Is Purple Trading Regulated? Is it safe? - TU Expert review
License is the most important document you have to consider when choosing a broker. Many traders, who would like to start working with Purple Trading try to check whether it is regulated. Traders Union experts have already done that. In this article, you will learn whether Purple Trading is regulated, what regulatory authorities supervise the broker and whether it is safe to work with the company in general.
Short summary about the broker Purple Trading
Purple Trading is a Forex broker with a CySEC Cypriot regulator license that uses Straight Through Processing (STP) technology. It was registered in 2016 in Cyprus but currently has representative offices in the Czech Republic and Slovakia. Purple Trading allows clients to trade different types of CFDs and currency pairs, buy and sell real shares of Italian companies, as well as invest in ETFs.
| 💰 Account currency: | USD, EUR, GBP, CZK, PLN |
|---|---|
| 🚀 Minimum deposit: | $100 |
| ⚖️ Leverage: | Retail traders get up to 1:30; experienced retail traders get up to 1:100; and professional traders get up to 1:500 |
| 💱 Spread: | From 0.5 pips (ECN), from 1.1 pips (STP) |
| 🔧 Instruments: | Currency pairs, CFDs on stocks, indices, commodities, futures, cryptocurrencies, real Italian stocks, and ETFs |
| 💹 Margin Call / Stop Out: | 100%/50% |
Pros and cons of Purple Trading
👍 Advantages of trading with Purple Trading:
•Support for trading different asset classes.
•Available minimum deposit size.
•CySEC license and regulation by authoritative EU commissions.
•Ability to earn passive income through PAMM accounts and invest in ETFs.
•Availability of MetaTrader 4 and cTrader trading platforms.
•Tight spreads on both ECN and STP accounts.
•No deposit, withdrawal, or account maintenance fees.
👎 Disadvantages of Purple Trading:
•High leverage is available only to professional and experienced retail clients.
•The broker does not cooperate with traders living outside the European Union, as well as inside the United States, Belgium, France, Russia, Switzerland, and Gibraltar.
•There are no contests or bonuses for trading or investing in the company.
Why is it important to work with a regulated broker?
License is a document that certifies that a broker operates legally and guarantees fulfillment of its obligations to the traders. A financial license is issued by a financial regulatory authority of a country (the National Bank) or a specialized authority (for example, Securities Commission, Futures Trading Commission, etc.). It is important to choose licensed brokers for the following reasons:
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A license guarantees that the broker operates in compliance with the rules of the financial regulator that issued the document.
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In order to obtain the license, a broker must comply with certain requirements, for example, the size of the authorized capital or personnel qualification. It is simply not lucrative for scammers to comply with such requirements.
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A broker’s license provides access to real markets, and you can be sure that the quotes are real and up-to-date.
The best option is to work with a broker that holds the license of the jurisdiction, where the trader resides. You can also choose a company with a financial license of another reliable jurisdiction, for example, the U.S. or the European Union.
Is Purple Trading Regulated? Broker’s license
Security (Protection for Investors)
The Purple Trading brand is owned and operated by a Cypriot investment firm, L.F. Investment Limited, which has been granted license number 271/15 by CySEC. Purple Trading is registered with 11 other European commissions, including BaFin (145745). The company is also regulated by ESMA (European Securities and Markets Authority).
Every client of Purple Trading is insured against possible bankruptcy of the bank holding their money for up to €100,000. In addition, the company (as a CySEC license holder) is a member of the Investor Compensation Fund (ICF). For retail clients, this guarantees the payment of insurance up to €20,000 (per person) in the event of a financial collapse of L.F. Holding Investment Limited.
👍 Advantages
- Segregated accounts in major European banks are used to store customer funds
- Protection against negative balance is available for all products with leverage.
- The company’s financial activities are controlled by a Cypriot regulator and 11 European regulators.
👎 Disadvantages
- It is not possible to open a trading account without verification
- Only traders from EU countries can become clients of this broker
- Insurance protection from ICF is not available for professional traders
Brokerage fees
Broker’s regulation is the most important choice criterion. However, before you start working with the broker, it is also important to analyze its commissions and fees. TU analysts have studied the commissions and fees charged by Purple Trading, which you can see below.
Purple Trading has floating spreads on all account types. Also, ECN accounts have a commission per lot, which varies depending on the amount of the deposit. When trading currency pairs, it may be $5, $8, or $10 per lot. Stock CFD brokerage commissions are $0.02 for each American share and 0.1% of the face value of the transaction for other shares. Commissions on CFDs on futures is $10 per lot traded, and 0.25% of the transaction amount for real shares. Purple Trading does not charge deposit or withdrawal fees and offers several options for free deposits and withdrawals (mostly through banks). It is worth bearing in mind that the electronic systems Skrill and Neteller hold fees for both deposits and withdrawals. The fee for no activity on the account after 6 months is 15 EUR/USD and is charged once a quarter.
| Account type | Spread (minimum value) | Withdrawal commission |
| STP Starter | From $16 | Fees from banks and payment systems are assigned per transaction |
| STP Standard | From $16 | Same as above |
| STP Prime | From $14 | Same |
| STP VIP | From $11 | Same |
| ECN Starter | From $5 | Same |
| ECN Standard | Same as above | Same |
| ECN Prime | Same | Same |
| ECN VIP | Same | Same |
Brokers that are similar to Purple Trading
Many brokers operate legally, obtaining relevant licenses and permissions. However, when choosing a broker, it is important to compare their trading conditions. TU experts have prepared a comparative analysis of Purple Trading conditions with its closest competitors.
Comparison of Purple Trading with other Brokers
| Purple Trading | RoboForex | Pocket Option | Exness | IC Markets | XM Group | |
|---|---|---|---|---|---|---|
Trading platform |
cTrader, MetaTrader4 |
MT4, MT5, R MobileTrader, R StocksTrader, R WebTrader |
Pocket Option, MT5, MT4 |
Exness Trade App (mobile), Exness Terminal (web), MetaTrader5, MetaTrader4 |
MT4, cTrader, MT5, TradingView |
MT4, MT5, MobileTrading, XM App |
Min deposit |
$100 |
$10 |
$5 |
$10 |
$200 |
$5 |
Leverage |
From 1:1 |
From 1:1 |
From 1:1 |
From 1:1 |
From 1:1 |
From 1:1 |
Trust management |
Yes |
No |
No |
No |
No |
No |
Accrual of % on the balance |
1.00%% |
No |
No |
No |
No |
No |
Spread |
From 0.5 points |
From 0 points |
From 1.2 point |
From 1 point |
From 0 points |
From 0.6 points |
Level of margin call / stop out |
No |
No |
No |
No |
No |
No |
Execution of orders |
Market Execution, Instant Execution |
Market Execution, Instant Execution |
Market Execution |
Market Execution, Instant Execution |
Market Execution |
Market Execution |
No deposit bonus |
No |
No |
No |
No |
No |
No |
Cent accounts |
No |
Yes |
No |
No |
No |
Yes |
Purple Trading is a regulated STP broker whose conditions will suit both novice traders and professionals from European Economic Area countries.
The minimum deposit in RoboForex is $10. Leverage up to 1:2000. Traders choose RoboForex for reliability, favorable trading conditions, minimum spreads, and commission fees. The company is recommended for beginner traders and experienced investors.
Pocket Option offers a wide range of trading instruments and copy trading services. It constantly improves its service quality and expands the list of assets and trading platforms. The broker is suitable even for novice traders without significant capital due to the low initial deposit. Experienced traders who work with CFDs and binary options can also use Pocket Option’s services.
Exness broker is a trusted broker partner that is compliant with all relevant terms. Exness complies with all payment obligations and pays money earned.
IC Markets Trading Company is a great broker for scalping enthusiasts, automated trading lovers, and beginner traders.
XM Broker is a broker for professional trading. Trading conditions correspond to the average market; there are technical advantages that distinguish XM Broker from its competitors.
Conclusions
Purple Trading cannot be considered absolutely reliable. The broker operates on a license of an offshore regulator. This creates certain risks regarding security of your funds. The broker has a good reputation. However, you can work with companies with an offshore regulation only at your own risk.
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FAQ
How difficult is it to obtain a brokerage license?
The procedure for obtaining a license differs depending on the jurisdiction, but it is very difficult and expensive to get the document in a reliable jurisdiction. This is why only reliable brokers obtain licenses.
Why is it not recommended to work with offshore brokers?
Offshore brokers have to meet minimum requirements for obtaining a license and reporting, which is why often scammers get such licenses.
Can an offshore broker be reliable?
Yes, although there are not many of such brokers. There are brokers with a good reputation, but with an offshore license. You still need to be very cautious when working with such companies.
How do I check a broker’s reputation?
In order to check a broker’s reputation, you need to read user reviews. However, it is recommended to only use independent websites for that.
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Team that worked on the article
Mikhail Vnuchkov joined Traders Union as an author in 2020. He began his professional career as a journalist-observer at a small online financial publication, where he covered global economic events and discussed their impact on the segment of financial investment, including investor income. With five years of experience in finance, Mikhail joined Traders Union team, where he is in charge of forming the pool of latest news for traders, who trade stocks, cryptocurrencies, Forex instruments and fixed income.
Olga Shendetskaya has been a part of the Traders Union team as an author, editor and proofreader since 2017. Since 2020, Shendetskaya has been the assistant chief editor of the website of Traders Union, an international association of traders. She has over 10 years of experience of working with economic and financial texts. In the period of 2017-2020, Olga has worked as a journalist and editor of laftNews news agency, economic and financial news sections. At the moment, Olga is a part of the team of top industry experts involved in creation of educational articles in finance and investment, overseeing their writing and publication on the Traders Union website.