CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data. *Availability subject to regulation.
Sweden’s financial services sector has a long history, with its securities exchange dating back to 1863 with the founding of the Stockholm Stock Exchange (SSE). Since 2008, the SSE has operated as part of the Nasdaq Nordic group of markets and now also uses the name Nasdaq Stockholm.
In addition to stocks and stock derivatives, the SSE also provides a listing service for a variety of fixed income products, funds, exchange traded funds and products (ETFs and ETPs), options, futures and indices. Collectively, the Nasdaq Nordic exchanges are now the 15th largest financial exchange worldwide as per the World Federation of Exchanges.
The primary narrow stock index for the SSE is the OMX Stockholm 30 Index or OMXS30 that is a freely floating, capitalisation weighted blue chip index consisting of the most actively traded stocks on the SSE. A broader index for the SSE is the OMXSCAPGI or OMX Stockholm All-Share Cap GI Index.
Forex traders should be familiar with the Swedish krona (SEK), which is the Swedish national currency. The krona is managed on a free-floating basis by Sweden’s central bank that is known as the Sveriges Riksbank. The krona is made up of 100 smaller units known as öre. Although Sweden is a member of the European Union, it has not opted to join the Eurozone and adopt the euro as its currency. The Bank for International Settlements (BIS) has ranked the krone 9th among the most actively traded currencies of 2016, composing about 2.2% of the forex turnover seen that year. However, the krona was not ranked among the most popular currencies held as reserves by central banks in 2018 according to the International Monetary Fund (IMF).
The main Swedish financial sector regulatory agency is the Finansinspektionen, the Financial Supervisory Authority of Sweden (FSA), that was established in 1991 to supervise the Swedish securities markets and its banking and insurance sectors. The agency’s mission is to promote a stable financial system and well- functioning markets with high investor confidence and consumer protection.
Sweden allows forex brokers licensed by any regulatory authority based in the EU to advertise to and offer financial services to the Swedish people. Forex trading is regulated by the FSA with its strict licensing requirements, and any FSA regulated corporate entity can offer financial services elsewhere throughout the EU.
Most online brokers who allow trading in forex or contracts for difference (CFDs) will accept clients from Sweden. However, a broker with an office in the EU will generally be preferable as : (a) they have a
reputation to uphold with European regulators ; (b) need to adhere by the strict markets in financial instruments directive (MiFID) ; and (c) having an EU based broker may facilitate solving a problem locally should a dispute arise.
If a broker based outside the EU seems preferable, they should be subject to strict regulation in their local jurisdiction and should keep their clients’ money separate from their own. Also verify if they have maintained a good reputation with their clients and have an acceptable set of services and asset classes.
The majority of online brokers provide demo accounts to clients that are funded with virtual money and that allow traders to practice, explore strategies and the broker’s trading platform. Brokers also offer funded or live accounts that require a minimum deposit to start trading with real money. Additionally, many brokers provide Islamic accounts that comply with Sharia law.
An additional consideration may be the languages in which the broker’s customer service and website are available. Virtually all online brokers support English communications, but some may also be available in Swedish. Therefore, if this is key requirement it is recommended that you inquire about language availability prior to opening an account.
Moreover, the range of available asset classes can differ considerably among online brokers. Most provide access to some type of forex trading, and CFD trading is also quite popular often having the advantage of allowing trading in a wider range of assets. Additionally, when it comes to stock trading, the Stockholm Stock Exchange (SSE) now operates as part of Nasdaq Nordic with the aim to provide fair and transparent markets in a variety of asset classes, in addition to Swedish, Danish, Icelandic and Norwegian stocks.
Note that the Nasdaq Nordic transactions are executed in Swedish krona, Danish krone, Icelandic króna and euros, depending on the stock. The seven consolidated Nordic and Baltic equity markets operating under the NASDAQ OMX umbrella, including the SSE, currently use the shared INET trading platform.
Sweden has a land area of 410,340 square kilometres and a population size of 10 million, with 85.6% living in an urban setting.
The country is also the largest of the Nordic economies and has a transparent, well developed, diversified and sophisticated market. Furthermore, according to GOV.UK, there are approximately 1,000 British companies operating in Sweden, including BP, British Airways, GlaxoSmithKline, Burberry, BAE Systems and Royal Bank of Scotland.
Sweden was ranked 12th overall for ease of doing business by the World Bank. It also received favourable rankings with respect to obtaining electricity (9th), registering a property (10th), resolving insolvency (17th), trading across borders and starting a business (both 18th).
EU countries such as Germany, Norway, Finland and Denmark remain Sweden’s top and closest trading partners, with additional trading partners including the United States and the UK. This could mean that Sweden’s trading relationship with the UK may be strained due to the pending Brexit event on October 31st, 2019.
Despite being a net exporter for most of the past 30 years, Sweden has recently been showing some trade deficits. Sweden also has a GDP of $ 538.04 billion and a moderate 45.3% trade to GDP ratio in 2017, which means its economy could be somewhat vulnerable to trade issues.
Since Sweden presently does not enjoy the currency stability provided by its membership in the Eurozone, it can experience fluctuations in its trade competitiveness as the Swedish krona floats. This can present a challenge for cross border trading. Moreover, the World Bank only ranked Sweden 85th for the ease of obtaining credit in the country, 38th place for enforcing contracts and 33rd for protecting minority investors.
In general, Sweden should offer traders and businesses a rather secure place to operate in due to membership in the European Union, despite not being privy to the currency stability of the Eurozone. Swedish financial institutions must also comply with the Markets in Financial Instruments Directive (MiFID) regulations of the EU, as well as by Swedish Finansinspektionen (FSA). Moreover, according to the World Bank, Sweden has a good overall ranking of 12th for the ease of doing business.
Therefore, traders looking for an online broker to trade through from Sweden should ensure any candidate has an adequate range of asset classes, a strong reputation with clients, a decent trading platform and is subject to strict local regulation. In addition, any reputable broker will ensure their clients’ funds are separate from their own.