Too good to be true?

xerxes_2

My details seem to have found their way onto a database, somewhere and every now and then I get contacted by companies all over the world with amazing investment opportunities, offering me fabulous returns.

The latest, from Mercantile Sterling Management was offering me options on the Euro. Minimum investment $5000.00. According to the sales pitch, every cent the Euro rises against the US Dollar, I make $1250.00 - surely not!

Everything I know about trading could be written on the back of a postage stamp, with space to spare, but surely, if it where that easy we'd all be doing it, rather than putting money in banks and building societies.

Is it for real?

Reaper

Do not do any dealings with any financial company not regulated by the FSA. You can search here. Needless to say Mercentile are not.

I haven't looked at their web site but some options are dangerous things, if that is indeed what they are selling. If the market goes the wrong way you could have unlimited losses!

davidjwest

If it sounds too good to be true then it usually is. There are plenty of "boiler room" type scams where companies try to offload shares to unsuspecting punters.

xerxes_2

Thanks for the FSA link Reaper - bookmarked. However, as the company is based in Singapore, not being listed their does not necessarily mean that something is amiss.

I do generally follow the rule that if it sounds too good to be true, it probably is. After all, nearly every scam going operates on the scamees (is that a word?) greed.

I wondered whether anyone had any personal experience with this company or similar operations.

antenna

4 cents down and you'r wiped out

Paul_Varjak

Just did a search on Google for "Mercantile Sterling Management". Would you believe not a single hit!

isasmurf

xerxes wrote:

However, as the company is based in Singapore, not being listed their does not necessarily mean that something is amiss.

Most "boiler room" type companies are not based in the UK for the very reason that they do not need to be regulated by the FSA if they are not based in this country.

MrZen

I have been a client of Mercantile Sterling Management for some time now and can't complain about their services, actually they have made me a relatively reasonable profit.

:rotfl:

Stonk

Such products certainly do exist. They are derivatives, and are "leveraged", which means the payoff is a multiple of the payoff of an underlying product (an exchange rate, in this case) - you win, or equally lose, money at a much faster rate than if you had invested in the underlying.

Sure, a financial product can be constructed that will pay off £X for every 1-point movement of some indicator. But it will also lose the same amount for movements in the other direction. If these people have only mentioned the upside to you, without saying anything about the risk, then they are people to keep well clear of, full stop.

As an "ordinary" investor, do not even think about buying highy leveraged products. You have to be very *very* clear about what you are buying and the risks involved. Money is made and lost quickly, and the values of products swing wildly in comparison to "normal" investments such as equities. These are for what are usually called "sophisticated" investors - i.e., lots of money, diverse portfolio, risk management strategy in place.

Paul_Varjak

Have done another Google search on this company name and there is only one 'hit' - that is this website! Very odd for company that has supposedly been around for 13 years!

You can sign-up online for an account but it asks for personal details (including Social Security number) on an insecure website!

Paul_Varjak

Here is an extract from their website:

As the largest non-bank futures commission merchant, Firstmax Trading clears millions of trades daily with efficiency in processing, accuracy in administration and speed in data handling.

Strange then, that a Google search on 'Firstmax Trading' reveals no hits at all!