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Alpari Introduces Leverage Restrictions on PAMM Accounts

Alpari, the Russia-based Forex broker, will introduce some additional restrictions on leverage for PAMM accounts, with the changes to come into force on October 14.

 
The change is actually quite simple: the leverage on all PAMM accounts with capital exceeding $100,000 will be curbed at 1:100. Until now, the broker was way more generous to PAMM account managers and the leverage for PAMM accounts with such a size of invested funds would have reached 1:200; 1:500 or even 1:1000, depending on the type of account and the aggressiveness of the account manager. 
 
What could be the rationale for such a move? My guess would be – protection of investors, given that high leverage magnifies not only the size of profits but also of eventual losses. For that matter, let's have in mind that offering a certain leverage for an individual account is one thing, while offering it for a PAMM account, which may involve hundreds of orders and greater amounts of capital, is like pushing Titanic towards the iceberg. 
 
Meanwhile, Alpari recently boasted increased use of PAMM accounts – the turnover from trading with them for the current year has already reached $146.88 billion. This is not a surprise as the Percentage Allocation Management Module is a nice way of entering the Forex market by investing a minimal sum into the hands of the more experienced traders. Given that the manager of the account is also an investor and his/her money is also at stake,  the risk of encountering a reckless manager is minimal.
 
In conclusion, let's remind you that Alpari offers three types of PAMM accounts, including two types with ECN execution: if you'd like to be a manager, you should scrutinize trading conditions and pick the account which suits you best. Investors would do a good thing if they check the rating of PAMM accounts, provided by the broker, before entrusting their money into the hands of another.
 
 

About Alpari

 
Founded in 1998, the international Alpari brand is one of the leading names in online Forex trading and was recently listed as the world's third largest broker in a 2012 report from online financial portal Forex Magnates, with an average monthly trading volume of more than 200 billion US dollars.
Alpari has earned the trust of hundreds of thousands of clients in more than 150 countries across the world, thanks in large part to its reputation for delivering high-quality products and top-notch customer support. The Alpari brand is represented in many of the world's leading centers of commerce, with offices in New York, London, Tokyo, Dubai, Frankfurt and Moscow.
TAGS: alpari  alpari forex broker  forex trading  forex leverage  pamm accounts  forex accounts  lower leverage  forex investment 

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