aYondo’s reaction to ESMA’s loss percentage is priceless..

I know that’s a massive clickbait headline, but I couldn’t resist highlighting the somewhat sarcastic risk warning on ayondo’s website.

Whilst perusing through the client loss percentage report on Finance Magnates, I noticed that ayondo wasn’t featured. Which was a little odd, especially as eToro ranks as a broker that has one of the most profitable client bases. So off I trotted to ayondo’s website to take a look.

What I saw there was amazing…

(Ok, wow, I really have been browsing too much clickbait on taboola and outbrain)

It wasn’t that amazing, it was mildly drole, sarcastic and curled a jaunty grin as I imagined the compliance and marketing departments sticking two hidden fingers up at the regulators.

A little like that classic scene in Ali G – it’s on youtube if you fancy reminiscing…

I’ve always thought that adding a percentage of a particular broker’s client base that loses money to a risk warning is a little unfair.

Sure, if the broker advised in some capacity. But CFD and spread betting brokers are purely execution only, and have been for some time. In fact, they can’t even offer implied advice.

The percentage of winning or losing traders is based on all retail client accounts at a broker. This is regardless of size, experience, asset class traded, frequency, if it’s hedging, portfolio protection or strategy testing.

This loss percentage is just based on what percentage of overall accounts over the last twelve months made or lost money.

It’s a well-known fact that most derivatives traders lose money. That’s just risk. But most are tyre kickers, dreams, gamblers and with the crypto trading boom bringing new traders to the game, inexperienced.

The regulators have done a good job in introducing negative balance protection for retail traders as well as capping excessive margin rates. But for financial promotions, balance has always been key.

With individual loss percentages, you feel that the scale has slightly tipped.

Anyway, ayondo has basically gone, yeah sure, most people lose money, but most only lose less than a hundred quid…

Ayondo’s risk warning reads:

Risk Warning

CFDs and spread bets are complex instruments and come with a high risk of losing money rapidly due to leverage.

72.1% of retail investor accounts lose money when trading CFDs and spread bets with this provider.

You should consider whether you understand how CFDs and spread bets work and whether you can afford to take the high risk of losing your money

70.1% of those clients that lost money lost less than GBP100 (or currency equivalent)

Made me chuckle anyway…

You can see the loss percentage particulars on the ESMA website here.

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Richard started the Good Broker Guide in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.