Capital Index Review - FCA Regulated Forex and CFD Broker
Our Capital Index Review - Updated for October 2020
Capital Index is an online broker that was established in 2014 and has offices the in United Kingdom, Europe, and Australia. The broker focuses on CFDs, spread-betting, and spread-trading across a scope of instruments such as forex, commodities, indices, and metals.
Capital Index has invested immensely in incorporating advanced technical infrastructure and offers a structured trading space that encourages continued growth. The broker used its knowledge and experience in client support, as well as advanced trading technology to help the company reach its desired success.
Capital Index uses ‘No dealing desk execution (NDD)’ that provides honest, quick, and safe trading. This ensures the best market prices along with the top security, providing the client fairer and vaster trading options.
Capital Index offers a variety of accounts to their clients that all vary in their capabilities. Despite their differences, all of the accounts offer the following benefits:
- All accounts are available in GBP, EUR, USD
- MT4 is available via a desktop platform, mobile, and phone
- There are no requotes
- NDD - No dealer intervention
- Hedging is allowed
- Expert advisors (EAs) are allowed
The advanced account has a minimum deposit requirement of 100 GBP/EUR/USD. The advanced account has spreads from 1.4. Minimum trade size is 0.01 lot / £0.10 for forex and 0.1 lot / £0.10 for non-forex instruments. Trade size increment for forex is 0.01 lot / £0.10 while for non-forex it’s 0.10 lot / £0.10. This account type does not charge commission.
The Pro account has a minimum deposit requirement of 5000 GBP/EUR/USD. The pro account has spreads from 1.0. Minimum trade size is 0.01 lot / £0.10 for forex and 0.1 lot / £1.00 for non-forex instruments. Trade size increment for forex is 0.01 lot / £0.10 while for non-Forex it’s 0.1 lot / £0.10. This account type does not charge commission.
The black account has a minimum deposit requirement of 50000 GBP/EUR/USD. The black account has spreads from 0.4. Minimum trade size is 1 lot / £1.00 for forex and 1 lot / £1.00 for non-forex instruments. Trade size increment for forex is 0.10 lot / £0.10 while for non-forex it’s 0.10 lot / £0.10. This account type does not charge commission.
Brokers can also opt to apply for Elective Professional Client status, but they must meet the eligibility criteria (at least two of the following):.
- They have place 10 relevant trades of a significant size ( Significant sized trades are classified as having a notional value of £10,000 for equities and £50,000 for Forex, Indices, and Commodities or equivalent in local base currency) per quarter in the last year.
- Their financial instrument portfolio exceeds €500,000.
- They work or have worked in the financial sector for at least one year in a position, which requires a certain level of knowledge in trading.
Professional Accounts have the benefits of higher leverage options, but they do lose some protections, such as:
- Professional Clients are not eligible for negative balance protection and will have an obligation to make additional payments if their account falls into negative balance, which means they can lose more than they deposited.
- Unlike a Retail Client, Capital Index (UK) Limited will not be required to restrict leverage offered to Professional Clients in line with the FCA supervisory measures. Higher leverage can mean higher losses if the markets move against the trader.
- As a Professional Client, Capital Index (UK) Limited may assume the trader’s level of knowledge and experience when assessing whether their products are appropriate for Professional Client.
- Capital Index (UK) Limited will not be required to provide the Professional Client with written risk warnings and notices in relation to transactions in complex financial instruments.
Capital Index also offers services to institutional clients, such as funds, family offices, brokers banks, and professional traders. The services they offer are:
- API & Liquidity solutions (LD4 & NY4)
- IB and Partnering
- White label
- Prime of Prime
- Data Services
- UAT testing environment with MT4 or GUI
Account Opening & KYC
Opening an account with Capital Index is quick and easy. Traders must initially register standard details such as name, surname, date of birth, phone number, email, etc. The application will take just 5 minutes. After this, Capital Index conducts the standard due diligence procedure, ‘Know Your Client’ (KTC) which enabled the broker to collect more detailed information about their clients. Traders must submit the following documents:
- A recent utility bill or bank statement (less than three months old)
- Government ID, passport, or driver's license.
After the documents are submitted, the broker will assess whether the potential client is eligible to trade with them by asking them to pass a short online test. The test will evaluate whether the trader has the knowledge and experience to trade high-risk financial instruments.
Trading Conditions and Clients' Fund Protection
Although different kinds of accounts are structured to distinguish between trading needs, each one lists lower spread offers as soon as the trading size climbs up. Overnight fees or swaps are also to be considered as trading costs, because if traders hold an open position for longer than a day, specific fees apply. Below are some examples of Capital Index’s fees:
- EUR/GBP: 1.2
- EUR/USD: 1.0
- EUR/USD: 1.0
- EUR/JPY: 1.5
- USD/CHF: 1.5
- CHF/JPY: 2.2
- CAD/CHF: 2.3
- EUR/CAD: 2.8
- GBP/CHF: 3.2
- GBP/JPY: 2.5
- EUR/CZK: 30
- EUR/HUF: 20
- EUR/MXN: 150
- EUR/PLN: 25
- .AUS200: 4
- .FRA40: 1.1
- .GER30: 1
- .HK50: 9
- .JAPAN225: 10
- XAUUSD: 0.3
- EUR/JPY: 0
- CAD/CHF: 4.6
- CHF/JPY: 3.5
- EUR/CAD: 5.8
- EUR/CZK: 35
- EUR/HUF: 35
- EUR/MXN: 200
- EUR/PLN: 30
- EUR/TRY: 35
- .AUS200: 5
- .FRA40: 2
- .GER30: 2
- .HK50: 11
- XAGUSD: 0.46
- XAUUSD: 0.5
- XPTUSD: 2.5
- WTICrude: 7
- BrentCrude: 6
- AUD/USD: 0.7
- EUR/CHF: 0.8
- EUR/GBP: 0.6
- EUR/JPY: 0.7
- EUR/USD: 0.4
- CAD/CHF: 1.3
- CAD/JPY: 1.0
- CHF/JPY: 1.0
- EUR/CAD: 1.2
- GBP/CAD: 1.4
- EUR/CZK: 14
- EUR/HUF: 12
- EUR/MXN: 65
- EUR/PLN: 15
- .AUS200: 4
- .FRA40: 1.1
- .GER30: 1
- .HK50 9: 9
- .JAPAN225: 10
- XAGUSD: 0.2
- XAUUSD: 0.17
- XPTUSD: 1.9
- WTICrude: 3
- BrentCrude: 3
The trading hours of Capital Index are 24 hours per day, from 00:00 on Monday until 24:00 Friday server time. Server time is UK time + 2 hours.
The leverage provided by Capital Index depends on the financial instrument you trade. This is because different regulators have different leverage caps. Australian clients will have high leverage of up to 1:500 for currency trading, whereas European and UK clients will be capped at 1:30 due to the regulations enforced by ESMA.
Traders can deposit funds using most popular payment methods, such as debit and credit cards as well as bank transfers. In addition to that, Capital Index now has another withdrawal option – the MasterCard Prepaid Capital Index.
So, when the customer withdraws, the money is immediately added to the card as it’s deducted from the trading account. The minimum withdrawal is $10, while the fee per month is $1.95.
There are no costs for deposits or withdrawals, except if the client wants to withdraw on the same day. The minimum deposit is 100 units of the selected base currency, but this depends on the account type and the currency the client chooses.
Since Capital Index is headquartered in London, it is authorized by the FCA in the United Kingdom and registered as Capital Index UK Limited. The broker is also registered in the Bahamas and Australia. In the Bahamas, the broker is registered as Capital Index Global Limited and falls under the regulation of SCB. In Australia, the broker has an entity through Cardiff Global Markets Pty Ltd named ForexCFDs which is authorized by the ASIC.
Strong regulation means security measures are being followed by the broker. Brokers are subject to numerous limitations due to regulations imposed by authorities such as the FCA. These help the regulators monitor how the broker conducts itself. As a result, all client funds are completely separated, in segregated bank accounts. This means that client funds are not being utilized for the purpose of the broker
Capital Index also follows an operating model developed by globally renowned authorities that offer adequate financial transparency, competition, and vast client security across the EEA and around the world.
Trading Platforms and Financial Instruments
When it comes to the trading software, Capital FX provides the opportunity to place spread bets, spread trades, and trade CFDs on forex, indices, and commodities. The platform the broker uses is MetaTrader 4 which is downloadable as software and is available on mobile for on-the-go trading. MT4 is amongst the top trading platforms in the world and is a favorite of many brokers.
The platform encourages using EAs for auto trading and offers various charts and custom indicators. In addition, MetaTrader4 offers the chance of trading straightforwardly from the chart in a manual or automated way via EAs.
Advantages of MetaTrader 4 (MT4):
- It is an industry-leading platform
- MT4 offers flexible trading
- Various order types available
- Many charts available
- High-quality execution
- 9 different time frames available including tick charts
- Technical Analysis with over 50 indicators and analytical objects
- Trading signals and copy trading available
- Algorithmic trading (EAs) available
- You can trade via desktop, mobile or tablet
Capital Index offers various products for trading such as forex, CFDs, and spread betting:
Forex: The forex market is the biggest financial market in the world based on trading volume, with over $5 trillion traded every day across the world.
CFDs: Contracts for Difference allow traders to bid of price fluctuations of an underlying asset which means you don’t actually own but simply speculate it’s price movement. CFDs can be based on stock indices or commodities.
Spread Betting: Spreading betting allows traders to speculate on the price movement of various financial markets such as forex, indices, or commodities by choosing a buy or sell position. Traders need to enter the amount they wish to trade ‘per point’ and their profit or loss will move with these increments.
Capital Index offers basic traders education via monthly seminars, webinars, daily video updates of key economic data, an economic calendar, trading guides, and a trading glossary.
Capital Index offers the following training guides:
Forex trading guides
- Introduction to forex trading
- Currency pairs explained
- Understanding pips and spreads
- Basic Forex terminology
CFD trading guides
- Introduction to CFD trading
- Advantages of trading CFDs
- The risks of trading CFDs
- Margin and Leverage explained
- Basic CFD terminology
General trading guides
- How to manage your trading risk
- How to start trading the markets
- Top tips for new traders
- Different types of trading strategies
- How to place different order types
- Three types of market analysis
Customer Support at Capital Index is available is the following languages: Capital Index support a wide range of languages including English, Spanish, Czech, Chinese, German, French, Italian, Polish, Portuguese, Romanian, Slovenian, Hindi, Hebrew, Arabic, Russian.
Capital Index offers support via live chat, email, and phone. While the phone support answered quite fast, email and live chat is much slower.
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Wednesday, January 19, 2022