CMC Markets Review 2020

May 26, 2020 04:56 AM ET
CMC Markets Review 2020

Review Summary

CMC Market is an award winning, London-based broker which was founded in 1989 and listed on the London Stock Exchange. They offer their services across multiple jurisdictions and are thus regulated by several international regulatory bodies. It is considered as one of the leading CFD and spread betting providers in the market today. 

 

CMC Markets

RATING

7.5

YEAR FOUNDED

1989

LOCATION

UK

REGULATION

FCA (UK), ASIC (Australia), MAS(Singapore), FMA(Germany)IIROC(Canada)

US AVAILABLE

No

TRADING INSTRUMENTS

Indices, Forex, Shares, Stocks, Indices, Treasuries, Commodities, Cryptocurrency, Energies, Metals, CFDs

TRADING PLATFORMS

Next Generation Trading Platform, Web, Mobile, MetaTrader4 

MINIMUM DEPOSIT

$1

DEPOSIT METHODS

Wire Transfer, Debit/Credit Cards, PayPal, Poli, Bpay, 

Base currencies

10

Inactivity fee

Yes

Withdrawal fee amount

$0

Max. Leverage

Up to 1:500

Min. Spread

0 pipx

Currency pairs

338

Demo account

Yes

Social / Copy trading

No

 

CMC Markets Pros and Cons

Pros

Cons

  • Strict Regulations
  • Spread Mark-Ups
  • Financial Services Compensation Scheme( FSCS)
  • US Clients not allowed
  • Module Linking
  • No FIX API
  • Segregated Client Funds
  • No Copy Trading 

 

In-depth CMC Markets Review

CMC Markets offers a wide range of tradable assets in categories such as Forex, indices, cryptocurrencies, commodities, treasuries, metals, CFDs, energies and stock shares. Users are able to access several modern trading platforms armed with essential and advanced tools. CMC Markets is considered as a “market maker” which means that traders on the platform do not directly connect to a liquidity pool. Therefore, the spreads that they provide can be marked up, due to them not coming from an aggregated liquidity pool. 

Regulations: Because it provides its services across multiple jurisdictions around the world, the broker comes under several international regulatory bodies, as given below. 

  • In the UK, CMC Markets is authorised and regulated by the FCA or Financial Conduct Authority. Its license number is 173730, which also enables operations in the EU through MiFID passports. 

  • In New Zealand, CMC Markets is licensed by the Financial Markets Authority (FMA) with license number 41187

  • In Australia, CMC Markets is an authorised entity under the Australian Securities and Investments Commission with the licence number 238054

  • In Canada, CMC markets are regulated by the Investment Industry Regulatory Organisation of Canada(IIROC).

  • In Singapore, CMC Markets is licensed by the Monetary Authority of Singapore.

They also keep their client’s funds in segregated bank accounts across some of Europe’s well known banks including Ulster Bank, NatWest, Barclays and Lloyds, Deutsche Bank and Barclays(France).

Account Types and Opening

At CMC markets, accounts are based on the trading platform the trader is using, as well as the assets available for trading. For instance, the spread on the EUR/USD FX currency pair starts from 0.7 pips. However, commission on shares starts from 0.1%. Spreads are mostly competitive across all assets.

There are three main types of account available at CMC Markets, namely, Spread Bet Account, CFD Account and MT4 Account.

  • Spread Bet Account: Spread Bet Accounts are available exclusively to users based in the United Kingdom and Ireland. It is akin to a form of speculation trading where traders can speculate on the price movements of the assets. Spreads Start from 0.3 pips. The maximum allowed leverage is 1:30 and requires no minimum deposit. Traders can access over 9000 tradable assets for spread betting. 

  • CFD Account: CMC Market’s Next Generation Trading Platform provides CFD Accounts to users, giving them access to over 10000 trading instruments. Only Shares are charged with commissions.

  • MT4 Account: This account is exclusively for those using MetaTrader 4 Trading platform. Traders have access to 50 tradable assets over indices, commodities and forex. These accounts are not charged with any commissions as the spread usually includes the broker fees. 

Apart from this CMC Markets also offer a VIP Account which is launched through its Australian Entity. This is however, applicable only for traders who have more than $2.5 million in holdings or who have spent $3k in commissions. 

How to Open an Account at CMC Markets?

Just like the majority of the brokers around, opening an account at CMC markets is easy and comes with a few easy steps. Account verification usually takes one to two business days, but this could vary.

Steps to Follow:

  • Users have to first select his/her country of residence and provide an email and password to continue.

  • A code will be sent to the user’s entered email id after which he/she can proceed.

  • They will be required to choose their preferred account type, whether it’s a joint or individual account, as well as the base currency.

  • They are then required to fill in some personal details and information about their financial background.

  • After this step, users would be greeted by the demo platform. They have to further upload documents to prove their identity and residency. 

  • After receiving verification, users can proceed to fund their account. 

For identity verification, users can use documents such as a national ID card or passport, or a photo of both sides of your driver’s license. Residency verification required documents such as bank statement, mortgage statement, utility bill or credit card statement. 

 

CMC Markets opening account

There are multiple currency options when opening accounts. Users can choose from USD, EUR, GBP, NOK, SEK and CHF. This can be beneficial for those traders who want to avoid high currency conversion fees. 

Deposits and Withdrawals

CMC Markets States that it does not accept cash deposits nor can it receive or make payments to third parties. All payments must be made in the user’s account name. CMC markets do not charge any fees for deposits and withdrawals. However, there is a transaction fee which is charged by certain payment processors when transferring funds from users. Availability of payment methods also depend on the user’s country of operation. Bank transfers normally take a few business days to clear. 

Some of the globally accepted funding options are given below.

  • Online Payments: CMC allows users to use several e-payment solutions such as PayPal, Poli and Bpay. They are usually processed instantaneously. However, not all users from all countries have this option.

  • Wire Transfer: Clients can directly transfer their funds via Wire Transfer to their CMC Markets bank accounts. Withdrawals can also be made using the same method. Depending on the banks being used, this process can take up to 3 to 7 working days. 

  • Credit/Debit Cards: CMC Markets accepts only 3D secure cards and does not accept Diner or AMEX. Card payments are usually completed within a few hours. 

Commissions and Fees

The trading fees for forex and stock Index CFD fees can be considered low at CMC Markets, while stock CFD fees are a bit on the higher side. 

  • Fees for Trading CFDs: The fees for trading CFDs at CMC Markets can be classified as average, as the stock index CFD fees are low while the fees for stock CFDs are quite high. For a $2000 position with applied leverage of 20:1, the fees for the following stock index CFDs are given below.

    • Apple CFD fee: $22.4

    • Vodafone CFD fee: $23.4

    • Europe 50 Index CFD fee $3.1

    • S&P 500 Index CFD: $2.5

  • Fees for Forex: For a $20000 position with applied leverage of 30:1(held for a week), the fees for the following currency pairs are as follows. 

    • EUR/CHF fees: $4.4

    • AUD/USD: fees: $10.9

    • EUR/GBP fees: $11.8

    • GBP/USD fees: $12.1

    • EUR/USD fees: $16.2

  • Other Non-Trading Fees: CMC Markets charge an inactivity fee of £10 on a monthly basis, after an initial 12 months of inactivity. 

  • Rebates: CMC Markets offer liquidity rebates. For a trader to be applicable for this, he/she should surpass at least $25 million in trading volume per month.  Liquidity levels can range from $5 to $10 per million. 

Trading instruments and markets

CMC Markets are primarily considered as Forex and CFD brokers, with a huge collection of CFDs not often seen in other brokers of its nature. Along with 338 currency pairs on offer, CMC Markets provide 92 Stock Index CFDs, 9000+ Stock CFDs and ETFs, 56 Bond CFDs, 136 Commodity CFDs and 15 cryptocurrency markets. 

  • Stock Index CFDs: CMC Markets offer 92 Stock Index CFDS including the US 30 from just 1.6 points and the UK 100 and German 30 indices from   1 point. 

  • Stock CFDS and ETFs: CMC Markets offer 9400 global shares which includes 1000 ETFs. They offer popular share CFDs on stocks such as BP, Lloyds Banking Group, Tesco, Rio Tinto and Apple. 

  • Bond CFDs: CMC Markets offers a treasury market which consists of government debt such as gilts, bonds and treasury notes. They offer 56 bonds from across the globe.

  • Commodities CFDs: AT CMC Markets, the commodities CFD market includes cash and forward commodities instruments such as Brent and WTI crude oil, along with Gold, Silver and Natural Gas. 

  • Cryptocurrency CFDs: CMC Markets provide users the option of trading CFDs of popular cryptocurrencies including Bitcoin, Ripple, Litecoin and Ethereum, along with a unique range of crypto indices.

CMC Markets Spreads

 

Trading Platforms and Tools

There are two platforms and 1 app available on CMC Markets. They are explained in brief below. 

1. MetaTrader 4:

Developed by Russian Company Metaquotes, MetaTrader 4 has become one of the most used and popular trading platforms in the world, with millions of users. It is a well-known platform for trading forex and CFDs. MetaTrader 4 is available for download on the CMC Markets website and can be installed on a windows PC.
MetaTrader 4 comes packed with some features such as:

    • Multiple Order Types and Risk Management Tools

    • Access to MetaTrader Markets where EAs, custom indicators and signals can be purchased

    • Multiple Timeframes and Chart Types available

    • Provides MetaEditor where traders can create custom indicators and EAs

    • Wide range of tools for analysis including drawing tools and technical indicators. 

    • Monitoring features include account monitoring tools, trade monitoring tools, trade history, live quotes and many more.

    • Provides Alert Notifications through SMS, email or the platform itself. 

CMC Markets MetaTrader 4

2. Next Generation Trading Platform:

The Next Generation Trading Platform is CMC Market’s proprietary platform that has won many accolades. Because it is a web based service, it does not require any downloads or installations on any devices. Mobile users can also easily use it as it is supported by almost all web browsers. The platform is designed with multiple windows and layouts, loaded with analytical tools, advanced order management and a complex charging package. 
Some of the notable features of this platform include:

    • 115+ Technical indicators

    • Trading directly from the charts

    • 12 types of charts including rare ones such as Renko, Kagi and OHLC charts

    • Layouts, charts and indicators are fully customisable

    • News is directly streamed on to the platform from Reuters

    • Other Tools such as Client Sentiment, Module Linking and Pattern Recognition

CMC Markets Next Generation Trading Platform

Trading Tools

  1. CMC TV: The CMC TV tool is provided daily by CMC Markets experts. It provides useful technical analysis and market insights on some selected assets. 

  2. Pattern Recognition and Price Projection: The Next generation trading platform possess the pattern recognition tool that helps users to scan charts and recognise technical patterns such as wedges and triangles. A price rejection box is created when the patterns are complete, highlighting where the price action is likely to go. 

  3. Module Linking: Module Linking enables CMC Market users to group charts together for comparison. It is a useful tool for examining the same assets over multiple timeframes, charts and indicators. 

  4. Client Sentiment: The Client Sentiment Tool shows the users the percentage of traders that have bought or sold any instrument. 

  5. Chart Forum Community:  This is an online forum where traders on the platform discuss strategies, share chart analysis and exchange ideas with each other. It is provided as part of the Next Generation Trading Platform and allows traders to copy analysis, and post their comments on posts. 

  6. Market Calendar: The Market Calendar provides important information such as different global events as how they will impact the market. This tool is powered by Reuters and is streamed directly on to the platform. 

User Experience

  • Mobile Trading: CMC Markets Users can access trading from their mobile devices either through the MetaTrader 4 mobile app or the CMC CFD Trading App, which is the mobile version of the Next Generation App. 

    • MetaTrader 4 Mobile App:  The MetaTrader4 mobile app provides the same functionality, efficiency and versatility offered by MetaTrader 4 on a mobile device. It is available for both iOS as well as Android devices and can be downloaded from their respective app stores. The MetaTrader 4 mobile app allows any trader to access a multitude of financial tools from the comfort of their mobile devices. The Mobile App allows users to perform functions such as access 30 technical indicators, 24 analytical objects, 9 timeframes, 3 types of charts, all order types and execution modes as found in the MetaTrader platform and complete control over their trading account. 

CMC Markets MetaTrader 4 Mobile App

    • CMC CFD Trading App: As mentioned before, this is the mobile app version of the original Next Generation Trading platform, compatible with both Android as well as iOS devices and is available on their respective app stores. Clients get access to over thousands of instruments, directly from their mobile devices.
      Some notable features of this app include: 

      • 30+ technical indicators, drawing tools and multiple charts

      • Live economic calendar with alerts on the app

      • Insights tool which presents analysis from CMC market analysts. 

      • A Customizable watch list which can be used to view and arrange instruments according to the user’s trading interests. 

      • Alert push Notification

      • Sentiment analysis Charts also available

Research

  • News and Analysis:  CMC Markets provide a section for Market commentary, weekly outlook, Chart analysis, technical and fundamental analysis, all prepared and presented by a team of experts. 

Education

  • Demo Account: CMC Markets provide Demo accounts that are available for all platforms. Each user is given a virtual cash balance of $10000. Demo accounts are a great way for beginner traders to familiarise themselves with the platform and a live trading environment. Experienced traders can also use a demo account while they’re experimenting with different trading strategies, without actually risking any real money.
    Users can open a demo account by clicking on the “Try risk-Free Demo” tab on the official website. Users are first required to enter their country of residence and proceed to enter their email and password to open a demo account. 

  • Trading Webinars: CMC Markets hosts webinars on the official website which are scheduled from time to time, usually two times per month. 

  • Trading Videos: Training Videos and other educational videos are a great asset for beginner users who are interested in learning more about the details of the trading markets. It covers a wide variety of markets such as Fundamental analysis, Forex, technical indicators, CFD trading and spread betting. They are categorised for beginners, intermediates and advanced traders.

  • Trading Guides: CMC Markets provide trading guides including lessons on Forex, Cryptocurrencies and CFDs. This section also contains articles which grapple with the basic concepts of trading. 

Customer Service

CMC Markets provides a customer service that works from 9pm Sunday to 10pm Friday, available 24 hours. Users can contact them through email, telephone and instant web chat. Along with a detailed section for Frequently Asked Questions, it also has a glossary of more than 220 financial market terms which are defined in detail. According to the website, CMC Markets operate 13 satellite offices spanning four continents to support licensed operations in other countries. The broker is also available in Social media platforms such as Facebook and Twitter. 

Safety and Security

CMC Markets operates across multiple jurisdictions and is thus regulated by regulatory authorities in the UK, Canada, Australia, New Zealand and Singapore. To protect their client’s funds, CMC Markets has put several protocols in place and taken some measures.

  • CMC Markets Account records are crosschecked and audited by internal auditors regularly. Their yearly audit is conducted by PricewaterhouseCoopers and reports it to the concerned regulatory authorities. 

  • Client Deposits are maintained in separate segregated bank accounts by CMC Markets. These funds are deposited across banks such as Barclays(France), Deutsche Bank, NatWest, Barclays and Lloyds. 

  • CMC Markets UK is insured under the FSCS or Financial Services Compensation Scheme which can compensate eligible clients with up to £85000 per person. This may only happen in case the broker becomes insolvent.  

  • In Canada, clients are insured for up to 1 Million CAD under the Canadian Protection Fund or CIPF.

  • In Singapore, customers of entities regulated by the MAS are also entitled to a compensation of 50000 Singapore dollars. 

  • The trading platforms and other web-based services are protected with SSL (Secured Socket Layer) encryptions. This provides adequate protection against cyber hackers and identity thieves. 

  • CMC Markets also falls under ESMA jurisdiction which allows for negative balance protection according to rules introduced in 2018

  • CMC Market’s dealing desk acts as Counterparty to all spread bets and CFDs. However, pricing is automated through the platforms. 

  • Software security is standard. However, due to the growing threat of cyber-crimes and data breaches, it may seem less than required as the platform does not have any two-tier authentication process. 

Conclusion

CMC Markets can provide a complete trading experience to many traders but comes with its own set of flaws. It provides a sophisticated order interface but lacks back-testing capabilities as well as any direct VPS service. This can force some account holders to use the MT4 platform which is functionally inferior to the most sophisticated proprietary platform provided by CMC Markets. Active trader rebates can only be accessed by professional clients. CMC Markets also does not provide any API Interface. 

CMC Markets can be considered as ideal for both new as well as low skilled traders. They provide free live accounts, average to competitive spreads and highly useful educational resources. There are some professionals and institutions that would find some features attractive for them as well. However, the lack of access to active trader rebates or an API interface would deter many high skilled traders from using this platform.


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