Often thought of as the cradle of Western civilization, Greece is a southeastern European country with a population of 10.7 million people and a gross domestic product of around US$218.2 billion for 2018.
Greece was severely affected by the 2008 global financial crisis, so much so that it was forced to seek bailouts from the International Monetary Fund (IMF) and the European Central Bank (ECB) to cope with its sovereign debts.
The local economy finally started to rebound in 2018 after a ten-year period of recession. As a member state of the European Union (EU), Greece abandoned its local currency, the drachma, in 2002 and adopted the Euro, which is managed and administered by the European Central Bank, headquartered in Frankfurt, Germany.
The Bank of Greece (est. 1927) plays an important role in the implementation of the EU monetary policy in the country. It is also tasked with ensuring the stability of the financial system in Greece and overseeing privately-owned insurance companies. This central financial institution issues EUR banknotes and handles their circulation in the country.
Despite the decade-long period of recession and high unemployment rates, the foreign exchange market in Greece is still alive, with many foreign brokers servicing customers from the cradle of democracy. The Greek Forex trading sector is closely supervised on a local level by the Hellenic Capital Market Commission (HCMC).
Greece’s Athens Stock Exchange (ATHEX) is the country’s main stock market, with a market cap of €69.3 billion as of February 2018. ATHEX operates several markets including the securities market where investors can trade in bonds, exchange-traded funds (ETFs), and stocks, among other financial instruments.
Greece Forex Legislation
Spot foreign exchange trading and contracts for difference (CFDs) are both legal in Greece and fall under the supervision of the local regulatory body, the Hellenic Capital Market Commission (HCMC).
Foreign brokers can either apply for an HCMC license or service local customers with a license issued in another member state of the European Union under the Markets in Financial Instruments Directive (MiFID).
The MiFID serves several purposes, including the standardizing the financial practices within the EU and harmonizing regulations across the member states. Some HCMC-regulated brokerage firms like the Athens-based AAAFx, for example, are part of the Athens Stock Exchange Guarantee Fund. Under this scheme, Greek traders are entitled to up to €30,000 per person in payable compensation for their losses.
The local regulator is a member of the Paris-based European Securities and Markets Authority (ESMA) and as such, operates under its auspices. The purpose of this supranational entity is to create a unified framework of financial regulations across member states of the European Union.
Therefore, many, if not all, of the regulatory guidelines established by ESMA apply in Greece as well. Forex brokers who service Greek customers are required to offer them negative balance protection. This is a safety measure that aims at protecting customers from the potential bankruptcy of the brokerages they trade with.
If a customer ends up in the red after a stop out, their account’s balance is automatically restored to zero. This policy ensures a guaranteed limit on the losses retail clients can incur, particularly when they trade in leveraged derivatives like the contracts for difference (CFDs).
Another thing worth mentioning is that there are restrictions on the maximum leverage brokers can offer to customers from Greece and the European Union as a whole. For the uninitiated, leverage essentially enables traders to “borrow” money from a broker when trading with derivatives like the CFD. This allows them to trade with more capital than they have deposited into their accounts.
For example, if a person has €1,000 available in their balance, they can spread it to €20,000 with a maximum leverage of 20:1. This allows them to significantly boost their gains when they close the position on profit. The opposite is true if the trade is unsuccessful. A retail trader will be burdened with crippling debt.
This renders trading with leverage a highly volatile venture, which is why many financial regulators worldwide have decided to impose restrictions on leveraged instruments. Under the regulations set by the ESMA, the maximum leverage permitted on major Forex pairs like the USD/GBP or EUR/USD is capped at 30:1 while that for minor pairs, major indices, and gold is restricted to 20:1.
Greek investors who trade with other commodities and non-major indices have their leverage limited to 10:1. The sharper the price movements inherent to a given instrument, the more volatile the respective market is. Because of this, the ESMA has limited the allowed leverage for individual equities to 5:1 and 2:1 for the cryptocurrency markets.
Regulated Greece brokers must also comply with certain rules pertaining to margin. In line with the ESMA regulations, brokerages must close out the open CFD positions of retail customers at 50% margin, which applies on a per-account basis.
The brokers are also expected to display the percentage of losses retail clients incur when trading with contracts for difference. ESMA has suspended all bonuses and promotions related to volume trading.
Another condition Greece and EU brokerages must comply with is to keep their customers’ money in segregated accounts and to never use them for hedging purposes. This protects the funds of traders in the unfortunate event of their brokerage filing for insolvency.
Greece Financial Regulators
The Hellenic Capital Market Commission (HCMC) is tasked with the responsibility of regulating all financial activities outside the banking sector in Greece. By contrast, the central banking institution, the Bank of Greece, has other responsibilities such as issuing EUR banknotes, ensuring the stability of the local financial system, and supervising all private banks that operate in the country.
The HCMC is an independent, self-sustaining regulatory body, funded by the fees contributed by the entities it oversees. This regulator was established back in 1995 under Law 2324. Since Greece is part of the European Union, the HCMC regulations are coordinated with the framework established by ESMA.
The Greek regulator has a very informative website, available both in the native language and English. This is the place where traders can find information about all regulated entities as well as warnings about brokerages suspected of fraudulent activities. The list of licensed brokers is updated regularly.
Under the provisions of the MiFID, trading companies licensed in member states of the European Union have the legal right to offer their services to customers from other EU countries. For example, Greek traders should feel free to join brokerages that have obtained licenses from the Cyprus Securities and Exchange Commission, abbreviated as CySEC.
CySEC was formed in 2001 and has licensed a great number of overseas retail Forex brokerages and providers of binary options. As a matter of fact, CySEC was the first financial watchdog to introduce regulations on binary options as financial instruments.
It also oversees and controls the Cyprus Stock Exchange. CySEC investment companies that violate the guidelines of the regulator face sanctions and various disciplinary penalties. The watchdog conducts regular investigations to ensure its licensees operate in compliance with the frameworks it has set.
Greece Forex Payment Methods
In line with the EU financial regulations, Greece-friendly brokers segregate their clients’ balance from their operational funds. The money is held in major financial institutions, protecting customers from broker insolvency.
Brokerages authorized to accept live-account registrations from the Hellenic Republic commonly accept payments initiated with debit or credit cards. The most broadly used cards are those by the brands Visa, Mastercard, and Maestro. Cards allow money transfers in many different currencies, although most Greek traders naturally prefer to conduct their payments in their local EUR.
Another benefit here is time-efficiency. Deposits carried out with cards are usually the quickest as they are completed either instantly or within a couple of hours in the worst-case scenario. Some of the top Greece-friendly brokerages gladly cover the costs on card deposits but this is not necessarily always the case.
We recommend Greek traders to contact the customer support staff or visit their chosen broker’s payments section for additional information on potential deposit fees. Another broadly used method by Greek customers is the bank wire transfer. You can initiate it either in person or by using the e-banking platform of locally operational banking institutions like Eurobank.
Eurobank Ergasias is one of Greece’s five major banks along with Citibank, HSBC, Alpha Bank, Piraeus Bank, and Attica Bank. It also operates in five other European countries, namely Luxembourg, the UK, Cyprus, Greece’s neighbor Bulgaria, and Serbia. The bank is compliant with the provisions of MiFID and boasts an asset volume of €64 billion. It has 730 customer service branches across Greece and abroad.
Greek traders who deposit via bank transfers may incur additional fees but these vary between banks. Payments initiated via bank wire transfers are significantly slower. Their completion requires two to three business days at best.
Some Greece-regulated brokerages like AAAFx, for example, give customers the option to deposit with cryptocurrencies like Bitcoin. The commissions, if any, are very small while deposit processing times are usually under half an hour. This renders Bitcoin a desirable payment option for many Greek traders. E-wallets like Skrill and Neteller are also listed in the banking sections of many Greece-friendly brokerages.
Popular Trading Software in Greece
The software a broker utilizes very often has a significant impact on traders’ decision whether to register there or not. Many EU-regulated brokerages develop their software in-house, so features may vary wildly across different trading sites.
The three key qualities most traders look for in a trading platform are simplicity, stability, and efficiency. The MetaTrader 4 (MT4) platform many Greece Forex brokers use ticks off all three boxes. This is a third-party trading software, created by the Russian developer MetaQuotes.
It is geared mostly toward the needs of those who trade the Forex markets. It provides traders with various tools and resources for market analysis that can significantly improve their trading performance.
There are several trading modes here – manual, algorithmic, and automated with the help of the Expert Advisors programs, developed in the MetaQuotes Language 4 (MQL4). The platform is suitable for traders of all skill levels.
It features various tools for advanced technical analysis but manages to retain its user-friendliness at the same time. The design is very user-oriented to the advantage of beginner traders. MT4 is fully compatible with iOS/Android and offers a choice from thirty or so languages, including Greek.
Traders from Greece who want to diversify their portfolios should try the newer version of the software, MetaTrader 5, which offers a larger set of financial instruments, including bonds, options, stocks, and futures.
Some brokers that service the Greek market like AAAFx, for example, offer the ZTP software by ZuluTrade in parallel with the MetaQuotes platform. ZuluTrade is browser-based and does not require any additional software downloads. The platform is equipped with several unique risk-management functionalities and has settings for customizable auto-trading. It allows for Forex and CFD trading.
It offers as many as 26 languages, has multi-lingual support, and works on all major portable devices. However, the most distinctive trait of the ZTP platform is that it offers social and copy trading. Those who use this software can follow well-versed investors and copy their trades. The platform has over 1 million users and handles trading volume that exceeds $800 billion.
Mobile Trading in Greece
Smartphones have become an inseparable part of modern life, with people using them for browsing, shopping, gaming, social interaction, and not surprisingly, trading. The smartphone frenzy is observed in Greece as well.
A 2016 survey showed that six out of ten residents of the Hellenic country own a smartphone, with almost half of the owners using their mobile devices to connect to the Internet. Another statistic on electronic device usage in the country indicates that mobile phones and smartphones are the most currently utilized type of device in Greece. This tendency is observed in the Forex circles as well, with an increasing number of investors taking their trading activities on the go.
Mobile trading enables them to keep a close watch on their positions and track the price movements at all times. Moreover, the apps offered by reputable Greece-friendly brokerages succeed in replicating the desktop experience to the notch.
You can execute orders on the fly, create watchlists and gain access to real-time quotes in most cases. The apps also make it possible for you to perform advanced technical analysis with the help of indicators and graphical objects on charts. Some Greece brokers offer downloadable apps along with a browser-based WebTraders.
1. What to watch out for when I choose a Greece-friendly Forex broker?
2. Do I necessarily have to join an HCMC-regulated brokerage if I am based in Greece?
3. Can I execute trades directly in my browser?
4. Do Greece-friendly brokers offer trading with leverage?
Yes, the vast majority of Greece brokerages support trading with leveraged products like the CFD, allowing customers to expand their trading volume way beyond their capital. Be careful with leverage, though, especially if you are a retail investor.
Trading with leverage carries significant risk, with most retail customers of Greece-friendly brokers losing their money. Before you trade with leverage, you should consider your level of knowledge and whether you can afford to incur big losses. The maximum leverage allowed under the rules set by ESMA is 30:1 for major currency pairs.