(5)NCAs reported an overall decrease in the number of CFD retail client accounts, trading volume and total retail client equity over the month of August 2018 in comparison with August 2017. The share of profitable retail client accounts decreased slightly, but this appears to be mainly arising from the soaring prices of cryptocurrencies in August 2017 6 . Comparing client outcomes over time is not only impacted by the product intervention measures, but also for example by market conditions. Market conditions in August 2017 were bullish in comparison to August 2018. Furthermore, the population of retail clients changed 7 . Finally, NCAs reported a decrease in the number of automatic close-outs and the occurrences that accounts went into negative equity 8 .
Recital 5
- 6 For example, for Bitcoins the percentage change in price from 31 July 2017 to 31 August 2017 was + 65,8 % in comparison to – 9,3 % over the same period in 2018 (Available at Coindesk.com – https://www.coindesk.com/). ↩
- 7 Also due to the re-categorisation of retail clients as professional clients on request or active retail clients that may have moved their account to third country providers. ↩
- 8 In August 2018, the negative balance protection was in force. However, market gapping can lead to the client initially being closed out at a price that creates negative equity, with the account then re-credited back to zero equity by the provider to meet the new requirement of negative balance protection. This was also the case for those providers that offered negative balance protection in August 2017. ↩