Saxo Bank Review

May 18, 2020 08:22 PM ET
Saxo Bank Review

Review Summary 

Saxo Bank is a world renowned Danish investment bank, operating since 1992. It has now expanded to provide online trading and investments to users around the globe. The company is regulated by both the FCA in the UK and the Danish Financial Services Agency or FSA. Because it is a global provider, its subsidiaries are regulated by separate legal bodies around the world. 

Saxo Bank

RATING

7

YEAR FOUNDED

1992

LOCATION

Denmark

REGULATION

FSA(Denmark
FCA(UK)
MAS(Singapore)
FINMA(Switzerland)
SFC(Hongkong)
ASIC(Australia)

US AVAILABLE

No

TRADING INSTRUMENTS

Forex, Stocks, Commodities, Shares, Metals, indices, Energies, Options, Bonds, ETFs, CFDs,Cryptocurrencies

TRADING PLATFORMS

Saxo TraderGo, Saxo Trader PRO, FIX API, Web, Mobile

MINIMUM DEPOSIT

$500

DEPOSIT METHODS

Wire Transfer, Credit Cards, Debit Cards

Base currencies

26

Inactivity fee

Yes

Withdrawal fee amount

$0

Max. Leverage

1:66

Min. Spread

0.1 pips

Currency pairs

182

Demo account

Yes

Social / Copy trading

No

 

Saxo Bank Pros and Cons

Pros

Cons

  • Regulated in Several Jurisdictions
  • Does not Accept Clients from the USA
  • Provides Access to over 42000 trading instruments
  • Does not Accept Online Payment Methods
  • Provides Team of Analysts Called SaxoStrats
  • Does not Support MetaTrader 4 Platform

 

Saxo Bank In-Depth Review

Saxo Bank owns Saxo Capital Markets that provides trading services under the name of Saxo Markets. As mentioned before, Saxo Bank was established in 1992 in Denmark. Over time it has expanded its offices to various locations such as UK, Australia, Singapore, France, Hong Kong, Japan, Switzerland etc. Overall, the Saxo brand offers over 40000 trading instruments, spread across different asset classes such as stocks, forex, commodities, ETFs, Bonds, Futures, and Vanilla options. It indicates that it has amassed over $17 billion in deposits from clients from around 170 countries worldwide.

Saxo Bank provides its clients with several proprietary trading platforms to work on, all of which are fast, sophisticated and efficient. They draw their liquidity from 15 banks and 85 exchanges, which in turn ensures multi asset liquidity. Additionally, Saxo Bank states that it acts as market makers to all financial products which are not traded on an exchange.  

Regulations: As Saxo Bank offers its services across multiple jurisdictions spread across numerous nations, it complies with various international-grade directives and regulations. The different entities under Saxo Bank and the regulatory bodies they fall under are mentioned in brief below. 

Legal Entity

Regulator

Country or Jurisdiction

Saxo Capital Markets UK

Financial Conduct Authority

UK 

Saxo Bank [SW]

Swiss Federal Banking Commission`

Switzerland

Saxo Banque [FR] SAS

Bank of France

France

Saxo Capital Markets Pte Ltd

Monetary Authority of Singapore

Singapore

BG Saxo

Commissione Nazionale per le Società e la Borsa (CONSOB)

Italy

Saxo Capital Markets HK

Securities and Futures Commission in Hong Kong

Hong Kong`

Saxo Bank FX. K.K

Japanese Financial Services Agency

Japan

Saxo Capital Markets (AU) pty. Ltd

Australian Securities and Investment Commission 

Australia

 

Account Types and Opening

Saxo Bank offers a range of different account options to users based on their individual preferences and the user’s capital. There are three broad types of accounts available, which are explained in brief below. 

  • Classic Account: The Classic Account has a minimum deposit requirement of £500 for clients based in the UK. However, for international clients, the minimum deposit is $10000. Additionally, clients from Australia are required to have  a minimum opening balance of AUD 3000.

  • Platinum Accounts: Platinum Accounts offer 30% lower prices as compared to the classic account. The minimum opening balance requirement is £50000 for clients based in the UK, AUD 50000 for Australian clients, and $200,000 for international clients. 

  • VIP Account: The VIP Account is considered as offering the best price, services and priority customer support in local languages. VIP Account holders are entitled to one on one access to SaxoStrats(Saxo Bank’s team of analysts), as well as exclusive access to various Saxo Bank events. The minimum account opening balance is fixed at 1 million USD/AUD/GBP

  • Professional Account: Besides the above three classes of accounts, Saxo Bank also offers professional accounts exclusively to financial experts, high volume traders or other high net individuals. Users have to meet the above criteria to open such an account. VIP account holders have access to higher leverages up to 1:66. 

How to open an Account at Saxo Bank?

The account opening procedure at Saxo Bank is simple and fully digital. Users can click on the “open Account” tab on the homepage and will then be redirected to an online registration form. The full registration process takes somewhere between ten to fifteen minutes. However, the period for verification may take longer (upto 2 business days).

The process consists of three steps, namely, the Online application, the approval process and Funding. Users are required to verify their identity and place of residence by providing documents for proof of identity(national ID card or passport) and a proof of residency( bank/tax statement).

After the user’s account has been approved, he/she can proceed to fund the account and start their trading experience. The process of funding can take anywhere between one to 5 business days, depending on the user’s country of operations, as well as the method chosen. 

How to open an Account at Saxo Bank

Deposits and Withdrawals

Saxo Bank provides multiple options when it comes to deposits and withdrawals. They do not charge any additional fee. However, as compared with other brokers, Saxo Bank does not provide any methods through online payment processors such as PayPal or Skrill, which may be seen as a disadvantage.

Users can choose from 26 base currencies such as CNH, CZK, DKK, EUR, GBP, HKD, HUF, ILS, JPY, LTL, MXN, MYR, NOK, NZD, PLN, RON, RUB, SEK, SGD , TRY, USD and ZAR. Compared to other brokers, the choices are immense. Giving users the option of choosing their own base currencies can be beneficial for them as they can avoid high currency conversion fees. Saxo Bank prohibits third party transfers.

Methods

  • Bank Cards: Each Saxo Bank client can use upto 3 bank cards during deposits. The total limit for each transaction is $100,000. Visa, Mastercard and Visa Electron are all accepted. 

  • Bank Wire Transfers:  At Saxo Bank, the initial account funding made by any user must be made using bank transfers. Additionally, withdrawals can only be made using bank transfers.  It usually takes up to 2-7 days for a bank transfer to get processed. 

  • Securities Transfer:  Users can conduct collateral trading on Saxo markets, by transferring their stock portfolio to them. Securities can also be transferred from other brokers to Saxo on request. 

Commissions and Fees

When compared to other brokers, Saxo Bank charges average fees overall. Fees for mutual funds, forex and stock index CFDs are considered low. There are also other non-trading fees that are charged, which will be discussed later. 

Trading Fees

Saxo Bank provides a fee structure that is transparent, allowing users to easily calculate costs. It differs among different account types. Both the platinum and the VIP accounts offer more favourable pricing than the classic account. However, for the purpose of this review, we shall discuss the fee structure of the classic account. 

  • Fees for Forex: Saxo Bank charges low fees for forex trading as compared with some of the other brokers in the market. For a $20000 worth long position with a 30:1 leverage applied, the forex benchmark fees for different currency pairs are mentioned below. 

    • EUR/CHF : $4.6

    • EUR/GBP: $10.2

    • EUR/USD: $15.5

    • GBP/USD: $12.8

    • AUD/USD: $13.7

  • Fees for Stocks and ETFs: The fees for ETFs and stocks are considered lower than some brokers. The commissions for a trade worth $2000 for the following stocks and ETFs are mentioned below. 

    • UK Stock: $9.6

    • US Stock: $10.0

    • German Stock: $11.0

The above fee structure is based on volume. However, there is a minimum fee involved as well. The fees for stock trading can also vary depending on the countries of operation. Some examples have been provided below. 

    • NASDAQ, NYSE, ARCA, AMEX: $0.02 per share 

    • TSX venture Exchange, Toronto Stock Exchange: CAD 0.03 per share 

    • London Stock Exchange: 0.10 %

    • Warsaw Stock Exchange: 0.30%

  • Fees for Mutual Funds: Fees for mutual funds at Saxo is also considered low. The brokerage itself doesn’t charge the user any fee when they trade with mutual funds. However, there may be some maintenance fee that is charged on an annual basis. These are not charged by the broker, but by the issuer of the mutual fund.

  • Fees for Bonds: At Saxo Bank, the fees for trading bonds are a bit higher compared to other brokers. Users are required to pay a 0.2% volume-based commission and a minimum fee of €80. For users trading a $10000 government bond, the commissions are as follows. 

    • EU government bonds: $88.0

    • US Treasury Bond: $88.0

  • Fees for CFD trading: Saxo Bank charges high fees for stock CFDs while the fees for stock index is low. For a long position worth $2000 which is held for a week, with an applied leverage of 20:1 for stock index CFDs and a 5:1 leverage on single stock CFDs, the fees are given below respectively.  

    • Europe 50 Index CFD fee: $2.1

    • S&P 500 Index CFD fee: $2.2

    • Apple CFD fee: $22.2

    • Vodafone CFD fee: $ 21.3

It should be noted that the above fees are inclusive of all the commissions, financing costs and spreads for all brokers.  The trading fees for CFD trading on stock index, forex, bonds and commodities are included inside the spread. 

  • Fees for Options: Compared to other brokers, the fees for options trading at Saxo Bank are considered High. The stock index options commission for 10 contracts are $40 for US stock index options, $36 for UK stock Options and $44 for German Stock Index options. The commission per contract can also vary depending on the currency of the underlying product, as indicated in the table below. 

Currency 

Commission Per Contract

JPY

1000

SEK

75

NOK

65

HKD

45

SGD

15

AUD

7

CAD

6

USD

4

CHF

4

EUR

4

GBP

3

 

  • Fees for Futures Trading: The fees for futures at Saxo Bank is also considered high and comparable with that of options trading. The commission for stock index futures of 10 contracts are listed as follows. 

    • German Stock Index Futures: $44.0

    • US Stock Index Futures: $40.0

    • UK Stock Index Futures: $36.0

The fees for futures are the same as that for options, with the exception of CHF. For CHF, the fee charged is 8CHF, which is double the normal rate charged for options. 

  • Transaction Fees: Card processors charge users with a transaction fee which depends on the currency being used. A 2.62% fee is charged for credit cards denominated in USD, while it is 2.24% for debit cards. 

  • Inactivity Fees: Even though Saxo Bank doesn’t charge any other non-trading fees, users are subject to an inactivity fee. This fee, of course, depends on the user’s country of residency. For instance, it's £25 for UK users who haven’t traded in the previous calendar quarter. Both ISA and SIPP accounts are exempt from this rule however.
    For non UK users, an inactivity fee of $100 is applicable after six months of inactivity. 

Trading instruments and Markets

Saxo Bank offers a wide range of trading instruments which is far greater in number than what most other brokers offer. They provide over 19000 stocks, almost 182 forex currency pairs, over 200 futures, over 1200 listed options, over 9000 CFDs, 44 Vanilla Options, over 3000 ETFs, Bonds from 26 countries in 21 currencies and several commodities.

  • Forex Trading: Saxo Bank provides almost 182 currency pairs for users to trade in. This includes major, minor and exotic pairs such as AUD/USD, USD/JPY, EUR/JPY, GBP/USD, EUR/USD etc

  • Mutual Fund Trading: Mutual funds trading is a recently added instrument class on Saxo Bank. However, they are only available in select countries such as Germany, Poland and Denmark. They work with a total of 17 fund providers including Franklin Templeton Biotechnology Discover, Janus Henderson Horizon Global Prosperity and BNY Mellon Emerging Markets Debt. 

  • Stocks and ETFs trading: Saxo Bank provides a total of 36 stock markets and 3100 ETFs, which can be traded on both smaller and major markets such as the Prague Stock Exchange, Warsaw Stock Exchange as well as several US Stock exchanges. 

  • Bonds Trading: Saxo Bank’s selection of bonds is huge, with a total of 40000.  This includes both corporate as well as government bonds. 

  • Options Trading:  Saxo Bank provides a lot of options when it comes to options trading. Users can access trading on both major and minor stock exchanges such as CBOE or Euronext as well as SEHK. There are a total of 23 Options available.  

  • CFD Trading: Saxo Bank provides a wide range of instruments for CFD trading which includes 29 stock Index CFDs, 675 ETF CFDs, 8800 Stock CFDs, 19 Commodity CFDs and 5 Bond CFDs. 

  • Cryptocurrency Trading: Saxo Bank provides cryptocurrency trading through ETN instruments. It supports ETNs, CFDs and futures for Ethereum and Bitcoin.

Trading Platforms and Tools

Saxo Bank provides several trading platforms to cater to the needs and preferences of different types of users. These are mentioned in brief below.

  • Saxo TraderPRO: Saxo Market has a proprietary premium platform called Saxo TraderPRO. The platform is equipped with the most sophisticated and essential tools required by any high volume trader. It is compatible with both MacOS and Windows devices. Some of the features of this platform are mentioned in brief below. 

    • Users can access up to 42000 instruments directly from a single multi currency account

    • Users can subscribe and view real time order executions on an exchange.

    • The platform can be set up on multiple screens (max 6) simultaneously. 

    • The platform provides order management in relation to level 2 order booking in real-time, on a subscription basis. 

    • It includes a comprehensive charting package that includes drawing tools, annotations and a multitude of technical indicators. 

    • It has an advanced trade ticket

    • Users have access to both Forex Vanilla and touch options. 

Saxo Bank Trading Platforms and Tools

 

  • Saxo TraderGO: Saxo TraderGO is another platform provided by Saxo Bank, which comprises a range of different trading tools for both trading and market analysis. The platform is compatible with both desktop (Windows PC, Linux and MAC OSX) as well as Mobile devices(iPhone and Android)
    Some of the features of this platform include:

    • 7 charts styles on 15 timeframes

    • Over 50 technical indicators

    • Proper Account Management including analysis of performance and history

    • Availability of OCO, stop limit, market, trailing stop and other advanced order management 

    • Automated signals powered by AutoChartist

    • Advanced Risk management features such as margin breakdown, cancel all orders, stop orders etc. 

Saxo Bank Trading Platforms and Tools

 

  • Saxo Open API: Saxo Banks also provide their clients a Saxo Open API, allowing them to access Saxo Bank’s market infrastructure, asset index, charts and quotes. The platform works like a normal REST API and runs on the HTTP protocol. 

Trading Tools

  • Saxo Platform Tools: The Saxo platform provides users with a selection of useful trading tools which can assist traders with their trading strategies. These include:

    • Economic calendar: This tool is a great asset for users interested in fundamental analysis. It shows important events and dates. 

    • Technical analysis and trading signals: Technical analysis and trading signals are provided by an Autochartist. These signals on over 200 trading instruments are updated on a daily basis.

    • News: The News section is provided by NewsEdge Macro and NewsEdge Corporate.

  • Saxo Select Managed Portfolios: Managed portfolios allows clients to monitor investments, having the full control of withdrawing or exiting at any time. Each Saxo Select Managed portfolio is made up of a collection of managers, investment strategies and assets. Saxo Bank has even partnered with Asset managers such as Morningstar and BlackRock to bring their users this service. Clients have the ability to choose from a list of portfolios after browsing through the details and selecting those which suit his/her assets of interest, budget, return rate, risk level etc.

  • Market Analysis: This tool provides users with updated market news, analysis and forecasts, prepared by Saxo’s team of in-house analysts called “SaxoStrats”. It can be divided into the following three sections.

    • Equities: The user is provided with expert analysis on equities from over 40 exchanges around the world. The Saxostrats provide users with cross asset correlations and technical analysis and are updated several times a week. 

    • Quarterly Outlook: This section provides users with a quarterly financial outlook for key economies and currencies. It also provides a forecast for the new quarter. 

    • Macro: This section provides information on daily macro releases and how it impacts on different instruments. This section also provides macro trading strategy ideas. 

User Experience

  • Mobile Trading: Users who want to use mobile devices for trading on the go can do so on SaxoTraderGO platform, which is available for both android and iOS devices. It is available on their respective app stores. 

Research

SaxoBank frequently schedules webinars on the platform, usually moderated and conducted by SaxoStrats. Normal seminars are also available

Education

  • Educational Resources: Saxo Bank provides educational resources such as over 20 videos discussing several topics on forex, bonds, CFDs, Equities etc. There are an additional 46 video guides on using SaxoTraderGO and Saxo TraderPro

  • Demo Account: Saxo Bank provides a free demo account for users to test the platform. Demo accounts can be a great tool for beginner traders to get a feel of a real-time trading environment without wasting any real money. Experienced traders can also use demo accounts to test out new strategies. Users can open a demo account by clicking on the “try free demo” tab on the upper-right hand side of the website. 

Customer Service

Saxo Bank’s support team works on a 24/5 basis and supports multiple languages. Users can reach them via multiple phone numbers, live chat and email. There is a support centre which contains over 250 questions and answers related to topics such as opening accounts, trading platforms, trading instruments etc. 

Safety and Security

Apart from being regulated by several International level regulatory bodies in different jurisdictions, Saxo Bank also takes great care in protecting their client’s funds. They are insured in the UK by the Financial Services Compensation Scheme or FSCS and have a membership with the Danish Guarantee Fund. 

Conclusion

Saxo Bank has an immense offering when it comes to trading instruments, and provides sophisticated trading platforms for its users. However, the fact that it does not support MetaTrader 4 or 5 may be a deterrent for some potential users. Overall, the broker excels when it comes to security, trading diversification and efficiency.


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