CMC Markets Review: Several Instruments Offer Many New Opportunities

CMC Markets is a CFD and forex broker that has been around since 1989. It is regulated by several authorities around the world, including the UK’s Financial Conduct Authority, which is one of the best (FCA). There is also a listing for the company on the London Stock Exchange. CMC shows that it cares more about skilled traders by having separate sites for professionals and institutions. However, higher-level perks, like rebates and a free API interface for “professional” traders, are not available to retail traders. Still, all account holders can use free bank wire withdrawals, guaranteed stop-loss orders (GSLO), and other helpful features. 

CMC Markets : Website

Country of regulation: UK, Australia, Canada, New Zealand, Singapore, Germany

Trading fees class: Average

Inactivity fee charged: Yes

Withdrawal fee amount: $0

Minimum deposit: $0

Time to open an account: 1-3 days

Demo account provided: Yes

Products offered: CFDs (forex, indices, commodities, shares, ETFs, bonds, crypto – except for UK clients)

CMC Markets (CMC), founded in 1989, is a well-established, publicly listed, and well-rated U.K. forex broker that has effectively adapted to the ever-changing environment of online brokerage. CMCX is the ticker symbol on the London Stock Exchange (LSE), where the firm is listed. CMC, like many other forex brokers, does not accept U.S. clients.

“Next Generation” is a feature-rich, web-based platform that serves as CMC’s flagship product. This, together with the ubiquitous MT4 (downloadable) platform and a working mobile application, is the entirety of CMC’s consumer-facing web offerings. CMC gives traders access to a vast array of CFDs and spread betting options across several asset classes. In addition to a larger-than-usual selection of forex, commodities, indices, and individual stocks, the product roster also includes a comprehensive listing of government bonds and 14 cryptocurrency offerings (12 cryptos + 2 indices), providing an overwhelming number of potential trading opportunities for all types of traders. In addition, the broker offers dynamic, competitive spreads that expand or shrink based on trade size, and customer accounts are safeguarded against negative balance conditions.

Customer Service

In this day and age, an online broker that doesn’t put a high priority on meeting its customers’ needs quickly and to their satisfaction may be doomed to fail. CMC Markets knows this very well. There are many ways to get in touch, including email for clients and potential clients, local phone support 24 hours a day, seven days a week, and FAQ and support libraries with a lot of information. You can also start a live chat right from the Next Generation platform, which is very helpful. The FAQs have a lot of useful information and are set up well.

During several attempts to chat, the average time spent waiting was between 30 and 40 seconds. The broker also has 13 satellite offices on 4 continents to help licensed operations in other places. The Twitter and Facebook accounts were full of comments and interactions with clients that were up to date.

Products

CMC Markets has one of the largest selections of products for its clients among online forex brokerages. On the company’s website, it says that clients can trade up to 10,000 instruments. This gives them a lot of new options, especially for portfolio managers who are interested in the long term. These things are:

• More than 330 FX pairs
• More than 90 Indices
• 12 Cryptocurrencies
• More than 9000 Shares and ETFs
• More than 110 Commodities
• More than 50 Treasuries

All financial instruments, with the exception of individual shares, have fixed margin percentages, and spreads are competitively low. CMC’s share margin rates “begin at 20% on British and American equities. Depending on whatever position size tier the position comes under, different margin charges apply to big positions in shares.”

Pricing

CMC Markets’ competitive spread covers most trading fees. CMC profits on client trade that “crosses” the bid/ask spread. Next-generation accounts pay a premium for guaranteed stop losses (GSLO). If GSLO is not triggered, this amount is returned. Trading shares and ETFs incurs a commission. If your account is a CFD or spreads betting account, this may be debited to your account directly upon order execution or added to either side of the spread.

Disclosure notes say larger investments have wider spreads, but platform-based nuances obscure transparency. Advertised minimum spreads on regularly traded main FX pairings range from 0.7 pips (EUR/USD, USD/JPY, AUD/USD) to 0.9 (GBP/USD) to 1.0 (USD/CHF), but the small print discloses tiny holding cost changes that might affect bottom lines. Legal disclosures permit the two sites to exhibit different spreads for similar securities. Average margins and overnight holding costs are competitive.

The index cost disclosures revealed a significantly larger five-point S& P 500 spread for CFDs and spread bets. Most account holders don’t like that spread because it’s charged 24/7, including U.S. local time. At 1.0 and 1.6 points, the Nasdaq and DJIA spreads are closer to industry standards.

CMC does not have a minimum deposit requirement for active accounts, but logic indicates that it will be subject to the margin requirements of the customer’s smallest trade size. High-balance clients can get increased trading leverage, a personal account manager, benefits (rebates and prizes), priority access to new products, and segregated accounts.

CMC only charges a market data fee for selected CFD shares and an inactivity fee of £10 (or its equivalent in the account’s base currency) per month for live accounts with no trading activity in the last 12 months.

Trade Experience

The unique Next Generation trading platform for web, tablet, and mobile will appeal to technically savvy customers who wish to upgrade from MetaTrader 4, which is also available. However, navigating is not as straightforward as on other platforms, which may be a result of the interface’s abundance of functionality. Cryptocurrency CFD trading and spread betting are easy because they don’t need a special interface or exchange. However, large spreads may make clients less interested in trading.

The software offers comprehensive charting with 115 indicators/overlays, 12 chart styles, and 35 drawing tools, as well as fully customizable watchlists, client sentiment, and a streaming Reuters feed. In order to construct and optimize complicated desktop layouts, charts can be popped out. On key instruments, clients who wish to examine long-term patterns can access price histories dating back 20 years. The software also lets you predict prices and find patterns, and it has a built-in way to connect to the traders’ community.

Next Generation has three fundamental order types with the possibility to add “take profit” and/or “stop loss” orders. In addition, the trader can establish an initial stop loss for market orders at the time of execution and subsequently change it to a guaranteed stop loss after execution. Traders can choose guaranteed and/or trailing options for pending orders before they are executed. This is done while filling out the order ticket. 

Security

The Financial Conduct Authority (FCA) regulates CMC Markets under registration number 173730. In compliance with the U.K. FCA’s client money laws, the broker also takes precautions to ensure customer funds are not mixed with company funds. Storing client money in separate accounts at regulated banks ensures that customer assets are secured in the unlikely event that CMC goes bankrupt. In order to further diversify risk, these segregated funds are kept in a variety of British and European banks.

Clients have further asset protection of up to £85,000 through the Financial Services Compensation Scheme (FSCS), but there are no private insurance layers, which is a glaring omission considering CMC’s huge industry reach. Under ESMA guidelines that entered into effect in 2018, negative balance protection is now required. The broker’s dealing desk is the first party in all CFD transactions and spread bets. However, pricing is done automatically through the platforms, which makes it less likely that there will be a conflict of interest. 

Education

The instructional resources given by rivals pale in comparison to those provided by CMC. Lower-skilled clients can rapidly become up to speed with the help of a large trader’s library. But the technical and fundamental courses are just for beginners and don’t provide advanced education. Given the profusion of capabilities in Next Generation, a significant portion of instructional materials are simply devoted to platform and software teaching.

Along with a segment of films devoted to trading tactics. There are also accessible introductory instructions to trading the diverse range of items provided. The demand for advanced topics is met by a sizable selection of online webinars provided through a relationship with Trade With Precision, but there is no archive of earlier events.

The availability of educational resources is great overall, but the lack of a search feature makes it challenging to locate less well-known subjects and gives the sense that this part is disorganized. A good glossary is provided.

Pros and Cons

Pros Clarified

• CMC Markets provides clients with one of the widest product selections among online FX brokerages. Its website says that clients can trade up to 10,000 products, which gives them a lot of new options, especially for portfolio managers who want to invest for the long term.
• CMC Markets is regulated by the Financial Conduct Authority (FCA # 73730). Which is one of the most prominent regulatory authorities in the UK and is well-recognized internationally for ensuring that market activities are fair for consumers and companies alike. A firm’s legitimacy is significantly enhanced by the fact that it is governed by a respectable, government-backed organization. Traders understand the inherent risk of markets, but they would also prefer the peace of mind that their funds are not exposed to risks other than those they are assuming, such as counter-party risk. In order to further distribute risk, segregated customer money is stored in a variety of U.K. and European banks.
• CMC Markets prioritizes client service, which offers access to live brokers and chat assistance 24 hours a day, five days a week. Together with their educational programs, this propelled them up the ranks. Everyone who trades online needs to be able to easily get in touch with a broker.
• CMC Markets’ commitment to providing clients with superior research is commendable. comparable to the finest online FX brokerages available.
• CMC Markets offers “negative balance protection,” a feature that has become more vital for online brokers to provide. January 15, 2015, the SNB incident was most likely the impetus that shook the markets, notably the heavily leveraged retail FX market. Furthermore, CMC offers guaranteed stop losses.

Cons Clarified

• Due to legal restrictions, CMC Markets does not accept U.S. clients, preventing it from being fully regarded as a worldwide broker. This would be a red flag if the firm were not regulated by the FCA, which, together with U.S. regulatory bodies (NFA and CFTC), is usually regarded as the premier regulatory authority.
• There are differences in spreads, fees, and product offers between CMC Markets’ “Next Generation” platform and its MT4 platform. CMC’s web-based platform offers far greater capabilities than its MT4 white-label and serves as the company’s de facto main product. This would not be a problem if MT4 was not the sole downloading option.
• CMC Markets’ much higher-than-average S&P 500 spread (5 points) for CFDs and spread bets stood out among index cost disclosures.
• Algorithmic traders can only use MT4 since CMC’s Next Generation doesn’t have back-testing or automated trading features. 

Is CMC Markets A Worth Broker to Get?

CMC Markets is great for all kinds of traders because it has a wide range of products. An easy-to-use platform with lots of features (Next Generation), a lot of research tools, a lot of learning materials, and a focus on customer service.

CMC regulations and the extent to which CMC promotes account security offer credibility. Negative balance protection provides clients with peace of mind, and the fee for assured stop-loss execution is appropriate in light of the account-saving risk management it offers under turbulent market circumstances. There are no obnoxious fees, and free wire transfer withdrawals are a wonderful feature.

Due to their inability to access active trader rebates and the API interface. It is more difficult to suggest a broker to clients with intermediate and advanced accounts. With a few exceptions, like the high spread fees for some instruments (S&P 500), professionals and institutions will find the service’s feature sets to be generally appealing, making it a great match.

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Source: Investopedia