Capital Index Review - Is it scam or safe?

Capital Index Review - Is it scam or safe?
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 Trading Accounts

 

Account type Minimum deposit Minimum trade size Maximum leverage Avg. Spreads
Classic - 0.02 1:100 Fixed, 2 pips on EUR/USD
Advanced £100  0.02 1:200 Variable, 1.2 pips on EUR/USD
Pro £500 0.5 1:200 Variable, 0.9 pips on EUR/USD + $3.50 per lot

 

Clients of Capital Index have a choice of three main account types: Classic, Advanced and Pro. The Classic account is suitable for newbies, offering fixed spreads and micro lots for trade. The advance account is targeted at regular traders and such who are not willing to trade in high volumes. Experienced traders are offered a Pro account – the one with the tightest spreads, however Spread Trade and Spread Betting are not allowed.


What is more, Islamic accounts are also available to clients who don’t want to earn interest for religious reasons. These accounts are swap-free, offering variable spreads of 1.2 pips on EUR/USD, leverage of up to 1:200 and the minimum initial deposit is £100.


The Companies


There are two companies operating under the Capital Index brand: Capital Index (Cyprus) Limited and Capital Index (UK) Ltd. What is more, Capital Index Pty Ltd., a subsidiary of Capital Index (Cyprus) Limited operates in Australia under the trade name Capital Index Markets and is registered with ASIC. These entities form the Capital Index group, offering basically the same financial products and trading conditions.


The global online brokerage Capital Index specializes in CFDs, financial spread betting and spread trading on a range of financial instruments including foreign exchange (FX), commodities, indices and metals.


Security of Funds


Capital Index (Cyprus) Limited and Capital Index (UK) Ltd. are both duly authorized and regulated by the respective authorities. The Cyprus-based company is regulated as a Cyprus Investment Firm by the Cyprus Securities and Exchange Commission (CySEC) and Capital Index (UK) Ltd. is authorised and regulated by the Financial Conduct Authority (FCA).


Both FCA and CySEC are known as financial regulators, applying strict rules and supervision to licensed firms. To acquire a license from the UK financial watchdog, brokers have to prove their financial stability and to meet a number of requirements. For instance, clients` funds must be kept in segregated bank accounts, and regulated companies must hold a minimum of €730 000 to be considered financially stable.CySEC applies similar minimum capital requirements to Cyprus-based brokers: they are required to hold at least € 1 million.


Furthermore, both FCA and CySEC apply compensation schemes as additional guarantee to clients’ funds. FCA-regulated brokers in UK, are under the umbrella of the Financial Services Compensation Scheme, where the maximum compensation cover is £50,000 per person. Likewise, all CySEC-regulated companies are members of the Investor Compensation Fund, the fund of last resort for customers of authorized financial services firms. If any such company becomes insolvent or ceases trading, the fund is able to pay compensation to its covered clients, amounting to a maximum of 20,000 EUR.

 

Here is a list of more FCA-regulated brokers


Trading Conditions


Minimum Initial Deposit
Unlike most brokers, Capital Index does not require an initial deposit for opening a live account. In comparison, UK-based HY Markets demands $50 from its clients as a start; Forex.com, which is also FCA-regulated requires $250. So, in terms of minimum initial deposit, Capital Index gains competitive advantage.


Average Spreads & Commissions
This broker uses competitive spreads, both fixed and variable ones. Fixed ones, offered on the Classic commission-free account, amount to 2 pips on EUR/USD. Variable spreads, amounting to 0.9 pips on EUR/USD are available on the Pro account, but it also involves commission of $3.50 per lot on FX trades.


In comparison, FxPro (which is also both FCA and CySEC regulated) offers average spread of 1.4 pips on the EUR/USD for its commission-free accounts and average spreads as low as 0.4 pips on the EUR/USD for its cTrader accounts, charged $4.5 per standard lot.


Real-time spreads of 15 leading brokers may be viewed here


Maximum Leverage
Capital Index offers leverage up to 1:200, which is standard for the market, however most brokers provide higher levels in order to tempt traders by the opportunity of making striking profits on a small deposit. The reverse, however, is also true - the higher the leverage, the higher the risk of losses in excess of deposited funds.


In comparison, Cyprus-based FXTM offers 1:400 and Easy Forex 1:1000. You may look up more forex brokers offering leverage equal to or exceeding 1:500


Trading Platform


Capital Index offers the renown MetaTrader 4, delivering a wealth of information in a simple layout and, what is most important - allowing clients to automate their trades by Expert Advisors (EA) and let the program do all the work. This is one of the reasons this platform to be preferred by most traders. What is more, it offers a number of technical indicators, extensive back-testing environment and advanced charting package, including a trade-from-the-chart option. Here you may find a list of more forex brokers offering MT4 platform.


Welcome Bonus

In attempt to attract new clients, many brokers offer welcome bonuses. Capital Index provides a bonus on the first deposit ranging from 20% to 50% Up to $10 000.


Methods of Payment


Payment methods available with this broker include debit or credit card, bank transfer and Skrill. It also provides an extra withdrawal option – the Intercash Prepaid MasterCard. Here is a list of more brokers offering prepaid cards.


Conclusion


Capital Index is a well-regulated STP broker, specializing in CFDs that offers competitive trading conditions. To sum up the above, here are the advantages and disadvantages with regards to this brokerage:

 

Pros  Cons
Well-regulated (FCA & CySEC)  No choice of trading platforms
No initial deposit required  
MT4 available  
Competitive spreads offered  

 

Latest news about Capital Index
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