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Turbo investor suffers high losses on average, AFM calls on turbo industry to reduce risks

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In turbo trading, 68% of retail investors suffered losses in the period from 1 June 2017 to 1 July 2018. On average, investors lost €2,680. This is the outcome of a study performed by the Dutch Authority for the Financial Markets (AFM), which considers these results worrying. The AFM expects the turbo industry to assume responsibility and to reduce the risks for the retail investor.

For its study the AFM looked into the results of 3.9 million orders. Other findings are:

Turbos (also called speeders, sprinters or something else) are leveraged products. Investors use them to speculate on a decrease or increase in the price of an underlying asset such as a share, index or currency. The underlying asset is largely financed with borrowed money.

In recent years, the AFM has explicitly pointed out the risks of trading in turbos. The results of the study confirm that the risks for retail investors are high. The regulator therefore calls on the turbo industry to share solutions for these risks with the AFM. Solutions can be send to [email protected] until 30 April 2020 at the latest. Parties can indicate whether they agree to the (anonymous) publication of their proposed solution(s).

In the second half of 2020, the AFM will decide on its follow-up approach regarding the risks involved in trading turbos.

Members of the press can call Yolanda Bieckmann, AFM Spokesperson, on 0031(0)6-3177 7686 or e-mail her at [email protected].

Regulator Information

Abbreviation: AFM
Jurisdiction: Netherlands

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