Pepperstone is a forex broker based in Australia that also provides CFDs. The company was established in 2010, and in 2015 it launched an office in London to better serve its European customers. After Brexit, Pepperstone’s German and Cyprus entities will serve newly registered EU customers. Seven national regulators oversee Pepperstone, including three top-tier financial authorities: the United Kingdom’s Financial Conduct Authority (FCA), Germany’s BaFin, and Australia’s Securities and Investments Commission (ASIC). Pepperstoner provides an expanding selection of tradeable markets, high-quality research, and support for several social copy trading platforms.
List of Contents
Pepperstone Broker: Website
Country of regulation: UK, Germany, Cyprus, Australia, United Arab Emirates, Bahamas, Kenya
Trading fees class: Low
Inactivity fee charged: No
Withdrawal fee amount: $0
Minimum deposit: $0
Time to open an account: 1 Days
Demo account provided: Yes
Products offered: Forex, CFD, Crypto
Since the company founed in 2010, Pepperstone Group has risen to the top of the online brokerage industry, create a highly competitive and many feature trading site that concentrates on forex, shares, indices, metals, commodities, and even Cryptocurrencies.
A modest initial deposit of 200 units in the base currency enables new traders to enter the market, while leverage ratios of up to 500:1 facilitate their participation. The company is registered with the Financial Conduct Authority (FCA #684312) and the Australian Securities and Investments Commission (ASIC #147055703) in the United Kingdom. Pepperstone, also like many other forex brokers, does not accept U.S. traders.
In a sector prone to volatile periods, the separation of customer accounts and corporate cash provides an additional layer of security. There are many ways to get help, like chat support and phone support available 24 hours a day, seven days a week. Moreover, a Frequently Asked Questions (FAQ) page with clear information about how deposits, withdrawals, and trade disputes work.
Multiple desktop, mobile, and web-based platforms, an industry-standard product library, better-than-average learning tools, narrow spreads, and various account types. All make it easy for both new and experienced traders to trade.
Customer Service
In addition to email help, the broker provides chat/phone service 24 hours a day, seven days a week, social media platforms, and online contact forms. In addition, clients are assigned a dedicated account manager to assist them with specific of account concerns, given that the organization advertises that it does not have a dealing desk. It follows that clients would not be able to contact the dealing desk in the event of a trading emergency. Local customers can visit the main office in Melbourne, Australia. However, online assistance methods are more likely to yield prompt results. A high quality FAQ handles most questions. The broker may enhance its handing and content.
Products
Pepperstone offers:
- 60+ FX pairs
- 16 index CFDs
- 60+ share CFDs
- 12+ commodity CFDs
- 5 cryptocurrency CFDs
- 3 currency index CFDs
All instruments are available across all account types, although Cryptocurrency costs need to be well-documented, which is surprising given this category’s high volatility and normally wide spreads. Utilizing the MetaTrader 5 forex trading platform, Pepperstone traders also can trade U.S. share CFDs. In addition, over 60 U.S. stocks are available for CFD trading, with minimal costs starting at $0.02 per share. These CFDs allow long and short positions.
Pricing
Pepperstone has competitive fees in the online broker market. New clients can choose the “Standard” account with minimum FX spreads starting from 1 pip, and no commission or the “Razor” account with minimum FX spreads starting from 0 pips and commission. All of Pepperstone’s other instruments have straight spreads or spreads plus commission.
A broker claims the average spread for EUR/USD on Razor is 0.13 pips plus a commission. The Standard account spread is 1.13 pips all in. With an MT5 Razor account, a completed (buy & sell) 100,000 Euro trade will cost 0.13 pips + €5.23 commission. So, this would be 0.653 pips total.
The website’s transparent spreads are bewildering (outlined in the graphic below). Assuming the variations indicated are investigation, and there are no differences between MT4 and MT5 FX spreads, Pepperstone’s spread fees are among the lowest in online retail forex.
To create an account, clients need 200 basic units. The site accepts Visa, MasterCard, POLi, Bank Transfer, BPay, PayPal, Skrill, Neteller, and Union Pay. “Funding options are no fee for most traders,” says the broker. There were no inactive or dormant fees found in the site’s FAQs or disclaimers. But, Pepperstone doesn’t charge an inactivity fee, a rarity in the industry. Fees apply to international wire withdrawals.
As is the standard in FX, clients will pay swap costs on overnight positions. Pepperstone’s overnight rates are benchmark regional interest rates for the underlying product plus (or less) a 2.5% fee.
The website’s “New to Trading” FAQ details how the required margin differs by instrument. Prospective clients can view margin requirements for all products by logging into the “secure client area” > “trading tools” > “calculators” > “margin calculator.”
Pepperstone also offers a no-swap Islamic account with admin fees after two days.
Trade Experience
Pepperstone provides a variety of platforms to accommodate all investment and trading styles. The media are white-label, third-party products, as Pepperstone has avoided developing its interface. Customers can pick between MetaTrader (MT) 4/5 and cTrader, a high-end system with direct pricing from liquidity providers and extensive technical features such as detachable charts, back-testing, and algorithmic strategy assistance. Innovative Trader Tools for MT4 enhances technical capability by introducing applications that aid trade execution, market research, and market study depth.
Pepperstone’s cTrader is a streamlined trading platform available as a download or web interface, stable, and easily accessible from any web browser (Chrome, Firefox, Safari, or Internet Explorer). Moreover, this platform offers a redesigned appearance and feels, trading with a single click and complete integration across desktop and mobile platforms, enhancing the trading experience for all traders.
Traders can set up watchlists, evaluate charts, place and monitor trades, view an instrument’s “depth-of-market,” and keep updated on future events with the market calendar on Pepperstone’s cTrader, which offers a simple and user-friendly interface. More than 70 technical indicators, ranging from tick charts to monthly charts, can be used on the technical analysis charts, which can be expanded to fill the entire screen.
Security
Lloyd’s of London provides professional liability insurance to Pepperstone. ASIC’s ACN 147055703, AFSL 414530, and the Financial Conduct Authority’s (FCA’s) Company Number 08965105 and FRN 6812, as well as the Financial Conduct Authority of the United Kingdom, all regulate Pepperstone, an Australian broker. The Australian Securities and Investments Commission (ASIC) mandates that financial services organizations “meet stringent capital requirements and create and comply with internal procedures. In addition, risk management, personnel training, accounting, and audits are also included.”
The Financial Services Compensation Scheme Protection provides up to £85,000 in coverage for U.K. dealers (FSCS). Moreover, National Australia Bank holds client funds in a separate account to prevent misuse. Ernst & Young conducts an independent audit of Pepperstone Group.
The trading platforms use automatic stop-out procedures to minimize negative balances, although the website notes that in turbulent market situations, “losses may surpass your deposit amount.” Pepperstone offers negative balance protection to its U.K./E.U. Clients, as mandated by ESMA legislation that went into force in 2018. Non-U.K./E.U. Clients do not receive negative balance protection, and there is no guaranteed stop loss. The broker has two-factor authentication (2FA), but its mobile application does not support biometric authentication.
Education
Through a dedicated section, Pepperstone’s website provides extensive educational tools, including “Learn To Trade Forex” courses, multiple archived and live webinars, and a comprehensive range of trading guides. Commodity trading is also discussed in-depth, along with slippage, hedging, and margin. In addition, Pepperstone highlights assistance services like platform comparisons, platform instructions, and deposit/withdrawal procedures in this area. The website also provides conventional instructional content, such as a market lexicon and lessons on technical analysis.
Pros and Cons
Pros
✔ Low foreign exchange spreads
✔ FCA-reglementated (U.K.)
✔ Offers security for British customer accounts
✔ Variety of available services
Cons
✘ Insufficient website maintenance
✘ Does not serve U.S. clients
✘ Non-UK/EU customers have limited account security.
✘ No guaranteed stop loss
Pros Clarified
- Pepperstone advertises minimum FX spreads beginning at one pip with commission-free “Standard” accounts and zero spread with commission-based “Razor” accounts. So, this is a very competitive retail FX brokerage market.
- Pepperstone is regulated by the Financial Conduct Authority (FCA #684312), one of the primary regulatory authorities in the United Kingdom and is well-regarded internationally for ensuring that market activities are fair for individuals and businesses alike. A firm’s legitimacy is significantly enhanced by the fact that a respectable government-backed organization governs it. Traders also understand the inherent risk of markets, but they want the piece of mind that their funds are not exposed to risks other than those they are taking, such as counter-party risk. Moreover, all client monies are stored at Tier 1 financial institutions.
- Pepperstone only offers “negative balance protection” to its British customers. This is an increasingly important service that most internet brokers now provide. The 15 January 2015 SNB event was most likely the impetus that shook the markets, notably the heavily leveraged retail FX market.
- Pepperstone also offers clients the option between MetaTrader 4/5 and cTrader, a high-end platform with direct liquidity-provider pricing and extensive technical features such as detachable charts, backtesting, and algorithmic strategy support.
Cons Clarified
- Maintenance of the website has much to be desired. Web presence is one of the defining characteristics of an efficient firm, especially in 2020. While Pepperstone’s website has an intuitive feel, a few pages include erroneous, out-of-date, or insufficient information.
- Due to regulatory restrictions, Pepperstone cannot accept U.S. clients and cannot be termed a global broker. This would be a red warning if the company were not controlled by the FCA, which, along with U.S. regulatory authorities (NFA, CFTC), is usually regarded as the principal regulatory agency.
- Pepperstone does not provide negative balance protection to non-UK/EU customers. This means a client could lose more than their account balance and owe the broker money.
- Pepperstone does not offer guaranteed stop-loss orders (GSLO). So, GSLOs safeguard the trader from market gap risk, and many brokers are ready to provide this service (for an additional fee) and assume the risk themselves.
Is Pepperstone A Broker Worth to Get?
Pepperstone provides clients with the most comprehensive trading experience available among online forex brokers. The broker’s lightning-fast execution systems, different account kinds, competitive pricing, and several platforms (MT4 and MT5, as well as complete cTrader capability) surpass the great majority of forex brokers globally.
Being FCA-regulated enhances the firm’s reputation. However, the paradox of giving negative balance protection while lacking guaranteed stop losses is a little unsettling. Inadequate website maintenance demonstrates a disregard for detail. The instructional catalog is adequate, and customer service is somewhat above average.
Overall, Pepperstone provides a fantastic trading experience for all traders, whether cost-conscious or technologically advanced.
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Source: Investopedia