CMC Markets Review

! Important: Spread betting and CFDs can be complex and you run the risk of losing your money quickly due to leverage. Spread betting and/or trading CFDs through this provider results in 80% loss of money for retail investors. It is important to understand the basics of spread betting and CFDs before you take on high-risk losses.

Prices

CMC Markets charges spread, which is competitive in the industry. This covers most of the trading costs. CMC Markets also makes money through spread, specifically customer trades that "cross the bid/ask spread". Next Generation does not offer guaranteed stop losses (GSLO), but they are available at an additional premium which is added to your account. If the GSLO is not activated, the cost will be refunded. When trading individual shares or ETFs, a commission fee is charged. This charge can be added to either the spread or charged directly to your account upon execution of an order. It depends on whether the spread is a CFD account or spread betting account.

Disclosure notes state that larger positions will incur higher spreads, but the details are platform-based, which obscures transparency. The minimum spreads advertised on major FX pairs are 0.7 pips (EUR/USD), USD/JPY and AUD/USD) but details are platform-based, which can obscure transparency. However, the fine print shows minor holding cost variations that could affect bottom lines. The legal disclosures state that the spreads can be different for identical instruments. Margin and overnight holding fees are competitive.

The index cost disclosures showed a much more severe five-point spread for spread bets and CFDs than the average five-point spread. This spread is charged throughout the day, even during local time in the U.S. making it unattractive trading instrument for most account holders. The industry standard is closer to the DJIA spread of 1.6 points and the Nasdaq spread of 1.0 point.

CMC does not require customers to deposit a minimum amount to open a live trading account. However, logic dictates that this amount must be within the margin requirements for the smallest trade the customer wants to place. High account balance clients are eligible to receive premium services such as higher trading leverage and a personal account manager. They also get perks (rebates or rewards), priority access and segregated accounts.

CMC charges no other fees besides an inactivity fee (or equivalent in the account’s base currency) per month for any live account that has not had any trading activity for 12 months. There is also a market data fee to certain CFD shares.

Trade Experience

Clients who are technically inclined will be pleased with the Next Generation platform for mobile, tablet, or web trading. This is in addition to MetaTrader 4, which is also available. Navigation isn't as intuitive as other platforms. This may be due to all of the features packed into this interface. Spread betting and cryptocurrency CFD trading are seamless. However, clients may find it difficult to understand the interface.

Advanced charting is possible with 115 overlays, 12 chart types and 35 drawing tools. Client sentiment can also be accessed via the streaming Reuters feed. To optimize and build complex desktop layouts, charts can be pop out. Long-term trends can be studied by clients who have access to price histories for major instruments going back 20 years. It also offers price projection and recognition tools, as well as an integrated connection to the forum for client-based traders.

Next Generation offers three order types, with the option to attach "take profit" or "stop loss" orders. The trader has the option to set an initial stoploss at execution of market orders, and then modify it to a guaranteed stoploss after execution. When filling out an order ticket for pending orders, trader has the option to choose between trailing and guaranteed options.

• Market - This is the simplest way for a trader to indicate that they want their request to be executed at market rates.

• Limit - An order that is pending and the entry is at a predetermined level below or above the current market rate, depending on whether the trader is a buyer or seller. This order can also be extended by the trader.

• Stop - An order that is pending and the entry is at a predetermined level above or below the current market rate, depending on whether the trader is a buyer or seller. This order can also be extended by the trader.

When choosing a mobile platform, clients can choose between Next Generation or MetaTrader 4 for iOS or Android. Although the app is more robust than MT4, it has fewer features than its web counterpart. Chart optimization is a key feature. Clients have the ability to create complex orders and send customized alerts via push notification or email. Although the apps allow fingerprint ID entry, this feature is not part of a 2-tier authentication process. MetaTrader 4 can be used as an add-on account or standalone option, but it is limited to CFDs only and does not have share capacity.

Next Generation doesn't have back testing capabilities. Account holders are forced to use MetaTrader 4, which is less powerful than the homegrown platform in many other ways. CMC does not offer VPS service. An API interface allows the use of sophisticated trading platforms that can support both algorithmic and automated trading. The embedded client positioning data in the proprietary software is a great feature that could have been improved if copy or social trading was available.

A wide range of offerings

CMC Markets provides clients with one of the most extensive product catalogues in the forex brokerage industry. CMC Markets advertises that clients can trade up 10,000 instruments. This opens up new opportunities for portfolio managers who are looking to invest over the long-term. These include:

• 330+ FX pairs

• 90+ Indices

• 12 Cryptocurrencies

• 9000+ shares and ETFs

• 110+ Commodities

• 50+ Treasuries

Spreads are competitively low. All financial instruments, except individual shares, have specific margin percentages. CMC's margin rates for shares start at 20% for U.K. shares and 20% for U.S shares. Different margin rates are applicable to large positions on shares depending on the tier.

Customer Service

Online brokers that don't give priority to satisfying the customer's needs in a timely and satisfactory manner are likely to fail in this digital age. CMC Markets knows this. All contact options are available, including email for prospective clients and clients, local support 24/5, comprehensive FAQs, and support libraries. The Next Generation platform also allows you to launch live chat, which is extremely convenient. The FAQs are very informative and well-organized. Chat wait times were averaged between 30 and 40 seconds for several contact attempts. To support licensing operations in other locations, the broker has 13 satellite offices located on four continents. The broker also maintained active client interactions and Twitter accounts with the most up-to-date comments.

Portfolio Analysis

Next Generation's order interface is mediocre at best. Although the order ticket can only be used to initiate basic market orders and pending orders the latter offers the additional protection of GSLO. CMC doesn't offer a trading journal or tax accounting tools.

The client selects the "pip price" and the order ticket contains the "trade value", and the "estimated marg" (only for market orders). The rate can be entered, the number of pip, and the amount traders want to take loss or gain.

Next Generation doesn't have an integrated tool to analyze trading activity like some of their competitors. This is a shame considering all the other features on the platform. However, this omission has put them in the lower ranking category for this category. All traders will find it invaluable to be able to drill down to their trading activities beyond the basic metrics.

Investigate Amenities

CMC Markets excels in this area, offering extensive analysis and research from both in-house analysts as well as third-party material that includes Morningstar quantitative equity research reports (live account only). This feature alone may be enough to convince serious traders to open CMC Markets live accounts. The website offers many resources and news can be filtered according to region or asset class. A standard economic calendar is also available on the site. One criticism would be the absence of a well-organized archive or a dedicated search function, which makes it difficult for many topics to be found.

With a few resources, the client may have to leave the platform to go to a website to improve research and news integration with trading platforms. Next Generation provides access to Reuters News (live accounts only), both technical (pattern recognition software embedded in the platform and chart forum) and fundamental (OPTO Magazine) market analysis. It also offers access to the extremely useful CMC TV service, which provides video market commentary via a platform connection to YouTube.

Security

CMC Markets is registered under 173730 with the Financial Conduct Authority (FCA). In accordance with U.K. FCA's Client Money Rules, the broker takes measures to ensure that client funds do not mix with corporate funds. CMC's assets will be protected in the event of insolvency by being held in separate accounts at regulated banks. These funds are also held in various European and U.K banks to spread risk.

Clients have additional asset protection through Financial Services Compensation Scheme (FSCS), which can protect up to PS85,000. However, there are no layers of private insurance. This is a significant oversight given CMC's extensive industry footprint. ESMA rules, which came into effect in 2018, now require negative balance protection. The broker's dealing desk acts in the first counter-party role for all CFD trades or spread bets. However, pricing is done through the platforms to reduce conflict of interest potential.

CMC's software security meets the highest industry standards. There is also two-factor authentication and biometric authentication. If the application is not being used, a timer will log the user off of the app.

Verdict

CMC Markets is a great fit for traders of all kinds. It offers a broad product range, a feature-rich platform (Next Generation), useful educational resources, and a lot of research tools.

The FCA regulation lends credibility. CMC also emphasizes account security. Clients can have peace of mind with negative balance protection. The premium for guaranteed stop-loss execution is reasonable considering the account-saving and risk management it offers in volatile market conditions. The benefits include no hidden fees and wire transfer withdrawals are free.

It is difficult to recommend a broker for higher-level accounts, as they are not eligible for active trader rebates and the API interface. Professionals and institutions will, however, find the service attractive due to its broad feature set.