CMC Markets and Pepperstone are very different forex brokers. CMC offers a large range of CFDs including 300+ currency pairs, 12 cryptocurrencies and 9000+ Shares. Pepperstone has fewer CFDs but offers 2 account types, tighter ECN style spreads, choice of trading platforms and social trading tools.
CMC Markets and Pepperstone offer very different services and features, as a result, each broker is best for different forex traders. We have broken our comparison down into the key features that will be relevant for most forex traders including:
CMC Markets and Pepperstone are top online brokers facilitating forex trading for retail investors around the world. With top-tier liquidity providers, both brokers can offer customers’ competitive spreads on a range of forex pairs. While Pepperstone offers over 61 currency pairs choose from, CMC Markets provides some of the greatest market access available to retail investors with over 330 fx pairs included in their product range.
When trading with CMC Markets, customers pay a fixed spread that is inclusive of commission, while Pepperstone clients can choose between a commission-free spread or ECN-like pricing structure. As commission fees are discussed below in the ‘Account Type’ comparison, we will compare forex costs by looking at the two brokers’ commission-free spreads shown in the table below as well as Pepperstone’s Razor ECN-type spreads.
Data taken from broker website. Accurate as at 02/04/2021
When comparing the commission-free spreads offered by the two brokers, Pepperstone offers more competitive spreads than CMC Markets for the majority of currency pairs listed below. For instance, when trading the EUR/USD, Pepperstone clients gain access to average spreads of 1.13, while CMC’s average spreads for the forex pair are 1.20. Likewise, the Australian Dollar vs United States Dollar averages 1.14 pips with Pepperstone, and 1.40 pips with CMC. While Pepperstone offers the tighter spreads, there is parity between with the United States Dollar vs Japanese Yen, with average spreads of 1.20 pips for both brokers.
While CMC Markets does not offer customers a ECN-style pricing structure, Pepperstone’s Razor accounts allow traders to access institutional grade spreads with ultra-fast execution and low commission fees. For AUD/USD, EUR/JPY, USD/JPY, and USD/CAD currency pairs, Pepperstone offers some of the tightest spreads available to retail investor accounts, with spreads ranging from 0.13-0.27 pips. For the commonly traded EUR/USD currency pair, Pepperstone’s average spread is 0.13 pips, only slightly wider than competing online brokers such as IC Markets and FP Markets.
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Pepperstone clients holding open positions for longer than a day will be charged swap rates. The swap rate, aka rollover interest rate, varies with each currency pair and is heavily influenced by interest rate differentials in addition to current market conditions. As with Pepperstone, CMC Markets charges a holding fee for fx positions that is based on interest rate differentials of the forex pair being traded. To calculate holding rates, the following formula can be used:
A Guaranteed Stop-Loss Order is a standard Stop-Loss order, with the difference being the broker guarantees the trade will be closed out at a specified price, regardless of the level of volatility in the market.
GSLO requirements and charges depend on the jurisdiction the broker is operating in. For instance, the FCA (Financial Conduct Authority, UK) requires all brokers to attach GSLO’s to trades as a form of investor protection. On the other hand, ASIC (Australian Securities and Investments Commission) offers investors protection through an automatic stop-loss and call margin system. Due to the differing GSLO requirements around the globe, some brokers such as Pepperstone AU do not offer GSLO’s for a premium, yet the brokers UK clients will have GSLO’s attached to all their trades inline with FSA legislation.
Unlike Pepperstone, CMC Markets allows traders to buy GSLO’s for a premium, with fees varying depending on the financial instrument being traded. For example, if an investor was trading €50,000 worth of the EUR/USD currency pair, they can pay AUD $5.28 to attach a GSLO to the trade. If the order is not closed out at the price specified in the GSLO, CMC Markets will refund the premium in full.
While trading fees vary with financial instruments and locations, it is evident that Pepperstone’s spreads are much more competitive than CMC Markets. When traders’ sign up to a Razor account type, Pepperstone clients will gain access to spreads on forex pairs that average 0.13 pips for the EUR/USD forex pair. When CMC and Pepperstone’s commission-free standard account types are compared, Pepperstone is once again the winner with tighter spreads.
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When trading with CMC Markets, traders are limited to one account type. The brokers CFD Account includes commission fees in the spread and offers minimum spreads of 0.7 pips on the EUR/USD currency pair, with spreads on other fx pairs as low as 0.3 pips.
On the other hand, Pepperstone offers clients two account structures that have different commission charges. For those wanting to trade in an ECN-like environment with spreads as low as 0.0 pips, a Razor account is available to provide retail investors with an institutional trading environment. Alternatively, customers can sign up to Pepperstone’s Standard account type, where like CMC Markets, spreads are inclusive of commission fees yet have wider bid/ask spreads from 1.0 pips.
Both CMC Markets and Pepperstone’s Standard Account types are excellent for those new to forex trading. As commission fees are included in the spread, traders avoid having to perform calculations to determine commission costs for each trade executed.
For algorithmic traders and scalpers with experience trading CFDs, Pepperstone’s Razor Account allows for a trading environment similar to that offered by an ECN broker. Active traders benefit from the institutional-grade spreads, low fees, and ultra-fast execution. While trading forex with spreads as low as 0.0 pips, Razor Account holders pay a round turn commission fee of AUD $7 per $100,000 traded. Below compares the Pepperstone Razor vs Standard account.
Pepperstone is a clear winner when the broker’s Razor Account type is compared to CMC Markets Standard Account. With ECN-like pricing, low commission fees and fast execution, Pepperstone’s Razor account offers some of the tightest spreads available to retail investors.
Which trading platform an investor wants to use is very influential when choosing an online broker. While Pepperstone customers can choose from the three most popular platforms worldwide being MetaTrader 4 (MT4), MetaTrader 5 (MT5) or cTrader, CMC Markets clients can use either MT4 or the broker’s proprietary software, Next Generation.
When trading CFDs with Pepperstone, the best-suited trading platform depends on the asset classes a user wants to trade as well as the account type they are signed up to. Standard account holders are limited to MT4, while those trading with a Razor Account can choose between MT4, MT5 and cTrader. Regarding market access, MT4 and cTrader are suited to those wanting to focus on forex markets, while MT5 allows for Share CFD trading.
Like Pepperstone, market access is a significant factor for CMC Markets customers when deciding between MT4 and Next Generation. CMC’s proprietary platform, Next Generation, offers access to the online broker’s full product range of over 10,000 financial instruments spanning 7 asset classes, while MT4 users are restricted to trading Forex and Commodities.
Advanced technical analysis tools are available on both MetaQuotes and cTrader platforms.
Pepperstone clients using cTrader, MT4 and MT5 all have access to automated trading tools via Expert Advisors (MetaQuotes) and cBots (cTrader). To supplement the inbuilt Autochartist and Expert Advisor (EA) features, MetaTrader 4 and MT5 users can download Pepperstone’s Smart Trader Tools that include 28 additional EAs and indicators.
Similarly to Pepperstone’s MT4 offering, CMC Markets allows MT4 users’ to conduct advanced trading strategies using the extensive technical analysis tools provided in addition to Expert Advisors.
The CMC Markets Next Generation platform is one of the more advanced proprietary platforms offered by online brokers. The web-based platform can be viewed in standard or advanced mode, with over 12 chart types, 35 drawing tools, 70 chart patterns and 115 technical indicators. As well as sophisticated technical analysis tools, Next Generation provides financial news, a client sentiment feature, and a pattern recognition scanner. When compared to MetaQuotes and cTrader platforms, automated trading tools are limited. For those wanting to develop algorithmic trading strategies, Next Generation is not a good trading platform option.
CMC Markets offers their Next Generation trading platform as mobile trading apps compatible with Android, iPhone and iPad. Many of the web trading platforms features are available on the Android and iOS apps, with charting features, client sentiment indicators, and live news available across all devices.
For both CMC Markets and Pepperstone, the MetaTrader 4 trading app is compatible with Android and iOS devices. Likewise, for Pepperstone’s MetaTrader 5 and cTrader users, trading apps are available for Android, iPhone and iPad devices.
Pepperstone is the winner due to the broker offering the three best trading platforms currently available to retail forex traders. With advanced trading tools, Expert Advisors and cBots, plus a range of additional add-ons, Pepperstone offers superior trading platforms when compared to CMC Markets.
Pepperstone and CMC both offer CFDs other than Forex pairs. With Pepperstone, clients can trade over 150+ financial instruments covering, while CMC Markets offers a staggering 9,500 products to choose from.
For traders’ wanting to focus on forex markets, Pepperstone offers excellent access to a range of currency pairs. For those wanting to trade other CFDs, CMC Markets offers market access to thousands of different financial instruments.
Note: Traders with CMC Markets UK plc and Pepperstone UK will not be able to trade Cryptocurrency due to FCA regulations, which forbid brokers from offering this derivative for trade.
View CMC Markets Review >>Visit CMC Markets>>
As trading forex is a high-risk activity, the range of risk management tools available to traders’ is crucial. Additionally, it is recommended to research which financial authorities regulate the broker, as investor protection provided to retail investor account holders varies between jurisdictions.
When trading with Pepperstone, clients’ are limited to basic order types that include Market, Limit and Stop orders. Additionally, order time limits can be used (Good till Cancelled or Good till Time). Unlike Pepperstone’s basic order types, CMC Markets offer a more extensive selection of sophisticated orders required by many advanced traders’.
As discussed earlier, CMC Markets clients can buy Guaranteed stop-loss orders (GSLOs) to ensure orders are executed at desired prices. As well as GSLOs, traders can utilise the following order types:
Additionally, CMC Markets customers can set and change Account Close-Out limits in the platforms account settings, which 4 different methods:
An excellent risk management tool for both novice and experienced high-volume traders is the demo accounts offered by both Pepperstone and CMC Markets. Demo accounts provide users with virtual funds to practise technical analysis, explore platform features, and test standard and algorithmic trading strategies in a risk-free environment.
Financial regulation concerning retail investor accounts vary by country. CMC Markets and Pepperstone are seen as trustworthy companies, with both brokers being overseen by top-tier financial authorities.
The following regulators are available with each broker:
Pepperstone Group has the following subsidiaries and regulators
CMC Markets PLC has the following subsidiaries and regulators
Regardless of the subsidiary a CMC Markets or Pepperstone customer signs up with, they can trade knowing that their account balances are not being used as operational capital by the broker. Most top-tier financial authorities require brokers to hold client funds in segregated accounts, ensuring balances are protected if the broker were to come into trouble.
Additionally, subsidiaries of both brokers based in the United Kingdom are required to offer fund protection under the Financial Services Compensation Scheme (FSCS), as well as Close-Out Margin Protection and Negative Balance Protection.
As both brokers are regulated by top-tier financial authorities and offer a range of order types, CMC Markets and Pepperstone tie when it comes to risk management tools.
Although eToro is the most popular social trading broker worldwide, Pepperstone is a strong contender due to its selection of third-party social trading tools. Conversely, CMC Markets is a market maker and does not offer any third party or Next Generation social trading tools. Therefore, for those wanting to utilise automated trading features like social trading, Pepperstone is much better suited than CMC Markets.
When comparing CMC Markets and Pepperstone’s social trading features, Pepperstone wins by a mile as social trading tools are not offered by CMC Markets.
CMC Markets and Pepperstone offer a range of funding methods and base currencies. Although the majority of funding methods offered by both brokers are fee-free, Pepperstone charges AUD $20 for withdrawals made via bank wire, while CMC Markets charges a 1% fee on deposits made with a credit card, and a 0.6% fee for debit card deposits.
When funding an account for the first time, Pepperstone clients are required by the broker to make a minimum deposit of $200. This deposit is not enforced as part of the account creation process, so it might be you don’t end up making any deposit.
CMC Markets, on the other hand, requires no minimum initial deposit from customers. Like with all brokers, when trading with leverage, accounts will need to meet minimum margin requirements to start trading.
Both brokers allow clients’ to set up accounts in a range of base currencies, offer a range of e-wallet, credit card and bank transfer options, as well as charging no fees for the majority of deposit and withdrawal methods.
CMC Markets and Pepperstone both offer 24/5 customer support via phone, live chat, and email. Alternatively, both brokers provide extensive FAQ sections on their websites.
When CMC Markets and Pepperstone go head to head, Pepperstone is the front runner due to the broker’s low fees, tight spreads and excellent choice of trading platforms. Pepperstone’s Razor Account type allows customers to trade ECN-like spreads as tight as 0.0 pips with low commission fees, develop advanced automated trading strategies with cBots (cTrader) and Expert Advisors (MT4 and MT5), as well as access advanced technical analysis tools and award-winning customer support.
For those wanting to explore Pepperstone’s platforms and products, or practise trading strategies without risking real money, a Pepperstone demo account is available for 30 days.
Justin Grossbard has been investing for the past 20 years and writing for the past 10. He co-founded Compare Forex Brokers in 2014 after working with the foreign exchange trading industry for several years. He also founded a number of FinTech and digital startups including Innovate Online and SMS Comparison. Justin holds a Masters Degree and an Honours in Commerce from Monash University. He and his wife Paula live in Melbourne, Australia with his son and Siberian cat. In his spare time, he watches Australian Rules Football and invests on global markets.