is USD0.48. You will be charged a USD8 commission per lot traded.

Shares – You can trade above 150 CFDs of US, Canadian, German, French, British, Spanish, and Scandinavian shares. The average for the Apple Inc. shares is USD1.04. Trading is commission free.

Cryptocurrencies – 10 of the most traded cryptocurrencies are available for trading. They are quoted against USD, GBP, and EUR. The average spread for Bitcoin is USD175.5.

Tools

There is a section called Tools, containing daily news, economic calendar, and webinars. The information in most of the subsections is outdated and some of them are broken.

Summary

FinMarket has a CySEC regulation, which allows it to provide financial services throughout the European Union. It uses the STP model to execute orders transmitting them to its liquidity providers. The company provides a wide range of trading instruments via the popular MT4 and its own platforms. There are five types of live accounts that differ mainly in spreads and initial deposit. If you want to trade in conditions with narrow spreads, you must invest at least USD20,000.