WHO IS FINOTEC?
According to research in South Africa Finotec is a British company founded in 2007, with headquarters in London, UK.
Finotec, is a division of a real-time Internet trading company Finotec Trading Inc. which established the world of online Forex trading in 1998. Initially it began by managing a Risk Book brokerage business and accumulating an understanding of all aspects of the FxSpot leveraged business.
In 2001, the company introduced its Forex online trading platform and made it globally available. It now offers real-time Internet trading not only in currencies, but also in options, commodities, CFD’s, and stocks.
Finotec sees itself as a Boutique FX Prime Brokerage and makes provision for investment managers, Hedge Funds and professional traders as well as to retail brokers.
The company enable their clients to trade with multiple brokers, market makers and banks, providing a credit line, based on their margin account, to the clients with whom they have a relationship.
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SAFE OR SCAM
Finotec is authorized and regulated by the Financial Conduct Authority (FCA Register Number 470392). It can hold client funds, act as a match principal and holds an FCA Investment Management license with European passport for many years.
PRO AND CONS
|1. MT4 platform||1. No US traders|
|2. FCA regulated||2. Lack of educational and research tools.
3. Only two account types
Leverage enables a trader to get a much larger exposure to the market the person is trading than the amount deposited to open the trade. Leveraged products, such as forex trading, magnify a trader’s potential profit – but also increase the potential loss.
Leverage is expressed as a ratio, for instance 50:1, 100:1, or 500:1. Assuming that you have $1 000 in your trading account and you trade ticket sizes of 500,000 USD/JPY, your leverage will equate 500:1.
Margin is the collateral to cover any credit risks that may arise during trading operations. It is expressed as the percentage of position size (e.g. 5% or 1%), and you need to have enough funds in your trading account to ensure sufficient margin.
For example, on a 1% margin a position of $1,000,000 will require a deposit of $10,000. The margin level in a trading account needs to be equal or more than 100% to be able to open new trades, otherwise your trading account will be fully hedged.
Since Finotec falls under the regulations of the FCA the maximum leverage it can offer is 1:40.
It does not state what the maximum leverage is for traders outside Europe but looking at various sources on the web it could be around 1:200.
Finotec offers the following types of accounts:
- Standard Individual Account
- Partner/Corporate Account
- Demo account.
Not much detail is given about any of these accounts on the website.
The most popular market instruments available from most brokers for trading include:
Forex trading describes the currency exchange market which refers to the global, decentralised marketplace where individuals, companies and financial institutions exchange currencies for one another at floating rates.
Commodity markets offer many investment opportunities for traders. Soft commodities have been traded for centuries and plays a major role in portfolio diversification and risk management. Investing in contract-based tradable goods is a reliable way to mitigate risk during times of economic uncertainty.
Equity, or stock indices, are actual stock market indexes which measure the value of a specific section of a stock market. They can represent a specific stock market or a specific set of the largest companies of a nation.
The trading of gold and other precious metals, along with crude oil, copper or petroleum, are hard commodities that play a major role in the commodities market and are contract-based tradable goods.
The typical feature of energy prices is high volatility due to the influence of political and environmental factors, supply and demand, extreme weather conditions and global economic growth.
Finotec offers the following market instruments:
Cost and fees depend on different factors, like spread and margins, and Finotec clients may also experience different fee structures according to their country or place of residence.
Margin is the amount of money required in your account in order to open a position. Margin is calculated based on the current price of the base currency against USD, the size (volume) of the position and the leverage applied to your trading account.
The minimum trade size with Finotec is 0.1 lots, which is equal to 10,000 base currency using due to a lot being 100,000 base currency units. It is not clear what the maximum trade size is or how many trades you can have at any one time.
If you do not have an open account, it is not possible to determine what the commissions are on each account type.
There will also be swap charges which are charged when holding trades overnight. These can only be viewed within the trading platform that you are using and can be positive or negative. Spread start from 0.0 pips.
DEPOSIT AND WITHDRAWAL
Accounts usually requires a certain minimum initial deposit, which can be paid in several ways. Withdrawals can usually be done with the same ways, but sometimes differ.
In the case of Finotec, the following methods and minimum deposits are required:
- Minimum deposit for Standard accounts is $200
- Minimum deposit for Corporate accounts is $10 000.
The following methods can be used to fund accounts and to execute withdrawals:
- Credit/debit cards
- Wire Transfer
Currencies available to open an account is EUR, GBP, JPY, and USD.
The forex trading platform provided by Finotec to its clients is the software to carry out their trades. Some brokers provide only one, others quite a few platforms.
A multi-asset trading platform is one that allows clients to trade forex as well as other asset classes. The decision about which platform to choose will usually depend on what a client would like to trade.
Finotec provide four trading platforms. They are:
- Web XTrader
- Fix API
The platforms are available in Arabic, Chinese, English, French, German, Greek, Hebrew, Italian, Polish, Portuguese, Romanian, Russian, Spanish, Turkish and Vietnamese.
HOW TO OPEN AN ACCOUNT
Similarly to a bank, to register a forex trading account with Finotec for the first time, you will be required to go through a basic “know your customer” process, which will allow Finotec to ascertain that your submitted details and ensure the safety of your funds and account details.
On the website go to the link to open an account and fill in the form to get you started.
Potential traders need to make sure the broker company they chose will offer sufficient support whenever they need it.
In the case of Finotec customers can reach the support team in London in real time by phone, chat, e-mail or request form.
Customer service are available in Arabic, Chinese, English, French, German, Greek, Hebrew, Italian, Polish, Portuguese, Romanian, Russian, Spanish, Turkish and Vietnamese.
Before starting to trade, potential clients of Finotec should avail themselves of all possible information and trading skills needed to be successful in the world of forex and commodity trading.
There is no clear indication on the Finotec website whether it offers any educational tools for beginner traders.
According to other reviews the company has developed a series of educational seminars, offering professional traders and emerging fund managers expert tools and knowledge to either set up a fund or expand their current business.
To be able to trade with confidence, traders should do as much as possible research about this kind of speculative trading before commencing, but also preceding every daring deal to ensure that they don’t lose money unnecessarily and trade as profitable as possible.
It is not clear on Finotec’s website whether it offers any research material to assist traders in the financial world of trading.
Being an awarded company instils extra confidence by traders. Unfortunately, there is no indication on the web or Finotec’s website whether it has received any awards since its inception.
Finotec is not an LP or an ECN broker. They are a boutique FX prime broker that connects their clients with top tier liquidity, giving them constantly competitive pricing.
Finotec is a good choice for investment managers, Hedge Funds and professional traders as well as to retail brokers.
Finotec has been providing its clients with optimal trading conditions for their FX activities and have held fast to their founding principles of acting in their clients’ best interests.
Being authorized by FCA it has sustained a business model that is consistently fair and transparent.
Unfortunately, Finotec’s website is not easy to use and does not give enough information. Traders will have to rely on reviews given by traders on various sites that have used Finotec.
The website finotec.com is owned and operated by Finotec Trading UK Ltd., which is authorized and regulated by the Financial Conduct Authority (Financial Services Register Number 470392).
Trading in Foreign Exchange and other leveraged products carries a high degree of risk to your capital and it is possible to lose more than your initial investment. You should only speculate with money that you can afford to lose.
These products may not be suitable for all investors, therefore please ensure that you fully understand the risks involved and seek independent advice if necessary, according to research in South Africa.
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FINOTEC AT A GLANCE
|Countries not accepted for trade||US|
|Islamic Account (Swap Free)||No|
|Minimum Deposit||Standard accounts – $200
Corporate accounts – $10 000
|Deposit Options||Wire Transfer, credit/debit cards, PayPal, WebMoney|
|Withdrawal Options||Wire Transfer, credit/debit cards, PayPal, WebMoney|
|Platform Types||MT4, Web XTrader, Fix API, Currenex|
|OS Compatibility||Web, PC, smartphones, tablets|
|Tradable Assets||Currencies, Options, Stocks, CDFs, Commodities|
|Languages supported on Website||English|
|Customer Support Languages||Arabic, Chinese, English, French, German, Greek, Hebrew, Italian, Polish, Portuguese, Romanian, Russian, Spanish, Turkish and Vietnamese.|
|Customer Service Hours||24/5|
Frequently Asked Questions
How many instruments can I trade with Finotec?
You can trade several different instruments with Finotec, which include the following:
Which platforms are supported by Finotec?
Finotec provides the following popular trading platforms:
- Web XTrader
- Fix API
Does Finotec offer leverage?
Yes, Finotec offers a maximum leverage of 1:40
Is Finotec regulated?
Yes, Finotec is regulated by Financial Conduct Authority in the United Kingdom
Featured SA Shares Writer and Forex Analyst.