Pepperstone Review
Spreads of competitive FX and a variety of trading platforms
Pepperstone Group was established in 2010 and has been a leading player in online brokerage. It is a fully-featured trading platform that focuses on commodities, forex, metals, and cryptocurrencies.
Broker: Pepperstone
Minimum deposit: none
Regulator: Australian Securities and Investments Commission (ASIC #47055703), the Financial Conduct Authority (FCA#684312) + 5 other
Year: 2010
Fees: Spread costs; overnight financing costs
Taders can select from over 1200 asset opportunities. This is supported by leverage levels up to 400:1 for retails (500:1 for pro). Pepperstone, like many forex brokers does not accept U.S. trader.
Customers accounts are kept separate from company funds. This provides additional security in an industry that can be volatile. There are many support options available, highlighted by 24/7 chat/phone support, a functional FAQ, which includes clear policies regarding deposits, withdrawals and trade disputes, as well as a functional FAQ.
A variety of desktop, mobile and web-based platforms, a standard product catalog, high-quality educational resources, tight spreads and multiple account types combine to provide a trading experience that is both enjoyable and appealing to professional traders.
Overview
This gives you the chance to work in the major global markets and execute high-speed orders.
Pros
Spreads of low FX
FCA (U.K.), ASIC (AU), DFSA (UAE) + 4
Protects U.K. client accounts
A wide range of platform offerings
Cons
Substandard website maintenance
Accepts no U.S. clients
Account protection is limited for non-U.K./E.U. clients Clients
No guaranteed stop loss.
Rating of the company overall
Reliability ⭐⭐⭐⭐
Platform ⭐⭐⭐⭐
Commissions ⭐⭐⭐⭐
Support ⭐⭐⭐⭐⭐
Financial instruments ⭐⭐⭐⭐
RATING: 4.4
Pros Explained
Pepperstone offers minimum FX spreads starting at one pip with no commission for the Standard account. Zero spread, but with commission for "Razor", accounts have a lower spread. This is a very competitive retail FX brokerage.
Pepperstone is regulated under the Financial Conduct Authority (FCA#684312), which is the U.K's main regulatory agency. It is widely regarded worldwide for its strict approach to ensuring fair market practices for individuals and businesses. A reputable, government-backed agency can help establish a firm's credibility. Although traders accept the inherent risk of trading, they want to be able to rest assured that their funds aren't exposed to other risks such as counter-party risk. All client funds are also held at Tier 1 banks.
Pepperstone does not offer "negative balance protection", but it is available to U.K. clients. This is a feature that many online brokers now offer. Most likely, the SNB Event of January 15, 2015 was the catalyst that rocked the markets, particularly the retail FX market which is highly leveraged.
Pepperstone clients have the option of MetaTrader 4/5, cTrader, Tradingview and a proprietary platform. This higher-end system offers direct liquidity-provider pricing, advanced technical features, such as detachable charts and back-testing and support for algorithmic strategies.
The Cons
There is a lot that can be done to improve website maintenance. A website is a key indicator of an efficient organization, especially for 2020. Although Pepperstone's website is intuitive, there are some pages that contain incorrect, outdated or incomplete information.
Due to US regulatory restrictions, Pepperstone is not able to accept U.S. clients. This prevents Pepperstone from being considered a global brokerage. This would be a red alert if it weren't for the fact that Pepperstone is regulated jointly by the FCA and the U.S. regulatory agencies (NFA and CFTC) which is widely considered to the most important regulatory body.
Pepperstone doesn't offer "negative balance protection", for non-U.K./E.U. clients. clients. Clients can lose more money than their account balance, and the broker could end up owing them money.
Pepperstone does NOT offer guaranteed stop-loss orders (GSLO) to anyone. GSLOs protect traders from market risk. Many brokers will offer them (for an additional fee) and take the risk.
Prices
Pepperstone's fees are extremely competitive in the online brokerage market. The "Standard" account has minimum FX spreads starting at one pip with no commission and the "Razor", account which starts from zero pips with commission. Pepperstone also offers other instruments that have straight spreads, or a combination spread and commission.
The broker claims that the average spread on Razor EUR/USD is 0.13 pip and that a commission will be added to it. All in, the average spread for Standard accounts is 1.13 pip. For a EUR100,000.00 trade (buy & sale), the average spread cost for an MT5 Razor account would be 0.13 pips plus EUR5.23 commission. This would result in a spread cost totalling 0.653 pip.
Although the website attempts transparency about its spreads, it is not well-intentioned. The graphic below shows this confusion. Pepperstone's spread costs for forex trading are among the lowest in the online retail forex market.
Pepperstone Commissions Page (w/ Errors).
To open an account there are many funding options available, based on your jurisdiction, including Visa, MasterCard and POLi, Bank Transfer and BPay. Skrill and Neteller are also available. According to the broker, "funding options for traders in most countries are free of charge." When reviewing site disclosures, FAQs, and other information, we found no inactivity or dormant fees. It appears that Pepperstone does not charge an inactivity fee. This is rare in this industry. International bank wire withdrawals are subject to fees.
Clients will be charged swap fees for overnight positions, as is standard in the FX industry. Pepperstone claims that overnight rates are determined at the benchmark regional interest rates, plus (or without) our fixed fee of 2.5%. This is charged directly to the client's accounts.
The required margin depends on the instrument traded. This information can be found only in the FAQ section of the website. Prospective clients have access to margin requirements for all products by logging in to the "secure client area", "trading tools", "calculators", and "margin calculator".
Pepperstone also offers an Islamic account with no-swap that charges administration fees after a two day holding period.
Trade Experience
Pepperstone has a wide range of platforms that will suit your trading and investment style. Pepperstone has not built a proprietary interface, so the platforms are white-label, third-party offerings. Customers have the option of MetaTrader (MT-4/5), cTrader (4/5) and TradingView which is a more advanced system that offers direct liquidity-provider pricing, advanced technical features, such as detachable charts and back-testing and support for algorithmic strategies. Smart Trader Tools for MT4 adds technical functionality by providing a suite of apps that help with market research, trade execution, and market depth analysis.
Pepperstone's cTrader, a streamlined trading platform, is available as a web-based or download interface. It is stable and accessible from all browsers (Chrome Firefox Safari Safari Internet Explorer), Firefox Safari Internet Explorer, Chrome, Firefox Safari, Safari, and Chrome. The platform features a new look, one-click trading and seamless integration across mobile and desktop platforms. This makes trading easier for all types of traders.
Pepperstone's cTrader interface is simple and intuitive. It allows traders to create watchlists and analyze charts, place trades and monitor them, access the instrument's depth-of-market, and stay informed of upcoming events using the market calendar. You can expand the technical analysis charts to full screen. They include more than 70 indicators that can be used over a variety of time frames, including tick charts and monthly charts.
Autochartist generates trade ideas using technical analysis patterns. Additionally, traders have the option to trade "copy" and "social" via the platform. They can also automate their strategies through the desktop trading platform.
Pepperstone cTrader.
Pepperstone's Pepperstone cTrader offers four order types, with the option to attach "take profit" or "stop loss" orders. The trader has the option to make the stop-loss a trailing stop-loss, but not a guaranteed one. The trader can also choose whether the stop loss order should be executed at the ask or bid rate.
Market - This is the simplest way for a trader to indicate that they want their request to be executed at market rates.
Limit - An order that is pending and the entry is at a predetermined level below or above the current market rate, depending on whether the trader is a buyer or seller. This order can also be extended by the trader.
Stop - An order that is pending and the entry is at a predetermined level above or below the current market rate, depending on whether the trader is a buyer or seller. This order can also be extended by the trader.
Stop-Limit: A pending order in which the entry is at a predetermined level above or below the current market rate, depending on whether it's buy or sell. The trader can choose the tolerance range to execute the order. This means that if the market gap exceeds the specified rate or the tolerance interval, the order will be cancelled immediately. This order can also be cancelled by the trader at any time.
Mobile options that are impressive include MT4/5, cTrader for iOS or Android. MT4 WebTrader and cTrader Web provide iPad and tablet access. However, there is no MT5 Web version. Although all mobile versions work well, they are limited in functionality. However, some customers may want more advanced features.
Pepperstone also partners with Equinix in order to offer low-latency access the global interbank system. It is centered at Equinix Financial Exchange, New York. This facility offers a variety of VPS options for high-end clients who require lightning fast execution and minimal pricing lag.
A wide range of offerings
Pepperstone offers:
100+ FX pairs
CFDs 25 Index
900+ Share CFDs
20+ commodity CFDs
20+ cryptocurrency CFDs
100+ EFT CFDs
10+ Forward CFDs
CFDs in 3 Currency Indexes
All instruments can be used in all types of accounts. However, cryptocurrency fees are not well documented due to the high volatility and wide spreads. Pepperstone traders who choose the MetaTrader 5 forex trading platform are able to trade U.S. share CFDs. CFDs can be traded in over 60 U.S. stocks, and commissions starting at USD$0.02 per shares. These CFDs allow traders to trade long or short.
Customer Service
The broker provides email support and chat support 24/5, as well as phone support. They also offer social media portals and an electronic contact form. Clients are assigned an account manager who will assist them in any account-related issues. The company does not advertise a dealing desk so clients will not be able contact them in the event of an emergency. While local clients can visit the main Melbourne office in Australia, online support options will likely provide faster results. Although the FAQ answers most questions, it could use some organization and content improvements.
Education
Pepperstone's website offers extensive educational resources. It includes tutorials on "Learn To Trade Forex", numerous live and archived webinars, as well as a list of trading guides. You will also find detailed information on commodity trading, including discussions about slippage, margin, and hedging. Pepperstone also uses this section for support options, such as platform comparisons, platform guides and deposit/withdrawal processes. You will also find standard educational content, such as a market glossary or technical analysis tutorials.
Portfolio Analysis
Pepperstone provides traders with a wealth information in the "Active Market Panel", which opens on the right sidebar of the cTrader interface. All data is available in real-time and includes information such as "margin needed," "pip price," and "trade worth" so traders can make informed decisions.
Pepperstone cTrader Portfolio Analysis and API for Pepperstone FIX API.
A tool to analyze trading activity is also included in the Pepperstone-branded cTrader offering. A variety of filters allow traders to analyze their trading activity on a deeper level than the simple metrics. This can be particularly useful for newcomers to online forex trading. The platform does not offer tax accounting tools.
Investigate Amenities
Pepperstone's market insights and market analysis are up to industry standards. They connect traders to the market, and provide educational resources. There are also sections for "market calendar" and "market information," which provide valuable information and actionable advice that can be added to trading. Clients receive daily pre-market forex reports via email prior to each trading session.
Pepperstone Forex Report.
The analysis section includes analysis on a variety of topics. A section called the "Daily Fix", provides analysis on market-moving news events. It appears that the broker's Twitter account is very active. MT4/5/cTrader offer very few research tools, but Smart Tools for MT4 partially addresses this problem. For active traders and high volume traders, additional research is available with "more insight and analysis".
Security
Pepperstone is a Lloyd's of London professional indemnity insurer. Pepperstone is an Australian-based broker. It is regulated under ACN 147055703 and ASL 414530 and by the Australian Securities and Investment Commission and the United Kingdom's Financial Conduct Authority under Company Number 08965105 and FA 684312. ASIC demands that financial service firms adhere to strict capital requirements, as well as implement and comply with internal procedures, including staff training and audits.
Under the Financial Services Compensation Scheme Protection, (FSCS), U.K. traders are entitled to protection up to PS85,000 To prevent misuse, client funds are kept in a separate account at National Australia Bank. Ernst & Young independently audits Pepperstone Group.
Trading platforms use automatic stop-out systems in order to eliminate negative balances. However, the website acknowledges that losses may exceed your deposit amount due to volatile market conditions. Pepperstone provides negative balance protection as a mandated service under ESMA rules, which were in effect in 2018 for the U.K./E.U. clients. However, non-U.K./E.U. Clients do not get negative balance protection and there is no guarantee of stop loss. Although the broker offers two-factor authentication (2FA), it does not offer biometric authentication for its mobile app.
Verdict
Pepperstone provides clients with the best trading experience available in the online forex broker community. Pepperstone's lightning fast execution, multiple account types and competitive pricing outweighs the vast majority worldwide forex brokers.
FCA regulation lends credibility to the company, but it is somewhat disconcerting that the firm does not offer guaranteed stop loss protection and negative balance protection. A lack of attention to detail is evident in the substandard maintenance of websites. The customer service is slightly better than average and the education catalog is adequate.
Pepperstone provides a great trade experience for all traders, regardless of whether they are looking for low spreads to make it affordable or advanced interface functionality.