In short
- By default, individual traders are retail clients with full ESMA protections.
- You can request elective professional status if you meet two of three MiFID II criteria.
- Professionals get higher leverage but lose key protections.
The three MiFID II criteria
To be treated as an elective professional client, you normally need to meet at least two of these:
- Trading activity: you've carried out transactions of significant size on the relevant market at an average frequency of 10 per quarter over the previous four quarters.
- Portfolio size: your financial instrument portfolio, including cash deposits, exceeds €500,000.
- Professional experience: you work or have worked in the financial sector for at least one year in a professional position requiring knowledge of the transactions envisaged.
The broker must assess your expertise, experience and knowledge, and you must confirm in writing that you understand the protections you're giving up.
What changes
| Retail client | Professional client | |
|---|---|---|
| Leverage on major FX | Up to 1:30 | Set by broker, often much higher |
| Negative balance protection | Required | Not required (some brokers still offer it) |
| 50% margin close-out | Required | Broker's own policy |
| Bonuses / incentives | Banned | May be offered |
| Investor compensation | Usually eligible | May not be eligible |
| Ombudsman access | Usually eligible | May be restricted |
Things to consider before opting up
- Higher leverage means the same price move causes a larger loss.
- Without negative balance protection, you could owe the broker money after a gap.
- Brokers sometimes promote professional status to retail clients who don't truly qualify — don't overstate your experience.
How opting up works
- You request professional treatment from your broker, usually through an online form.
- You provide evidence for at least two criteria — for example, trade history and portfolio statements, or a CV showing relevant employment.
- The broker assesses your expertise and sends a written warning listing the protections you'll lose.
- You confirm in writing that you understand the consequences.
Example: what higher leverage really means
A €5,000 account opening a €150,000 EUR/USD position:
| Retail (1:30) | Professional (e.g. 1:100) | |
|---|---|---|
| Margin required | €5,000 (whole account) | €1,500 |
| Loss on a 1% adverse move | €1,500 | €1,500 |
| Loss on a 3.3% adverse move | ≈ €5,000 (account wiped) | ≈ €5,000 (account wiped, and possibly more without negative balance protection) |
Higher leverage doesn't change how much a move costs you — it lets you open bigger positions with less margin, which is exactly how accounts get wiped out.
Who professional status suits
It's designed for genuinely experienced traders — for example, people who have worked on a trading desk or who manage large portfolios — who need flexibility retail rules don't provide. For most individuals, retail status is the right choice.
Frequently asked questions
How do I qualify as a professional client?
Under MiFID II you normally need to meet at least two of three criteria: significant trading activity, a portfolio above €500,000, or relevant experience working in the financial sector.
Can I go back to retail status?
Yes. You can ask your broker to treat you as a retail client again at any time.
Is professional status worth it?
Only if you genuinely meet the criteria and understand the risks. Higher leverage magnifies losses as well as gains.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Most 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.