Is Hugo's Way Regulated?

Is an Unregulated Broker Safe?

Now that people know that Hugo's Way is "unregulated," they will have an important question: should they use the services of this company? There are both advantages and disadvantages of an unregulated company – more on this below. We cannot give a verdict on a company based on its regulation status. 

Hugo's Way, however, claims that it is in the process of registration. It means that it has submitted its application for a license. Hugo's Way is unregulated, but it has been quite open about it. Its website mentions that it doesn't come under any jurisdiction.

If you want to try out an unregulated trading company, you should remember that you won't have any protection. It is not always a bad thing. Read more to find out some of the lesser-known advantages of an unregulated company.

Why Should You Choose An Unregulated Broker like Hugo's Way?

Capitalizing on Bear Markets

Regulated stock markets, at times, bar traders from taking short and long positions in stocks. It is worth mentioning that such steps are necessary to avoid any crashes. The stock market is perhaps the most volatile market in the economic world. Also, the global economy has experienced quite a few financial shocks, and it does require some stringent measures to ensure that such incidents don't happen in the future.

Traders – both new and experienced ones – can also take some examples from the recent Covid-19 pandemic-induced market slowdowns. All such events make it extremely hard for people to invest money in stocks. As a result, stock markets introduce a set of rules to keep the market protected. But such regulations often make it extremely difficult for traders to trade. 

For example, because of these restrictions, many traders cannot sell their stocks when the market is down past a certain point. It should be noted that stocks follow the trends to the letter. Poor-performing stocks will go up in value in a bull market. In the same manner, even the strongest stocks will plummet if the market goes into the bear market. 

More Liberty

Hugo's Way is a foreign exchange trading company that deals in Bitcoin. It does differ from the traditionally regulated stock market in terms of the products it offers for trade. Many traders like unregulated markets because they can trade freely and go short or long at any time they find a price. The regulations say that a person cannot sell stocks they don't own. However, in forex markets, customers can sell their stock whenever they get a good price.

Regulated Forex Market

Forex trading is not easy. It is a high risk, and it is often advised that people trust those companies that have been in the field for years and have strict regulations. It brings us to the concept of a regulated broker. 

You may ask who these brokers are and what makes them relevant in the trading world. This section will have a quick look at some of the advantages that regulated stock markets provide to traders. We are mentioning this to give you a clear picture of what industry trends are. It is up to an individual trader to choose a broker close to his/her needs. However, these facts can help you understand the world of stock markets better. 

What Is A Regulated Broker?

In simple terms, these brokers usually come under the supervision of a competent authority. Financial watchdogs keep a vigilant eye on their activities, and their activities are "reviewed" to ensure that there are no discrepancies. In case of any unjustifiable actions, the companies are then asked to clear their position within the given time.

These institutions – or regulatory bodies – aim at preventing fraud – the risk of fraud in such activities is quite high. Such institutions also ensure that consumers are well-aware and that they do not get trapped in scams.

Advantages of Regulated Market

Here are a few advantages that you can enjoy in the case you opt for a regulated broker:

Transparency 

Regulated brokers are bound by the law to disclose certain terms and conditions to their clients. In this regard, transparency is their plus point. When it comes to Hugo's Way, many customers will now know that the company doesn't provide the details of its partner or the banks where traders' money is deposited. Such secrecy does make people a bit dubious.

It, however, doesn't imply that Hugo's Way is involved in unscrupulous activities. It is just that traders are not informed about how their money would be used.

Safety of Funds

The law binds regulated brokers to ensure that their funds are kept in a separate account and are not mixed with investors' funds. It is an essential rule that disallows brokers to use clients' funds for any of their firms' needs. So, if a broker goes bankrupt, the clients' money cannot be used to pay off the creditors. This money remains clients' property, and only they have the right to receive it. In the end, the money goes to investors.

Customer Support

By the law, many regulated brokers are supposed to provide 24/7 customer support to traders. Unregulated brokers normally leave customers in the lurch and take time to respond to their queries. However, this particular point doesn't apply to Hugo's Way as the company provides round-the-clock customer support. The difference is that a regulated company will be bound by the law. On the other hand, Hugo's Way's customer service will be regarded as one of the salient features of the company.

Fraud Protection

One of the reasons why many people opt for regulated brokers is that such companies are under strong vigilance of the law, which deters them from getting involved in any kind of malpractice. Such restrictions are not meant for unregulated markets, so there is always the risk that investors' money can be manipulated. People want their money to be saved and free from all kinds of risks. This feature gives extra points to regulated stock markets because people are more likely to invest with companies where their funds are protected. Also, many retired people also invest in stocks to have passive income. They will want to go with a company where they can blindly turn in their savings.

The Final Word

Hugos' Way is an unregulated broker. It means that there is no assurance that the company complies with all international standards or that its operations follow certain guidelines or policies. Of course, it is a big deal for traders and something that can shake their belief in the company. However, Hugo's Way is in the middle of getting its license – so all is not lost here. Also, there are so many "advantages" of being unregulated for a while. It is important to understand that the fact a company is unregulated doesn't imply that it is involved in any fraudulent activities. So, you can do your business with it.