The European classification of clients as retail, professional or eligible counterparty, which determines the protections, disclosures and leverage limits that apply.
Elective professional status requires meeting two of three tests, typically significant trading frequency over the past year, a portfolio above a set threshold, and relevant professional experience. The firm must assess competence, not just tick the boxes.
Opting up buys higher leverage at a real cost. Complaint routes narrow, compensation scheme access can be lost, and the firm is entitled to assume you understand the products, which changes the outcome of any later dispute.
Original diagrams for the ideas on this page. Illustrative, not real market data.
Margin and leverage. A $5,000 deposit can control a $100,000 position, which is 20:1 leverage. Because the loss is measured on the full $100,000, a 2.5% move against you halves the deposit and brings a margin call, and a 5% move uses all of it.
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