EU-regulated broker vs offshore
Supervision is enforceable rules: segregated funds, leverage limits, client protection. Offshore tempts with bonuses and leverage — a red flag.
| Criterion | EU/PL broker (supervised) | Offshore broker |
|---|---|---|
| Supervision | KNF / ESMA — rules that can be enforced | A tax haven — regulation on paper, or none at all |
| Leverage limit | Retail usually 1:30 | “1:500” as the entry marketing |
| Protection | Segregated funds, client protection, complaints procedures | A withdrawal can “vanish” with no route of appeal |
| PLN (Polish złoty) deposits | Domestic transfer / SEPA | Cards, crypto, transfers from abroad |
Worked out on one example
The same position, the same market move, two leverage limits. We work out how much of the deposit one per cent of adverse movement takes.
Example assumptions
- A position of 10,000 EUR (0.10 lots) on EUR/USD, an assumed rate of 4.30 PLN per EUR.
- Leverage of 1:30 (the ESMA limit for retail) and 1:500 (the offshore offer).
- A price move of 1% against the position.
The arithmetic
- Notional value of the position 10,000 EUR × 4.30 PLN = 43,000 PLN
- Deposit at 1:30 leverage 43,000 PLN / 30 = 1,433.33 PLN
- Deposit at 1:500 leverage 43,000 PLN / 500 = 86 PLN
- Loss on a 1% move 43,000 PLN × 1% = 430 PLN
- Loss against the deposit at 1:30 430 PLN / 1,433.33 PLN = 30%
- Loss against the deposit at 1:500 430 PLN / 86 PLN = 500% — the position is liquidated
The market made the same move, and the arithmetic looks different: at 1:30 you lose 30% of the deposit, at 1:500 the whole deposit. Leverage does not change the move in price — it only changes how much of it you pay for out of your own funds.
The arithmetic rests on the assumptions stated above — it is not a forecast and not market data. Put in your own numbers: Position size calculator.
This comparison describes differences in mechanics; it does not recommend a choice. The fit depends on your horizon, capital and risk tolerance. Educational content — not investment advice.