Since opening its doors in 2010, Pepperstone Group has risen to the forefront of the online brokerage industry, constructing a highly competitive and feature-rich trading site that concentrates on forex, shares, indices, metals, commodities, and even cryptocurrencies.
A modest initial deposit of 200 units in the base currency enables new traders to enter the market, while leverage ratios of up to 500:1 facilitate their participation. The company is registered with the Financial Conduct Authority (FCA #684312) and the Australian Securities and Investments Commission (ASIC #147055703) in the United Kingdom. Pepperstone, like many other forex brokers, does not accept U.S. traders.
In a sector prone to volatile periods, the separation of customer accounts and corporate cash provides an additional layer of security. There are numerous help alternatives, including chat and phone support available 24 hours a day, seven days a week, and a FAQ that includes clearly stated policies on deposits, withdrawals, and trade disputes.
Multiple desktop, mobile, and web-based platforms, an industry-standard product library, above-average instructional tools, narrow spreads, and a variety of account types all contribute to a trading experience that will appeal to both rookie and experienced traders.
KEY TAKEAWAYS
• Considered our top-rated Forex broker for trading experience.
• Pepperstone provides extremely competitive FX spreads as well as a multitude of user interfaces.
• Pepperstone does not offer guaranteed stop loss orders, and only U.K./E.U. clients have access to negative balance protection.
Who is Pepperstone for?
Pepperstone provides straightforward access to the markets, allowing clients to concentrate on the complex business of trading profitably. Pepperstone is perfectly suited for traders who desire a manageable selection of low-cost services, diverse user interface and account type options, and effective customer service. Pepperstone was named the Best Forex Broker for Trading Experience in 2020 after Investopedia’s ranking algorithm considered these characteristics.
Pros
• Low foreign exchange spreads
• Governed by FCA (U.K.)
• Provides security for U.K. client accounts
• Variety of platform services
Cons
• Website upkeep substandard
• Does not accept U.S. clients
• Limited account security for non-UK/EU customers
• There is no assured stop loss
The Pros Described
• Pepperstone advertises minimum FX spreads beginning at 1 pips with no commission for the “Standard” account and 0 pips with commission for the “Razor” account. This is a very competitive retail FX brokerage market.
• Pepperstone is regulated by the Financial Conduct Authority (FCA #684312), which is one of the primary regulatory authorities in the United Kingdom and is well regarded globally for ensuring that market practices are fair for individuals and businesses alike. A firm’s legitimacy is significantly enhanced by the fact that it is governed by a respectable government-backed organization. Traders understand the inherent risk of markets, but they want the piece of mind that their funds are not exposed to risks other than those they are taking, such as counter-party risk. Additionally, all client monies are stored at Tier 1 financial institutions.
• Pepperstone offers “negative balance protection” exclusively to clients in the United Kingdom. This is an increasingly significant service that the majority of internet brokers now provide. The 15 January 2015 SNB event was most likely the impetus that shook the markets, notably the heavily leveraged retail FX market.
• Pepperstone provides clients with the option between MetaTrader 4/5 and cTrader, a high-end system with direct liquidity-provider pricing and additional technical features such as detachable charts, backtesting, and algorithmic strategy support.
Cons Explanation
• Website upkeep leaves much to be desired. Web presence is one of the defining characteristics of an efficient firm, especially in 2020. While Pepperstone’s website has an intuitive feel, a few pages include erroneous, out-of-date, or insufficient information.
• Due to regulatory restrictions, Pepperstone does not accept U.S. clients, preventing it from being properly termed a worldwide broker. This would be a red warning if the company were not controlled by the FCA, which, along with U.S. regulatory authorities (NFA, CFTC), is usually regarded as the foremost regulatory agency.
• Pepperstone does not provide “negative balance protection” to non-UK/EU customers. This means that a client could lose more than their account balance and owe the broker money.
• Pepperstone does not provide guaranteed stop loss orders (GSLO) to clients. GSLOs safeguard the trader from market gap risk, and many brokers are ready to provide this service (for an additional fee) and assume the risk themselves.
Costs
Pepperstone’s fees are among the most competitive in the online brokerage sector. New clients may select either the “Standard” account with minimum FX spreads beginning at one pip and no commission, or the “Razor” account with minimum FX spreads beginning at zero pips and commission. All of Pepperstone’s other instruments have either straight spreads or a combination of spread and commission.
For instance, the broker may claim that the typical spread for EUR/USD on Razor is 0.13 pips, plus a charge. The average spread for a Standard account is 1.13 pips, including commissions. With an MT5 Razor account, the typical spread cost for a completed (buy & sell) €100,000 trade in euro would be 0.13 pips plus €5.23 in fee. This equates to an overall spread cost of 0.65 pip.
Although well-intentioned, the website’s attempt at transparency on their spreads is unclear (outlined in the graphic below). Assuming that the variances mentioned are errors owing to a lack of control and that there are no differences in FX spreads between MT4 and MT5, Pepperstone’s spread costs are among the lowest available in the online retail forex market.
Erroneous Pepperstone Commissions Page
Minimum account opening balance is 200 units of the base currency. Visa, MasterCard, POLi, Bank Transfer, BPay, PayPal, Skrill, Neteller, and Union Pay are among the many funding possibilities. The broker reports that “financing options are free of charge for traders in the majority of countries.” Reviewing site disclosures and frequently asked questions revealed no dormant or inactivity costs. Pepperstone apparently does not charge an inactivity fee, which is uncommon in the sector. However, there are fees associated with international bank wire withdrawals.
As is customary in the FX sector, swap fees will be assessed on overnight holdings held by clients. Pepperstone boasts that their “overnight rates are established at the benchmark regional interest rates for the underlying product plus (or minus) our 2.5% fixed charge,” which is directly applied to the client’s account.
Required margin varies based on the type of instrument being traded and is only available in the website’s “New to trading” FAQ section. By logging into the “secure client area” > “trading tools” > “calculators” > “margin calculator”, however, prospective clients can discover margin requirements for all accessible products.
A no-swap Islamic account from Pepperstone incurs administration costs after a two-day holding period.
Trade Experience
Pepperstone provides a variety of platforms to accommodate all investment and trading styles. The platforms are white-label, third-party products, as Pepperstone has avoided developing its own interface. Customers can pick between MetaTrader (MT) 4/5 and cTrader, a high-end system with direct pricing from liquidity providers and extensive technical features such as detachable charts, back-testing, and algorithmic strategy assistance. Smart Trader Tools for MT4 enhances technical capability by introducing a package of applications that aid in trade execution, market research, and market study depth.
Pepperstone’s cTrader is a streamlined trading platform that is available as a download or web interface, is stable, and is easily accessible from any web browser (Chrome, Firefox, Safari, or Internet Explorer). This platform offers a redesigned appearance and feel, trading with a single click, and full integration across desktop and mobile platforms, which enhances the trading experience for all types of traders.
Traders can set up watchlists, evaluate charts, place and monitor trades, view an instrument’s “depth-of-market,” and keep updated of future events with the market calendar on Pepperstone’s cTrader, which offers a simple and user-friendly interface. The technical analysis charts can be enlarged to fill the entire screen and include more than 70 technical indicators that can be applied to numerous time frames, ranging from tick charts to monthly charts.
Autochartist provides trading suggestions based on technical analysis patterns. The software also allows traders to automate their own tactics and engage in “copy” or “social” trading, which may be accessed via the desktop trading interface.
Pepperstone cTrader.
Pepperstone’s cTrader has four fundamental order types with the option to attach “take profit” and/or “stop loss” orders. In addition, the trader can make the stop loss a trailing stop loss, but there is no option for a guaranteed stop loss. In addition, the trader can choose whether the stop loss order will be executed at the bid or ask rate.
• Market – The simplest order in which a trader requests that their trade be completed at the current market rate.
• Limit – A pending order in which the entry price is either below or above the current market price, depending on whether the order is to buy or sell. The trader also has the option of choosing the order’s expiration time.
• Stop – A pending order in which the entry price is at a predefined level above or below the current market price, depending on whether the order is to buy or sell. The trader also has the option of choosing the order’s expiration time.
• Stop-Limit – A pending order where the entry is at a specified point above or below the current market rate, depending on whether the order is to buy or sell, but where the trader can choose the execution tolerance range. For instance, if the market gap exceeds the chosen rate and tolerance interval, this order is promptly canceled. The trader also has the option of choosing the order’s expiration time.
MT4/5 and cTrader for iOS and Android are also impressive mobile options. Tablet and iPad access is provided through cTrader Web and MT4 WebTrader, however there is no MT5 web version. All mobile versions are useful but functionally limited, which is to be expected; however, some clients may desire more advanced feature sets.
Pepperstone has also formed a partnership with Equinix to give low-latency access to the global interbank system via the Equinix Financial Exchange in New York. Through this feature, premium clients that require lightning-fast execution speeds and little pricing lag can select from a vast array of VPS alternatives.
Variety of Services
Pepperstone includes:
• 60+ FX pairings
• sixteen index CFDs
• 60+ share CFDs
• 12+ CFDs on commodities
• 5 CFDs on cryptocurrencies
• 3 CFDs on currency indexes
All instruments are available across all account types, although cryptocurrency costs are not well-documented, which is surprising given the high volatility and generally wide spreads of this category. Utilizing the MetaTrader 5 forex trading platform, Pepperstone traders can trade U.S. share CFDs. Over 60 U.S. stocks are available for CFD trading, with minimal costs starting at $0.02 per share. These CFDs allow long and short positions.
Customer Support
In addition to email help, the broker provides chat/phone service 24 hours a day, seven days a week, social media portals, and an online contact form. In addition, clients are assigned a dedicated account manager to assist them with account-specific concerns. Given that the organization advertises that it does not have a dealing desk, it follows that clients would not be able to contact the dealing desk in the event of a trading emergency. Local customers can visit the main office in Melbourne, Australia, however online assistance methods are more likely to yield prompt results. A sufficient FAQ handles the majority of questions, although its arrangement and content may be enhanced.
Education
Through a dedicated section, Pepperstone’s website provides extensive educational tools, including “Learn To Trade Forex” courses, multiple archived and live webinars, and an extensive range of trading guides. Commodity trading is also discussed in depth, along with slippage, hedging, and margin. In addition, Pepperstone highlights assistance services like as platform comparisons, platform instructions, and deposit/withdrawal procedures in this area. The website also provides conventional instructional content, such as a market lexicon and lessons on technical analysis.
Portfolio Analysis
The “Active Market Panel” on the right side of the cTrader interface provides traders with a variety of data from Pepperstone. Everything occurs in real time and includes essential data such as “margin required,” “pip value,” and “deal value” so that traders may make informed decisions.
cTrader FIX API and Portfolio Analysis from Pepperstone.
Also included in the Pepperstone-branded cTrader product is a tool for analyzing trading behavior. Using a variety of filters, a trader can assess their performance beyond the standard measures, which can be particularly valuable for newcomers to the leveraged world of online forex trading. The broker’s platform does not include tax accounting features.
Investigate Amenities
Comparable to industry standards, Pepperstone’s market research and insights connect traders to the market and augment its training materials. In addition to a “market calendar,” there are sections for “market analysis” and “market news” that provide trading-enhancing information and actionable analysis. The client is emailed daily pre-market “forex reports” prior to the commencement of each trading session.
Report about Pepperstone Forex.
The analysis section covers a wide range of issues, including politics and other notable events, while the “Daily Fix” segment analyzes market-moving events. Additionally, the broker’s Twitter account seems to be fairly active. MT4/5 and cTrader offer little research tools, but the Smart Tools add-on for MT4 mitigates this deficiency to some extent. For active traders and high-volume traders, further research with “more insights and analysis” is provided.
Security
Lloyd’s of London provides professional liability insurance to Pepperstone. The company is an Australian broker regulated by the Australian Securities and Investments Commission (ASIC) under ACN 147055703 and AFSL 414530, and the United Kingdom’s Financial Conduct Authority (FCA) under Company Number 08965105 and FRN 6812, respectively. The Australian Securities and Investments Commission (ASIC) mandates that financial services organizations “meet stringent capital requirements and create and comply with internal procedures, including risk management, personnel training, accounting, and audits.”
U.K. The Financial Services Compensation Scheme provides insurance of up to £85,000 for dealers (FSCS). National Australia Bank holds client funds in a separate account to prevent misuse. Ernst & Young conducts an independent audit of Pepperstone Group.
The trading platforms use automatic stop-out procedures to minimize negative balances, although the website notes that in turbulent market situations “losses may surpass your deposit amount.” For its U.K./EU clients, Pepperstone provides negative balance protection, as stipulated by ESMA laws that went into force in 2018. clients. Nonetheless, non-U.K./E.U. There is no negative balance protection and no guaranteed stop loss for clients. The broker has two-factor authentication (2FA), but its mobile application does not support biometric authentication.
Verdict
Pepperstone provides clients with the most comprehensive trading experience available among online forex brokers. The broker’s lightning-fast execution systems, different account kinds, competitive pricing, and several platforms (MT4 and MT5, as well as complete cTrader capability) surpass the great majority of forex brokers globally.
Being FCA-regulated enhances the firm’s reputation, however the paradox of giving negative balance protection while lacking guaranteed stop losses is a little unsettling. Inadequate website maintenance demonstrates a disregard for detail. The instructional catalog is adequate and customer service is somewhat above average.
Overall, Pepperstone provides an amazing trading experience for all types of traders, whether they are cost-conscious or technologically advanced.
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Methodology
Investopedia is committed to provide investors with objective, in-depth ratings and reviews of online brokers. Our reviews are based on a six-month evaluation of all areas of an online broker’s platform, including the user experience, the quality of trade executions, the products available on their platforms, pricing and fees, security, the mobile experience, and customer support. We built a rating scale based on our criteria and incorporated over 3,000 data points into our star-ranking system.
In addition, each broker we surveyed was required to complete a 320-point questionnaire regarding all areas of their platform that we evaluated. Many of the online brokers we investigated gave us in-office demonstrations of their platforms.
Our team of industry experts, lead by Theresa W. Carey, conducted our research and created this best-in-industry methodology for grading online investment platforms for all levels of investors. Click here for our complete methodology.
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