Until now, our DARWIN providers have had two types of MetaTrader accounts at their disposal:
1. Forex, index CFDs and commodity CFDs.
2. Stock CFDs and ETF CFDs.
Many of you have asked us about the possibility of trading all these assets from the same account in order to create multi-asset DARWINs. We know that the strength of some strategies lies in diversifying by trading several assets at the same time, but with the current structure, DARWIN providers are forced to create two different DARWINs.
It is also much more complicated for the investor to perceive the value of investing in two DARWINs simultaneously, plus they have to pay success fees separately for each of them instead of a combined fee.
Boosting trading talent and benefiting investors
The advantage from the point of view of the DARWIN provider is undeniable, although there were challenges that Darwinex had to consider in order to make the best decision.
After reviewing different options, we finally decided to allow trading with all CFD assets from the same account, with some conditions, as we will see later. We hope that this improvement will help us find more trading talent and thus, benefit DARWIN investors, and consequently everyone: traders, investors, and Darwinex.
Differences in liquidity: one of the challenges of this upgrade
There are several reasons that have led us to delay this decision, but the main one was disparity in liquidity between assets. The two groups of assets mentioned at the beginning of this post are very different. Although we have made a selection of stock CFDs with the highest volume, the fact remains that the liquidity of the less liquid stocks are clearly inferior to that of index CFDs or forex, and this difference is even greater at certain market times.
If up until this point, a DARWIN with investment capital and trading style that results in orders close to a million USD in volume from investors, has only traded forex, but then suddenly decides to take a position in a less liquid stock, it can produce an unexpected slippage for investors. We must avoid this scenario at all costs, as investors may lose confidence in the DARWIN.
The good part is that if a DARWIN is multi-asset from its inception, the slippage resulting from an increase in investment will be gradual, and consequently, the investor will already be much more aware of the slippage to expect.
Special conditions for DARWINs with 100.000 investment
Although we will allow trading in all assets from the same account, due to the reasons explained above, and as a precaution, we will evaluate new DARWINs that reach 100,000 of investment on a case-by-case basis. Those who, up to that point have demonstrated that their strategy can manage multi-asset trading well, will be allowed to continue trading in all assets. In cases where the strategy has been trading primarily forex, indices or commodity CFDs up to the time of evaluation, we will most likely, for the reasons described above, disable trading in stock and ETF CFDs.
For the same reason, DARWINs that currently have more than 100,000 invested will not be allowed to trade stock and ETF CFDs. If anyone wishes to waive this restriction, we will evaluate your request on a case-by-case basis and encourage you to contact us at firstname.lastname@example.org.
All other DARWIN providers have multi-asset trading available from MetaTrader as of today.
Thank you for taking the time to read this post and have a great trading day!
The Darwinex Team