CMC Markets Review
CMC Markets’ traders are offered two types of trading accounts, “Fixed Risk Account” and “Regular Account”. If you choose the fixed risk account, you will have the advantage to restrict your losses by guaranteed stops, but at the cost of an extra insurance premium for each unit traded.
CMC Markets was established in the UK in 1989 and was the first company to launch an online FX trading platform in 1996. Since then, it has evolved into one of the world’s leading online CFD, FX and financial spread betting providers. Their long history and experience have helped CMC Markets to build up an impressive level of trust among their clients, achieving a trading volume of more than 33 million trades in 2015. CMC Markets also an Australian branch that presents traders with the opportunity to trade under conditions prevalent in Australian markets. The broker has a number of subsidiary offices all around the world, including Australia, New Zealand and Canada.
CMC Markets is big on spread betting which is a tax-efficient way of trading on the price movements of almost all financial products: a number of indices, commodities, Forex, shares, currency pairs and treasuries (With spread betting, traders don’t buy or sell the underlying asset but rather place a bet on whether the price of a product will go up or down in value).
CFD trading is another area of business at CMC Markets. With CFDs, traders don’t buy or sell the underlying asset; they buy or sell a number of units, depending on whether they think a product’s price will go up or down. For every point the price moves in their favor, they gain multiples of the number of units they have bought or sold.
Spread betting and CFD trading both provide similar economic benefits for investments in shares, indices, commodities and currencies using margin. However, spread betting is usually more popular with UK residents because profits are exempt from both capital gains tax and stamp duty.
As we already mentioned, CMC Markets was one of the first companies to provide online Forex trading. There are over 340 currency pairs available to trade and there is no commission of forex trading.
What is more, in April 2016 the broker has expanded its product portfolio with the launch of a range of new binary products available on its Next Generation platform.
Regulation and safety of funds
CMC Markets is authorized and regulated by the Financial Conduct Authority in the UK in relation to the provision of CFDs and spread betting (No 173730). In relation to binary products (including Countdowns) CMC Markets is licensed and regulated by the Gambling Commission (No 42013).
Regulation by FCA actually means that clients of CMC Markets fall under the FSCS ‘investments’ claim category where the maximum compensation cover is £50,000 per person per regulated entity. Here is a list of more FCA regulated forex brokers.
Australian branch is regulated by the Australian Securities and Investment Commission (ASIC). Here is a list of more Australian forex brokers.
New Zealand branch is a licensed Derivatives Issuer and registered Financial Services Provider (FSP) regulated by the Financial Markets Authority (FMA). Here is a list of more New Zealand forex brokers.
First of all, there is no minimum deposit required to activate your account, and most brokers require such (XM – $5, HY Markets and FXCM – $50, FxPro – $500). However, you will not be able to place a bet until you have deposited some funds into your account. Also, it is important to remember that the amount of any loss for a bet may exceed your deposit and you may be required to make further payments. This is due to the fact that spread bets and CFDs are leveraged products and as such carry a high level of risk to your capital as prices may move rapidly against you.
CMC Markets offers competitive spreads starting from 0.7 pips, the typical one being 0.9 pips on EUR/USD. This is considerable lower than the typical spread that we find other brokers are quoting which is about 1.5 pips. As for CFD trading costs, traders have to pay a small commission charge for any trade executed by the broker. The commission varies from country to country but the typical rate is 0.10 % of the volume traded (and 2 cents per unit for the USA and Canada).
Margin starts from 0.20%. That means that max leverage is up to 500:1 and most brokers usually offer leverage of up to 1:200 or 1:400. For more forex brokers offering leverage of 500:1 or higher, click here.
Competitive monthly cash rebates are available for clients who trade in high volumes (from £2 to £10 per month depending on the volume and type of product traded), however the broker does not offer any bonus incentives for newbies. CMC has adopted a strategy to attract new traders entailing the usage of free high standard educational facilities and the support of exceptionally low spreads, which according to the broker provides more benefits to its customers in the long term compared to the limited short-term impact of a bonus. It makes sense.
Instead of offering a range of forex trading platforms, CMC Markets focus on their own in-house forex platform called ‘Next Generation Platform’ based on over twenty years of accumulated experience and the latest advances in mobile and on-line technology (iPhone, Android & iPad Apps). The platform provides 100% automated execution, consistent performance, optional 1-click trading, as well as reliable and highly competitive pricing. No wonder it was awarded Best Online Trading Platform at the 2013 & 2014 Shares Awards and ‘Best Trading Platform Features’ & ‘Best Mobile Trading’ by Investment Trends 2014 UK.
Additional tools available on the platform:
– Chart Pattern Recognition Scanner
– Customizable Reuters news feed
– CMC Markets Analysts’ Insights
– Price Alerts
– London Trader Network
– Market calendar
What is more, Next Generation Platform offers totally customizable trading tools and layouts and incorporates a powerful ‘Advanced charting package’, supporting features such as:
– pattern recognition capable of identifying over sixty well-known chart patterns, such as ‘head and shoulders’;
– in excess of 80 technical indicators;
– advanced chart types, such as Roint and Renko.
Established as a global market leader, CMC Markets is a reliable broker offering CFD, FX and financial spread betting at competitive spreads and costs. They have a wide range of educational materials available and an award winning proprietary trading platform, however some traders who are used to the popular MetaTrader may find this disappointing, despite the various features and customize options of the ‘Next Generation Platform’.
CMC Markets Review Conclusion
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