First of all, find a regulated company, but where to supervise is also particularly important. Generally speaking, it is safer to choose margin financing and securities lending companies in countries with moderate supervision, especially when systemic financial risks occur. The investor's protection network has two layers: big banks and countries. Small and medium-sized investors will be protected to a certain extent and generally will not be affected by the bankruptcy of margin financing and securities lending companies. On the contrary, in order to avoid supervision, some margin trading companies deliberately register in a small island or a country without supervision at all. It is best not to choose such a company.
Second, margin dealers should be honest.
At present, some companies that do have deposits have many moral problems. Some margin trading platforms think that investors can't sue them because their registered place is overseas, so they often change the charging standard and overnight interest calculation method, and even adjust the spread to make a "overlord" treaty. This kind of margin company, investors have complaints online, can be retrieved. Therefore, investors of the first-tier margin financing and securities lending companies must ask whether the charging standards such as commission and the calculation method of overnight interest will change at will, whether the trading spread is fixed and whether it will be adjusted at will with the changes of the market. It is also necessary to check online whether they have a "criminal record" of "overlord opening a shop" and whether they have changed the transaction costs without authorization!
Third, the stability of the margin trading platform itself and the consistency with the international market (quotation) data.
Due to the different level and ability of risk management, the performance and advanced degree (server size) of the software used in the platform, and the distance between the network server and Chinese mainland, the stability of various margin platforms varies greatly. Some platforms even often collapse when the international market fluctuates greatly (to be fair, there may be no platform that does not interrupt trading completely, but the collapse, especially the collapse of big markets, is mostly malicious), which makes investors unable to trade. Of course, this platform cannot be selected. There are also platforms with poor stability, and commissions or spreads fluctuate with price changes. It is best not to choose this platform. More margin platforms are inconsistent with the international market (quotation) data, which is often unilateral and always unfavorable to investors. This situation is obviously malicious in the trading software, in order to transfer risks to investors. Of course, such a platform cannot be selected;
Fourth, the consideration of transaction cost.
There are only two possibilities for margin financing and securities lending companies that claim to accept only one or two points, or even no points: first, they do not transfer orders to banks at all, and all transactions of investors are exactly the opposite, which is what the market often says about gambling. Such a platform can certainly save money, but the risk is very high; The second is to make money by "running points", nominally spending less money, but actually a little more or more. It must be emphasized that there are many such platforms now. My conclusion in the investigation is that, generally speaking, about four points are the breakeven point for margin financing and securities lending companies to basically maintain normal operations, and six points are normal profits (it is very important for margin financing and securities lending companies and investors to maintain normal profit levels). Margin companies will try their best if they can't make money. Of course, if there are many customers and the transaction volume is large, 4-5 points can also make a good profit-the problem is that margin companies are mostly small companies, and there are not so many customers. More than 6 points, high cost, less than 3 points is self-deception, investors should be cautious;
Fifth, choose to design a more humanized margin platform.
Simple operation is very important, dual-machine backup, telephone ordering and so on are very important. In addition, margin companies must consider the operation of customers, and the more humanized the design, the more investors like it. For example, the meta of VNFX
Trader 4
(MT4) trading platform, the page design is simple and clear, which is convenient for investors to place orders. The platform clearly shows the daily overnight interest gains and losses of each currency. In addition, it also has the function of reminding key prices, combined with the function of viewing transaction pictures.
Six, the trading platform access channels must be smooth.
Margin may be more important than cash withdrawal, because there may be a need to cover the position immediately in margin trading. If the channel is not smooth, a remittance will arrive in three days, and the investor's position may have exploded. Of course, it is necessary to withdraw money quickly, but safety may be more important. Because margin companies and customers don't meet, in most cases, they contact each other through the internet. In order to prevent insiders from "stealing" customers' funds, many margin companies require customers to sign a "withdrawal application form" in person when withdrawing money. Some investors may think this is troublesome, which is necessary to protect investors. It must be admitted that most margin companies now have the problem of depositing and withdrawing money in underground channels, but few margin companies can solve this problem. Many people make money on the surface because they don't choose a good platform, but in fact they can't make money at all.