City Index Review
This is a great fit for both new and mid-level traders
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Minimum account: $0
Fees - EUR/USD 0.69 pip
The best for new and intermediate traders who wish to have access to education resources and research
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Disclosure
CFDs can be complex instruments that are subject to high leverage and have a high chance of losing money quickly. This provider loses 73% of retail investor money trading CFDs. It is important to understand the basics of CFDs and assess your ability to afford to lose your money.
The parent company of U.K. brokerage City Index is U.S.-based and publicly traded GAIN Capital Holdings Inc. CFDs, spread betting and options in forex and indexes are its specialties. This competitive and well-organized brokerage was founded in 1983. A large product selection, great platform options, and robust research facilities make it easy for traders and investors to access. This includes low-skilled retail workers as well as institutions with high-end trading infrastructures.
Overview
City Index did well in all review categories. However, there are still flaws. These include confusing and conflicting option-fee disclosures and a lack volume discounts.
Pros
Large product catalogue
Cryptocurrency coverage
The most sophisticated backtesting
Cons
No volume discounts
No social trading data
Professional accounts only can receive margin discounts
Rating of the company overall
Reliability ⭐⭐⭐⭐
Platform ⭐⭐⭐
Commissions ⭐⭐⭐
Support ⭐⭐⭐⭐
Financial instruments ⭐⭐⭐
RATING: 3.7
Trust
Financial Conduct Authority (FCA), Ref. No. 113942 and is in compliance with European Securities and Markets Authority's (ESMA) rules. These rules limit leverage and protect against negative balances (so that you don’t lose more than what you invest on the platform). According to ESMA, 73% of retail accounts lose money trading CFDs. This is roughly the average for the Eurozone. Although the U.K. Financial Services Compensation Scheme provides PS50,000 coverage for a broker default, they do not list any private or additional coverage.
City Index provides guaranteed stop-loss protection as well as sophisticated conditional orders within its trading platforms. The firm's Singapore branch uses two-factor authentication to increase security. However, this feature is not available at the U.K. website. Like most European CFD brokers the broker acts as a market maker. This raises conflict of interest issues. They offer central clearing in "certain markets", but this is a complimentary service and requires an additional client application.
Although disclosures regarding spread and fees provide a lot of transparency, it is difficult to find alternatives costs. It was difficult to compare costs and find information on fee schedules. They may offer fixed or variable spreads depending on the venue. However, cost itemization would be a great help to both parties. Spreads can also widen outside of market hours, which could lead to unanticipated trading costs.
Desktop Experience
Although the broker's Web Trader is more advanced than the downloadable AT Pro, it offers custom indicators and customizable workspaces. However, it has fewer features and less customization. AT Pro features advanced technical analysis, more than 100 indicators and detachable charts. It also allows for strong customization. Both platforms provide real-time Reuters news, which keeps account holders informed about business developments. AT Pro's historical backtesting and automated, coded trades add firepower that is rare in European brokerages. A vast array of advanced features are available in-platform, including access to many trading ideas.
Side-by-side comparisons of account types show that AT Pro is available only to professional traders (an ESMA design that requires a large industry account and industry experience). This information conflicts with other site disclosures. A chat with an agent confirmed that the software is not required for professional status.
Mobile Experience
The City Index mobile apps for iOS and Android enable easy synching between platforms. They have well-organized menus, but limited customization and less features. Account holders can create watch lists, set price alerts and chat with customer support, but the apps are not a viable alternative to the web or standalone platforms. The order interface is identical to the web and desktop programs. This allows for adequate risk management on the go.
Research Tools and Insights
City Index has created an impressive research portal with in-house analysts who provide daily market outlooks and updates via videos, webinars and tag-based news pages that are full of technical and fundamental reports. It is difficult to find the topics you are interested in due to poor integration between YouTube and website videos. However, other research material is organized well and can be accessed through trading platforms.
There are dozens of trading opportunities and ideas that use diverse market approaches, which can be found on the site and in the platform. However, some content requires paid subscriptions. Trading Central is accessible via platform research tabs. It has two sections: a customizable technical scanner and a fundamental scanner. The fundamental scanner offers a wealth of filters, and includes current prices vs. broker's calculation for fair value.
Education
The Training section contains six sections that contain written tutorials on how to trade. Only four of the six sections are open to standard course materials, while the rest duplicate marketing or research content from other sections. YouTube reviews revealed that there was an excellent collection of TA videos, but no link to the web suite. A full-featured help-and-support database is also provided by the broker.
Extra Features
GAIN Capital's City Index API is restricted to institutional partnerships and white-label partnerships. This lowers the AT Pro backtesting value and automates trading capabilities. They do not offer VPS hosting which is a missed business opportunity. There were no trading volume discounts, which discourages large-sized traders with higher skills from opening accounts. However, Premium and Professional tiers provide secondary bonuses.
Through the Omnibus Segregated Clearing account (OSCA), the broker provides central counterparty clearance on "certain market" via the Omnibus SECURITY CLEARING AC (OSCA). The broker does not have direct market access to the interbank system. However, the broker still maintains a trading desk. This involves executing trades and then transferring client's credit exposures to the central clearinghouse. Access to this account functionality requires a separate application.
Investment Products
A large product range includes FX via CFDs and spread betting, forex through MT4, CFDs and spread bets, as well as options on indexes and shares, commodities and metals, bonds and interest rates. Clients have the ability to trade more than 4,000 shares on multiple exchanges, while CFDs for indexes and metals can be traded in cash or futures. The coverage of cryptocurrency is limited to five markets.
Commissions and Fees
The minimum and average spreads for EUR/USD are competitive at 0.50 pip each. The minimum spread for S&P 500 CFDs and spread bets is 0.40. However, indexes do not have an average spread. Other markets only have minimum spreads and real-time bid/ask spreads.
Fixed spreads are offered by the broker for many commodities and indexes, and variable spreads in forex and other markets. However, it is important to read the fine print as this categorization can be confusing.
What you need to know
City Index is a great fit for traders at all levels, whether they are new or experienced. It offers excellent research, solid education and reliable customer service. Trust is built through the GAIN connection. The broker's 36-year track record and London location will inspire confidence. Professional traders and full-time traders might have to look elsewhere because of the inability to get volume discounts or weak connectivity via API and VPS interfaces.