CMC Markets is a highly regarded broker for share trading, but are they better than contracts for difference (CFD) specialist Plus500? Both forex and CFD brokers offer excellent trading platforms with over 80 technical indicators and 10+ charting tools. We compare the brokers key trading features to establish the winning broker for 2021.
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Spreads are one of the main costs for each forex trade executed. Spreads (the difference between bid/ask prices) are the trading fee charged to clients, and how brokers are compensated for facilitating trades and providing market access.
Our sample of spreads from June 2021 shows a selection of major currency pairs. At most, there the spreads appear to differ by no more than 0.1 pip between Plus500 and CMC Markets.
Given the lack of difference in spreads for each broker, spreads need not be a major factor when choosing between Plus500 and CMC Markets. Both online brokers offer competitive spreads that are conducive to scalping and other trading styles.
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Funding charges may apply for the following situations
Other funding costs include
Both Plus500 and CMC Markets use margin rate rather than leverage. The margin rate is the minimum deposit you will require to open and maintain your trading position. From this margin, one can determine how much leverage the broker will lend you, yet this varies between asset class and the subsidiary’s local regulator.
CMC Markets in NZ and regulated by the FMA have a more generous margin rate of 0.20% (500:1) than Plus500, which only offers 0.37.5% (300:1) via its offshore branch in Seychelles regulated by the FSA.
Under ASIC (Australia), FCA (UK) and CySEC (Europe) regulation, both Plus500 and CMC Markets are restricted to offering maximum leverage of 30:1 for major forex pairs, and 20:1 for minor pairs.
Leverage is a useful tool in a traders arsenal. Currency pairs only change a few cents most of the time, making it hard to make large profits without a large initial investment. More money invested means greater returns when prices move in your favour.
It is, however, important to understand that leverage comes with a high risk that can lead to large losses when prices move in unfavourable directions. Therefore, it is important to understand the high risks associated with leveraged positions and use leverage responsibly. Trading platforms offer risk management tools that can assist in minimising losses and protecting capital.
CMC Markets offer a better margin rate than Plus500, therefore, we recommend CMC Markets.
In addition to common risk management features like trailing stop, take-profit and call margin both brokers as well as standard guaranteed stop-losses, both Plus500 and CMC Markets offer Guaranteed Stop-Loss Orders (GSLO).
For a premium, clients can guarantee their stop-loss threshold on their trading position. A GSLO ensures you are protected against slippage that can occur with a standard stop-loss. Premiums will vary depending on the currency pair chosen, but you only need to pay this if the GSLO is executed.
Some traders employ Guaranteed Stop Loss Orders when trading in volatile markets or if they lack experience. GSLO is a great risk management feature that can provide a high level of protection against losing your money.
For trading accounts held with both online brokers, the Financial Services Compensation Scheme (FSCS) provides further protection up to GBP 85,000 in the event the broker becomes insolvent. Additional protection is also offered through the negative balance protection policy, which prevents clients with both brokers to lose more than the deposited money.
Both Plus500 and CMC Markets offer the same basic risk management tools for spread betting. For this reason, we will call this category a draw.
Plus500 clients are restricted to the broker’s proprietary trading platform. The Plus500 platform is available on desktop, web and mobile (iOS and Android).
The Plus500 platform is popular with casual investors due to its clean design and emphasis on simplicity. However, the platform lacks advanced features that more advanced traders may require. For instance, the platform does not offer social trading, the ability to trade directly from charts, or drawing tools. The mobile version lacks certain essential features that are available on the desktop version, such as drawing tools.
Plus500 offers the following
Clients have a choice of two trading platforms. These are CMC Markets own proprietary ‘Next Generation’ trading platform and MetaTrader 4. Both of these platforms are available to clients on a tablet or mobile (Android, Windows, Mac, iOS), as well as a Webtrader platform. Those using the ‘Next Generation’ app on mobiles will have access to the same features as those on Webtrader, however, those using a browser will have a more comprehensive selection of tools and features.
Generation Next Trading Platform has the following features:
In late 2018, CMC Markets began to offer MetaTrader 4 (MT4) as a trading option. The MT4 platform is known as the gold standard of trading platforms and is offered by more brokers than any other platform.
Introducing MT4 was a smart move by CMC Markets, given this will encourage traders using MT4 with other brokers to switch to CMC Markets. MT4 is a great platform in its own right but has one big advantage over many other platforms in that it does not lock you into a particular client’s ecosystem. By this, we mean you can switch brokers also offering MT4 with few issues.
If you choose to use MetaTrader 4, you will still need a Next Generation Account. CMC Markets require this to overcome funding limitations with their MT4 platform.
It is important to note that you cannot trade shares via the CMC Markets MT4 platform. CMC Markets only allow trading of Forex, Indices and Commodities, yet users can still trade shares via the Next Generation platform.
Pros of MT4
Plus500 is a great platform for beginner and intermediate traders. If you require more advanced trading tools and analysis, then we suggest you use one of the CMC Markets platforms such as MetaTrader 4.
CMC Markets has a global reputation as a share and forex broker, with some commodities available. CMC Markets offer extensive market access to a range of share and forex instruments available. However, if you want to trade CFDs, Plus500 offers a larger CFD product range.
Disclaimer: The Financial Conduct Authority (FCA), the main regulator in the UK banned cryptocurrency trading, coming into effect on June 6, 2021. Neither Plus500 nor CMC Markets advertise the sales of financial instruments such as Bitcoin, Ethereum, Ripple, etc. to UK retail traders. Please take note that traders outside of the UK can still trade cryptocurrencies.
If you are looking for a broker with a wide range of contracts for difference, then we recommend Plus500. If you are looking for a broker that offers a large range of shares then we recommend CMC Markets.
Plus500 lack customer support features when you compare with the main online forex brokers. While they do offer 24/7 live chat and email support and even WhatsApp, the absence of phone support is glaring. While you can certainly use live chat or email to resolve your issues, it is safe to say, many people still do like to have phone access to customer support when needed.
Not only are the customer support features scarce, but Plus500 also does not offer much in the way of customer service and education. Most CFD and forex brokers offer educational resources to assist clients of all levels of experience. Plus500’s lack of such resources may hinder traders’ forex trading development.
Not only do Plus500 not offer much in the way of education, but Plus500 also fails to offer comprehensive technical analysis from experts. Many brokers engage analysts to provide input, education, and updates on news or trends in the market. Plus500 offers neither in-house nor 3rd party technical analysis. They also do not offer economic calendars, which are a basic feature in the industry.
With all this said, the lack of these features does not make Plus500 a bad product. Not everyone needs these features, and much of the information provided by other forex brokers is available for free elsewhere.
The Plus500 demo account has two key benefits that make it superior to other virtual accounts offered by brokers. Firstly, there is no access restriction. This means you have unlimited access to your demo account with no time restrictions. Secondly, there are no funds restriction, meaning you have all the virtual funds you need to practice your trading with.
Unlike Plus500, CMC Markets offer customer support via phone, live chat and email. This service is available Monday 8 am to 8 am Saturday. You can also reach the CMC Markets support team via the CMC Markets Twitter and Facebook account.
It is interesting to note that if you use the live chat via the website, you will be dealing with the stock market support team. This can lead to some confusion given the support team will assume your asking questions relating to CMC Markets stock market accounts.
If you have questions regarding CFDs, then you will need to log in with your account to chat with the live chat team. This is not always convenient if you don’t have a CFD account, meaning you will need to call the help desk if you have questions.
CMC Markets offer a great collection of customer service tools.
Research: CMC Markets offer a range of news and analysis features that help you stay on top of all the latest news and events in financial markets. These include:
Education: CMC Markets offers a wealth of educational material, these include:
Demo Account: CMC Markets provide access to $10,000 of virtual funds in a demo account. The account is free for you to use as long as you have a CMC Markets Account.
CMC Markets offers superior customer experience and provides quality educational and research resources, while Plus500 offers below-average support and education. Therefore, CMC wins this round by a mile.
Plus500 have a first deposit and rebate program where you will be rewarded with credits based on the size of your deposit or trading volume. The more trader points you earn, the more credit you will receive.
Below shows the credits you will earn for the trading points you have, along with the amount you receive for your first deposit.
Below shows a sample of the trader points you will earn for trading forex. You need to trade at least $1500 and points earned will vary for each currency pair. You will also receive points for trading with other CFDs.
CMC Markets will top up your account with 20% of your deposit throughout your first month of trading.
If you trade a minimum of 25 million in a month, you qualify for CMC Markets rebate program.
Refer a friend
You can also receive a bonus if you refer a friend
Plus500 wins thanks to its ongoing rebate program that is a better value than CMC Markets.
CMC Markets is a leading online trading provider that is considered a safe broker. CMC Markets Plc is a UK-based company listed on the London Stock Exchange with ticker symbol: CMCX and over 29 years of experience in the FX arena. Regulation from three tier-one jurisdictions (FCA, ASIC and IIROC) makes this CFD broker legit.
To examine further the weaknesses and strengths found with this brokerage trading firm please see our unbiased CMC Markets Review 2021.
At Plus500 the average EUR/USD spread is 0.8 pips compared to 0.7 pips average EUR/USD spread found at CMC Markets. The difference in trading cost seems negligible at most. At the same time, Plus500 offers zero commission trading on CFD shares, while at CMC markets the commission starts from 0.1%. When we factor in the total trading cost (spread + commission), Plus500 has a slight advantage.
See our Low Spread Forex Brokers 2021 List for an in-depth comparison of forex brokers with low spreads and commission fees in 2021.
At CMC Markets the minimum deposit is USD 0. This CFD broker doesn’t enforce a minimum deposit policy, but clients will not be able to trade until they transfer funds into their accounts. Applying for a live account with CMC Markets is free.
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.