Opening an account and passing verification
What you learn in 3 minutesThis lesson explains the word verification as it appears on a platform, and what a regulated broker in Australia must ask for before an account can be used. The aim is to know which documents are accepted, why the request is made, and how long a check can take, so that a first deposit of A$200 is not sent to an account that cannot yet receive it.
What a 20 pip move is worth on 0.10 lots
| Step | Amount | Note |
|---|---|---|
| Instrument | AUD/USD | the pair used in this example |
| Price used | 0.6640 | a round figure for the example only |
| Position size | 0.10 lots | one tenth of a standard lot |
| One pip on one standard lot | 10 units of the quote currency | 100,000 x 0.0001 |
| One pip on 0.10 lots | 1 unit of the quote currency | 10 x 0.10 |
| A 20 pip move, in the quote currency | 20 units | 1 x 20 |
| Converted to Australian dollars | A$30.12 | 20 divided by 0.6640, rounded to two places |
The broker may round the conversion, add a commission, or quote a slightly different rate at the moment the trade closes, so the final figure can differ.
The mistake people make here
The common mistake is to send money before verification is finished, then find that the deposit sits in the account but cannot be traded. A second mistake is to send a photo of a document that is cropped, blurred or past its expiry date, which returns the application to the start of the queue. A third is to assume every broker asks for the same papers, when the list varies between brokers and between countries. The safer habit is to upload clear, current documents first, wait for written confirmation that the account is open, and only then move money.Check yourself
AUD/USD is at 0.6640. What is a 15 pip move worth on 0.20 lots, in Australian dollars?
One pip on one standard lot is 10 units of the quote currency. On 0.20 lots that is 2 units per pip. A 15 pip move is 30 units. Divided by 0.6640, that is about A$45.18.
Why does a regulated broker ask for an identity document and a proof of address?
Because the regulator requires the broker to know who its clients are and where they live before the account can be used. The exact documents accepted vary between brokers and between countries.
A deposit of A$200 is sent while verification is still pending. What is the likely result?
The money may appear in the account, but trading is normally blocked until the checks are complete. The deposit is not lost, but it cannot be used yet.
In Australia
- Regulator
- ASIC
- Money used in examples
- Australian dollars, written A$
- Common payment methods
- PayID, BPAY and cards
- Documents usually requested
- Photo identification and a document showing the residential address
- Time for a check
- This varies between brokers and can range from the same day to several business days