CMC Markets Review 2020

CMC Markets Spreads And Fees

There are no commissions when trading CFDs (except for Shares) with CMC Markets. The broker though does not publish their average spreads. Instead, they only publish their minimum spreads making it difficult to compare their spreads to other brokers.

Minimum spreads published in June 2020 including:

• Forex Trading spreads from 0.7
• Indices spreads from 1.0
• Cryptocurrencies spreads from 1.4
• Commodities spreads from 0.3
• Treasuries spreads from 2.0
• Share CFDs from 0.10% commissions

Other trading costs with CMC include:

• Holding costs
• Market data fees
• Guaranteed stop-loss charges
• Inactivity fee (monthly fee)

How CMC Fees Compare

Unlike most other brokers the lack of transparency from CMC about their average spreads makes it impossible to calculate their exact brokerage costs for CFDs or spread betting. If you’re looking to calculate brokerage on the most popular CMC Markets alternatives including Pepperstone and IG you can use the calculator below.

Calculate Your Trading Costs Below

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Trading Platforms Offerd By CMC

There are three trading platforms offered for CFD trading with CMC Markets:

1. Next Generation Standard
2. Next Generation Advanced
3. MetaTrader 4

Next Generation Platform (Standard + Advanced)

The CMC next generation platform is the primary software offered for CFD trading. The best feature of the platform is the charting package with 115+ technical indicators, 70 chart patterns and 12 built-in chart types. Traders can implement detailed technical analysis and make price movement analysis. This charting package helped it win the 2019 Investment Trends survey.

Three trading tools offered by the Next Generation trading platform include client sentiment the displays the quantity and position value for the instrument traded. The second is multiple layouts such as ‘five-minute chart layout’ to give unique insights into price movements. The third is the pattern recognition scanner which identifies and alerts traders when patterns emerge.

The Next Generation trading platform is available on:

• Desktop platform (download requirement)
• Web trading platform
• Mobile trading platform (including iOS and android app)

Our CMC  Markets review found that the CFD Trading mobile app can do basically anything you want to do on your desktop. Traders can access CMC Markets’ trading instruments, complex order and account types, account details, screeners, and charting from the Android or iPhone apps. The app is extremely intelligent. It allows clients to create their own layout, so what’s important to them is the first thing they see on the screen, creating a truly personal experience.

Whilst the iPhone app includes fingerprint security, the Android version does not. Although the app includes fingerprint security in the iPhone version, there is otherwise no added security beyond the login password. Ideally, the applications should include classical security features such as automatic sign out and verification of login from other devices. Many traders trade with an incredible amount of money, as a lack of security is quite unnerving.

Integrated into the Next Generation are multiple news and information sources. This is located within the insights section and includes Morningstar research reports incorporating ‘fair market estimates’, Reuters news and CMC TV featuring expert discussing market technical analysis. The insights section also has a market calendar and CMC Twitter feed.

MetaTrader 4

CMC Markets also offers MetaTrader 4 (MT4) which is the most popular forex trading platform. The platform’s popularity is based on its Expert Advisors (EAs) automated trading ability, social trading, technical analysis and user-friendly interface. MT4 also has advanced features for trading strategies from pattern recognition to an economic calendar. It has advanced chart types and drawing tools offering extra market insights such as customer sentiment. The online trading platform has a demo account and live account allowing uses to test trading in a simulated environment.

While CMC offers MetaTrader 4 only a limited number of instruments and functionality is offered on the forex platform as shown below. In fact, it’s recommended that the Next Generation account be selected if you want to trade with CMC but if you want MT4 then view our best MetaTrader 4 broker page.

As you can see below, the CMC platform is ranked the second-lowest out of leading brokers. This is a concern as they only offer one platform. By comparison, Pepperstone, which was voted as the broker with the best forex platform, has 7 different platforms, including the world-renowned MetaTrader 5 and cTrader. Clearly indicating customers prefer variety and reputable platforms rather than homegrown ones.

Customer Support Levels

CMC Markets has global support offered 24 hours a day, 5 days a week (no weekend support). The three main customer service channels offered are:

1. Phone Support
2. E-mail Support
3. Live Chat

Customer support is available in 9 languages

The main office that CMC Markets customer service is based out of CMC Markets UK plc, 133 Houndsditch, London. There are also 12 other offices as shown below each with their own contact number and e-mail address.

CMC Minimum Deposit

Some Forex brokers have high minimum deposit requirements. SwissQuotes has a USD$1000 minimum deposit requirement while other brokers like Price Markets, Vantage have significantly high deposits requirements too. While a minimum deposit of $200 is an industry-standard, CMC markets have $0 minimum deposit requirements.

No minimum deposits can be great if :

• You want to have a CMC account and become familiar with their features before you commit
• You want to trial the demo account
• You want to trade with very low capital

One thing to note is that even if CMC has no minimum deposit, you will still need to have enough in your CMC account to meet margin requirements when trading.

Funding Methods

CMC offers a range of funding methods including credit card/debit card, bank transfer (from most bank accounts), PayPal and electronic wallets. As mentioned earlier there are no deposit fees for any of these payment methods but an inactivity fee is charged is the account isn’t used for a month. There are $0 fees on withdrawals as well which needs to be made through the deposit methods.

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CMC Markets CFDs And Forex Pairs

The CFD account offers a plethora of instruments that can be traded from ETFs to Bitcoin as shown on the table below.

CMC Markets Leverage

The maximum allowable leverage brokers can make available are subject to regulatory requirements of a particular country or region.

In Australia, our research found that the best forex broker leverage levels permitted by the Australian Securities and Exchange Commission (ASIC) are 500:1.  While firms like OANDA only offer 100:1. CMC Markets possess a leverage rate of 500:1. Although this rate can be found in other online forex brokers, this is a highly leverage competitive when combined with the other key features of CMC.

For the United Kindom and Europe, CMC Markets use the Finance Conduct Authority (FCA).  For major currency pairs such as EUR/USD, USD/JPY and AUD/USD, leverage of 30:1 or margin of 3.3%. For minor and exotic currency pairs such as Euro/GBP, EUR/AUD and GBP/JPY, leverage of 20:1 (margin 5%) is available. These levels are the maximum permitted by the FCA and comparable with other UK forex brokers.

Leverage trading, which is also known as trading on margin, means you can make a profit if markets move in your favour. Leverage how does pose risks as you can also lose they can significantly increase your loses should the market price for the currency pair not move in your favour.

Using high forex leverage levels or margin allows traders to maximise their returns with low capital investment when they take their position.

An example of a 500:1 forex leverage strategy at work would be having $200 as underlying equity which would ultimately provide traders with $100,000 worth of funds for trading currency. Any changes in the currency pairs will amplify the losses or gains incurred which is a critical issue as explained below and must be understood when using our forex broker comparison. They also offer this same leverage for CFDs trading.

2) Guaranteed stops

The best forex brokers in Australia not only need to offer high leverage for brokers but also help forex traders manage their investment risks. CMC Markets offers Guaranteed stop losses which is a good way to protect your investment against excessive losses.

For a small fee, a guaranteed stop-loss ensures you cannot lose more than you are prepared to lose for a particular trade. This type of protection guarantees your position is closed should prices fall below your loss tolerance level as the broker will absorb any differences in the event of slippage.

Another nice feature of CMC markets offer is trailing stop-loss. A trailing stop-loss ensures stop gaps are moved when a currency pairing moves in the predicted direction leading to profits. When the currency then moves the other way by a certain amount of points the stop-loss will come into force at the more favourable price.

Risk Disclaimer

Leverage involves high risk when trading CFDs which are a complex instrument. In June 2020 CMC Markets UK posted that 78% of retail investor accounts lose money when trading on their retail investor accounts.  When opening a CMC Markets account or any CFD broker worldwide it’s important to understand risk and understand if CFD and spread betting is right for you.

CMC Regulation

CMC Markets is regulated around the world including the following:

ASIC (Australia)

CMC Markets Asia Pacific Pty Ltd has the is registered with the Australian Securities And Investment Commission with AFSL 238054. The broker is located at 300 Barangaroo Avenue, Sydney, Australia.

FCA (United Kingdom)

CMC Markets UK plc (173730) and CMC Spreadbet plc (170627) is registered with the Financial Conduct Authority. The broker is located at 133 Houndsditch, London, UK.

MAS (Singapore)

CMC Markets Singapore Pte. Ltd. is regulated by the Monetary Authority of Singapore with registration number 200605050E. They are located at CMC Singapore 9 Raffles Place, Singapore.

IIROC (Canada)

CMC Markets Canada Inc is a member of the Investment Industry Regulatory Organization of Canada. They are located at 100 Adelaide St. West, Toronto, Ontario.

FMA (New Zealand)

CMC Markets NZ Limited has the New Zealand Company Registration Number 1705324. The office is located in Auckland at 151 Queen Street.

Each regulator above has different trading experience rules from leverage, instruments offered to how segregated bank accounts are treated. These will impact the trading experience so an individual needs to understand the conditions each regulator places on complex instruments such as CFDs.

CMC Markets For The United Kingdom

If you are a CMC Markets client of the United Kingdom then it can be handy to understand the CMC Markets UK markets product as FCA regulations lead to some necessary differences than is available to clients of CMC Markets outside the United Kingdom.

The FCA regulations are required to follow guidelines set by the European Securities Markets Authority (ESMA) in their Markets in Financial Instruments Directive (MiFID). ESMA are responsible for setting trading conditions for retail traders and professional traders which brokers of European regulators have to follow.

CMC Clients in the UK can choose from 3 types of accounts. These are CFD Account for retails traders, CFD Account for professional traders and spread betting account.

CMC For Retail Traders vs Professional Account

The main thing difference to be aware of between these two accounts is the use of leverage and application of guaranteed negative balance protection.

Below compares the leverage differences for each account

The FCA require CMC to limit leverage to retail traders so they are less exposed to the risk leverage trading can bring when trading conditions go against the trader. Leverage for professional traders is more relaxed as they are considered to have the expertise and capital to manage margin risks.

To qualify for a professional account, traders will need to satisfy 2 of the following 3 requirements

It is important to be aware that with increased leverage, professional traders will no longer have guaranteed negative balance protection. This is because the expectation is professional traders understand the risks of high leverage.

Professional traders will also get access to their own account manager and priority to new CMC products.

Spread Betting – Retail and Professional Traders

Spread betting is a popular alternative option to CFD trading in the United Kingdom. Unlike in CFD where traders own contracts of the underlying instrument, spread betting means one is simply betting on the movements of the financial instruments. Spread betting can result in saving on your profits as there is no capital gains tax.

Traders who chose to spread bet have a choice of indices, forex, cryptocurrencies, commodities, treasuries & shares.

Spread betting costs are included in the spread meaning there are no commissions.

Countdowns – Professional Traders Only

Professional traders have the option of trading countdowns which is not available to retail traders. This is a method of binary trading where you have a 50/50 chance the product products price will be above or below the current level at the end of the timeframe which can range from 30 seconds to 1 hour.

27 products are available including 15 Forex pairs, selected indices and commodities such as gold, oil and silver.