Saxo Capital Markets Strength And Weaknesses
The key strengths of Saxo Are
The key weaknesses of Saxo are:
Strength 1 – Wide Range Of Markets
Saxo capital markets Australia offering is more than just currency trading. The broker has a wide range of services from share trading to contract for difference (CFDs). Below shows the wide range of markets offered all matches by low brokerage fees and commissions.
Saxo bank offers forex traders access to a selected range of trading instruments across different asset classes. With a Saxo Bank account, you can gain exposure to the most popular and liquid markets worldwide including:
- Forex currency pairs (+182 major pairs, minor and exotic)
- CFDs (+9,000 instruments)
- Stocks (+19,000 across 36 global exchanges)
- Commodities (19 commodity CFDs)
- Futures (+200 future contracts)
- FX Options (+40 FX vanilla options)
- Listed Options (+1,200 options from 23 exchanges worldwide)
- ETFs (3,101 from 30 exchanges worldwide)
- Bonds (5,000 government and corporate bonds)
- Mutual Funds (250 top-rated mutual funds)
- Cryptocurrency (Bitcoin and Ethereum traded through ETNs)
Stock Brokerage Services
Shares trading is one of the most popular services offered by Saxo Capital Markets. They offer share trading in Australian, USA, UK, Singapore and even Chinese stocks. Overall, traders have access to over 19,000 shares overseas across 36 exchanges. There share trading offering won “Outstanding Value International Share Trading” in both 2017 and 2018. Other share related services are over 3,101 ETFs, ETCs and ETNs and they also offer over 1,200 listed options. Below shows the Saxo Capital Markets brokerage fees compared to other leading stockbrokers.
Forex Trading Services
The key areas of this Saxo Capital Markets review were on their currency trading offering. This includes the ability to trader across 182 forex spot pairs, over 140 forwards and +40 FX vanilla options. Four key components lead FX traders to choose Saxo for currency trading.
i) ‘Tier 1’ Liquidity
Saxo uses a wide range of ‘tier 1’ banks and other sources from market-making firms to ECNs to ensure traders receive the best possible price. This helps minimise spreads that exist when a forex broker sources just one or two sources for a buy/sell rate.
ii) Price Improvement Technology
A key Saxo Bank feature is its customised orders offering. This provides forex traders with great control and near-zero asymmetric slippage occurring. This leads to real benefits on a large number of currency trades through the Saxo forex trading platform.
iii) Reduced Premature Stop-Outs
Saxo triggers stop orders at the opposite end of the spreads, to minimise forex traders from being stopped out early. This is set a neutral price via a large inter-bank venue. Premature stop-outs are one of the most complained features of other forex brokers and a key positive found in this Saxo Capital Markets Australia review.
iv) Client-centric approach
We fully disclose our dealing practises and never trade against you in the market. Our commitment to transparency shows that our interests are fully aligned with yours.
CFD Trading Services
The final area Saxo offers is the contract for difference (CFDs Trading). You can trade leveraged products with Saxo Bank on more than 9,000 CFD instruments including shares, indices, bonds, ETFs, commodities and index options as shown below.
Commissions on US stocks are USD 3.00 while Australian CFDs stock commissions start at AUD$6. Leverage varies and for the US 500 is 40:1 with spreads of 0.4 points. Below you can review the different types of CFD trading commissions charged across the 3 main Saxo trading accounts.
Wide Range Of Markets Saxo Capital Markets Review Conclusion
It’s not unique for a forex broker to offer more than just currency trading with most also offering CFDs trading. What separates Saxo is their domestic and international stockbroking services. This makes Saxo Capital markets a one-stop-shop broker ideal for those looking for more than just a forex broker.
Strength 2 – Low Spreads And Fees
Saxo offers three trading accounts including classic, platinum and VIP. The most popular trading account is the Classic account which has a minimum deposit requirement of $10,000. This account has entry prices which beat other leading forex brokers when it comes to spreads as shown below.
Breaking down the three accounts further:
1) Classic Account
As mentioned above, the minimum funding required of the classic account is $10,000. While a core feature of the account is the low spreads the other elements are:
- In-house analyst
- 24-hour customer support
- Integrated support online
2) Platinum Account
This account is designed for advanced traders which is why the requirement for funding this account is $200,000 minimum deposit. This account type advertises tighter spreads and commissions. Other core features include:
- Up to 30% lower prices
- A personal relationship manager
- Access to customer service 24/5
- Analyst data and information
3) VIP Account
The VIP account is one of the most exclusive trading accounts offered by a forex broker and stockbroker industry. With a funding requirement of at least $1,000,000, this account type is geared towards the high-net-worth individual (HNWI). These premium clients receive VIP spreads and fees as well as features including:
- fixed lower spreads
- Dedicated sales trader
- Personal relationship manager
- Exclusive events and hospitality
- Direct access to Saxo experts
- 1:1 SaxoStrats access
Summary Of Saxo Capital Markets Spreads
Across the three accounts offered Saxo has low spreads compared against leading retail brokers such as IG Markets. The more your willing to deposit the lower the spreads will be but even the classic is competitive. Saxo also focuses on simplicity with trading costs with no volume-based commissions and minimum commission fee.
Strength 3 – Saxo Forex Trading Platform
Saxo Capital Markets Australia offers two of there own propriety forex trading platforms. Each has distinct advantages over each other with one designed more for mobility across mobile and tablet while the other is designed for trading power. These have won many awards including the ADVFN platform award.
SaxotraderGO – The Choice For Traders + Investors
This platform has won Saxo Capital Markets awards based on reliability, execution speeds and functionality across devices. It’s web-based with full functionality across desktop, mobile app and tablet devices with:
- Access to over 35,000 instruments with no subscription fees
- Trades and orders can be managed directly from charts
- A wide range of markets from forex, stocks to CFDs
- Equity research tools that analyse sentiment and fundamentals
Below shows six additional features Saxotrader Go offers FX traders. Features like quick close, margin breakdown and cancel all orders are unique to Saxo. Historical reports can also be downloaded for tax and bookkeeping purposes.
SaxotraderPRO – Build For Professionals
This professional-grade fox trading platform is designed for expert traders who use multiple screens when trading. It works both on Mac and Windows and while it also has apps for tablet and mobile devices (iOS and Android) it’s made for PC. There is no web-based version with features including:
- Enhanced trade tickets maximising speed and productivity
- Algorithmic orders that are integrated into trade tickets
- Charting packages with over 50 technical indicators
- Option chain allowing switching between instruments
- Level 2 market depth with real-time prices
Summary Of Saxo Capital Markets Trading Platforms
Our Saxo Capital Markets Australia review found it was strong in this category but lost points for the lack of mainstream options such as MT4 and cTrader. Both Saxo trading platforms don’t require subscription costs with the PRO platform recommended on desktops with multiple screens while the GO account is for everyday traders.
Weakness 1 – Low Leverage
CFD trading and currency trading require leverage due to the relatively small movements daily. For example, a currency pair such as the AUD/USD rarely changes by more than 0.5% a day. This means margin trading is required, which allows a multiple of the original deposit to be traded. In the case of Saxo Capital Markets, the leverage rate is as follows:
- For Saxo retail clients: 30:1 for forex trading and 20:1 for CFDs trading.
- For Saxo professional clients: 66:1 for forex trading and 40:1 for CFDs trading.
This is low compared to other leading forex brokers as shown below.
To explain leverage further, in a scenario where the minimum Saxo classic account is made of $10,000, the trader can effectively trade $300,000 worth of currency on forex markets at a 30:1 leverage. If this trader placed these funds on the AUD/USD and a movement of just 0.2% occurred they would make a profit/loss of $600 (10% of their deposit).
Benefits Of Higher Leverage
While higher leverage increases exposure to markets and increases risks of CFDs and forex trading it can be a core requirement of a trader. This is especially true when using automated trading which can require micro-moments to enter and exit the market. Other expert traders want the exposure to the market to maximise returns at during key trading periods. These traders may want to consider a forex broker like Pepperstone that have leverage up to 500:1.
Our devoted team of investment and business professionals believe that a full Saxo Capital Markets review must include the full spectrum of the online service offered by the Danish broker. Which is why our team of investing professionals took a snapshot of Saxo’s margin requirements for both professional traders and retail traders as shown below.
Weakness 2 – Risk Management Tools
While our Saxo Capital Markets Australia review found that leverage was relatively low, this doesn’t mean that trading doesn’t have risks involved. In-fact, any leveraged product such as CFD trading has risks, which is why risk management tools are recommended. Below will go through the four core risk management tools and what Saxo offers.
1) Stop Loss Order – Saxo Offers
Stop-loss orders allow a trader to determine the amount they are willing to make or lose on a trade. This is then converted to a buy/sell level which will be triggered automatically when achieved. This allows the trader not to have to manually calculate exit/entry points and watch the market actively. The big issue of stop-loss orders is they are not guaranteed and in extreme volatility, the software may not be able to trigger the exit point. This can lead losses exceeding the amount set on the stop-loss order.
2) Guaranteed Stop Loss Order – Saxo Does Not Offer
A guaranteed stop-loss order is exactly the same amount as above but the forex broker guarantees the exit level. This means that you can’t lose more than the amount set providing piece of mind. The issue of a guaranteed stop-loss is they may require an additional trading fee. Saxo does not offer this feature.
3) Negative Balance Protection – Saxo Does Not Offer
In extreme volatility, the currency pairs and CFDs markets can move fast. With no guaranteed stop-loss orders Saxo losses may exceed expectations. These losses can even exceed the deposit made to Saxo. When this occurs Saxo states that the funds will need to be repaid to avoid a negative balance. Interest will be charged at market ask rates plus 8% when delays occur in repayment. Some Australian forex brokers don’t allow traders to go into negative balance even if they cover the costs. This is called negative balance protection and should be considered if your risk tolerance is low.
Note* Due to the new ESMA regulations, Saxo Bank offers negative balance protection for retail clients, however, professional traders will continue to remain unprotected from losses than can exceed the initial deposit.
Weakness 3 – Funding Requirements
Many traders look to trade small amounts and require a low minimum deposit by their forex broker. Saxo Capital Markets accounts don’t offer this with the classic account starting at $10,000. The $1,000,000 VIP account is one of the highest minimum funding accounts of any retail forex brokers.
If your happy to have funds locked in an account then funding requirements won’t be an issue. But if you don’t like funds tied up any account then you should consider other forex brokers who have a minimum deposit as low as $50.
Additional Information about Saxo Bank
Saxo bank is a world-leading online trading provider with offices in major financial hubs from across Europe, Asia and the Middle East. With its headquarters in Copenhagen, Denmark and 15 main offices that includes Switzerland, UK, Paris, Hong Kong or Dubai, the Danish company can serve professional traders and retail investors from more than 180 countries.
Our team of experts at Compare Forex Brokers found that Saxo Bank has a rich history that sets apart the Danish company from other respected forex brokers. Founded in 1992, Saxo Bank Group is more than a simple retail forex broker. Saxo Bank is a fully regulated European Bank that can act as your bank as well as an online broker.
Saxo Bank Regulation and Licenses
Home.saxo clients can trade under the umbrella of the world’s top financial regulators. Retail investors can start trading and invest in the financial markets knowing that Saxo Bank complies with the high standards imposed by the local Danish regulatory agency the Financial Supervisory Authority (FSA) as well as 12 other global regulatory bodies, including:
- Financial Conduct Authority FCA (License number 551422)
- Swiss Financial Market Supervisory Authority FINMA (License number CHE-106.787.764)
- Japanese Financial Services Agency (Registration Number 239)
- Australian Securities and Investments Commission ASIC (Registration Number 126 373 859)
Forex Trading Education
Saxo Bank gives its clients access to world-class education material that caters to beginner traders as well as professional traders. Saxo Bank’s courses are designed to help beginner currency traders start trading. What’s unique about Saxo offering is its quizzes which can assist traders to track their progress.
The educational and market research resources found on Saxo Bank website also includes:
- Video Guides
- Market Analysis
- Macro – Fundamental Analysis
- Quarterly Outlook
- Outrageous Predictions
Additionally, SaxoStrats offers forex traders the chance to follow a team of Saxo Bank experts that will supply you with actionable insights via a podcast service.
Saxo Bank Account Funding
In terms of the deposit and withdrawal methods, Saxo Bank offers only a limited number of payment options. In our Saxo Capital Markets review, we only found that forex traders can make a deposit or withdraw funds from the Saxo Bank account via the following methods for transferring money:
- Credit card
- Debit card
- Wire transfer from your bank account
Additionally, Saxo Bank supports a limited range of funding currencies. Forex traders can deposit funds using USD, GBP and EUR. By comparison to other online brokers, Pepperstone can offer multi-currency deposit solution that includes 10 different base currencies.
NO Metatrader 4 Platform
The most popular trading platform among retail traders the Metatrader 4 platform is not supported by Saxo Capital Markets. Forex traders who are accustomed to do their technical analysis with one of the most user-friendly platforms in the FX space can be disappointed to not find the MT4 among the trading platforms offered by Saxo Bank.
Forex traders need to be aware of the inactivity fee charged by Saxo bank. Our Saxo Capital Markets review found that an inactivity fee is levied on all Saxo Bank accounts that have been inactive for a prolonged period. Saxo Bank charges an inactivity fee of $100 or the equivalent amount in the account currency if there are no trades executed for a period of 180 days.
Saxo Capital Markets Australia Review Conclusion
Overall, our Saxo Capital Markets review concludes that the Denmark-based forex broker offers all the trading tools and a wide range of financial products to accommodate the needs of all types of traders. The only major disadvantage is that Saxo Capital Markets requires a high minimum deposit of $10,000 to start trading CFDs.
Saxo is recommended for anyone looking for an all-in-one trading solutions. You can buy and sell both domestic and international shares as well as trading currency pairs and CFDs with their award-winning trading platform. They also offer low spreads and fees making them a low fee share and trading solution. You should only consider a different forex broker if you require high leverage, risk management tools or require a low minimum deposit.