CMC Markets Review 2022

Trust

In our trust category, we place most importance on how a broker is regulated. So let’s dive in and take a look at how the different entities of CMC Markets across the globe are regulated and how this impacts you as a trader. We rate regulators on a scale of 1 to 3, with 1 reflecting the highest level of trust.

CMC Markets is regulated by multiple financial authorities around the world.

• CMC Markets UK PLC is authorised and regulated by the UK Financial Conduct Authority (FCA), firm reference number 173730. We rate FCA as a Tier 1 regulator.
• CMC Markets Asia Pacific Pty Ltd. is authorised and regulated by the Australian Securities and Investment Commission (ASIC), ACN number 100 058 213. We rate ASIC as a Tier 1 regulator.
• CMC Markets Canada Inc. is authorised and regulated by the Investment Industry Regulatory Organization of Canada (IIROC). We rate IIROC as a Tier 2 regulator.
• CMC Markets Germany GmbH is authorised and regulated by the Federal Financial Supervisory Authority (BaFin), ID number 10154814. We rate BaFin as a Tier 2 regulator.
• CMC Markets Singapore Pte. Ltd. is authorised and regulated by the Monetary Authority of Singapore (MAS). We rate MAS as a Tier 2 regulator.
• CMC Markets Middle East Ltd. is authorised and regulated by the Dubai Financial Services Authority (DFSA), reference number F002740. We rate DFSA as a Tier 2 regulator.
• CMC Markets NZ Ltd. is authorised and regulated by the New Zealand Financial Markets Authority (FMA), reference number FSP41187. We rate FMA as a Tier 2 regulator.

Why is it important to know where your broker subsidiary (entity) is regulated?

Different regulators provide different levels of protection. For example, CMC Markets clients in the United Kingdom benefit from the oversight of the UK Financial Conduct Authority (FCA). The FCA requires that clients have negative balance protection, which means that they cannot lose more than their deposit. Client funds must be held in segregated accounts, which are protected in the event of a broker going bankrupt.

In addition, when trading with a broker authorised by the FCA, client funds are protected by the Financial Services Compensation Scheme (FSCS). The FSCS protects investments of up to £85,000 if a firm becomes insolvent. A trader working with a broker entity regulated offshore would not have these benefits guaranteed to them.

In the table below we break down the mandated protections and benefits by entity, regulator and region.

Stability and Transparency

In our tests for the Trust category we also cover factors relating to stability and transparency. Here, we focus on how long the broker has been in business, the size of the company and how transparent they are in terms of information being readily available.

Founded in 1989, CMC Markets has a substantial operating history and is one of the oldest Forex and CFD brokers in the world. It is also one of the largest, with between 501 to 1,000 employees, according to the company LinkedIn page. Headquartered in the City of London, CMC Markets also has offices in Sydney, Singapore, Toronto and across Europe.

CMC Markets is a publicly traded company, listed on the London Stock Exchange (UK:CMCX). In 2020 it became part of the FTSE 250 Index, a capitalisation-weighted index listing the largest companies on the London Stock Exchange. As a publicly traded company, CMC Markets must disclose financial reports, allowing for greater insight into the stability of the company.

In our research, CMC Markets showed a good level of transparency in areas such as their regulatory status, fees and general background information. Information and materials are readily available on the website. The regulatory status of different subsidiaries is covered at the footer of each page. The Trading Costs page clearly outlines all the costs such as spreads and overnight holding fees. A User Agreement (Terms of business) document is available on the CFD Legal Documents page.

Overall, we rated CMC Markets as having a high level of trust and stability due to the following factors:

• Being regulated by multiple top-tier agencies.
• Having a lengthy operating history.
• Being a publicly traded company.
• Having a high level of transparency.

Fees

CMC Markets earns money mainly from spreads (the gap between the bid and offer prices of an asset). However, in the case of stock CFDs, commissions are also charged.

Spreads at CMC Markets are among the tightest in the industry, making it an attractive broker for active traders. Rebates are also available for high-volume professional traders, allowing for further savings.

Trading Fees

CMC Markets aim to fix their spreads at a target level but it is not guaranteed. The size of the spread typically depends on the level of liquidity in the market. Liquidity describes the extent to which an instrument can be bought and sold quickly and without moving the market. Tighter spreads are usually seen when there is greater liquidity in the market.

We tested the spreads at CMC Markets across different asset classes in a live account using the Next Generation platform. The test was done at 8AM GMT and at 4PM GMT on February 3rd 2022. We made our tests at two different times to allow greater perspective. 8AM GMT is the London open, when there is a great deal of liquidity in the forex market and therefore tighter spreads in currency pairs. 4PM GMT is shortly after the opening of the New York stock exchange.

When trading CFDs on shares at CMC Markets a commission is charged when placing each trade. The charge varies depending on which country the share originates from.

Spreads at CMC Markets were very competitive in our tests, beating industry averages in assets from forex to commodities and index CFDs.

Swap Fees

Swap fees (the cost of holding a position overnight) were average at CMC Markets.

In the table below you can see the Swap Long (the cost/credit of holding a buy position overnight) and the Swap Short (the cost/credit of holding a sell position overnight) for one full sized contract. A full sized contract is 100,000 units of the base currency (the first currency quoted in the pair).

Non-Trading Fees

There is no charge for the deposit and withdrawal of funds. There is a monthly fee of 10 units of your local currency after 12 months of inactivity. This fee is fairly standard for the industry and there are no deductions made if there are no funds in the account.

Are Fees at CMC Markets Competitive?

Overall we were impressed by the fees at CMC Markets and especially with the tight spreads, which is something highly important to traders. The costs of entering and exiting trades are reflected in the spread. For an active trader, this cost can often make the difference between being profitable or suffering losses at the end of the day.

Platforms and Tools

The Next Generation Platform

The Next Generation platform is both user friendly and feature rich with advanced tools and robust charting.

At the core of CMC Markets’ offering is its proprietary web-based Next Generation platform. The platform has a clean, easy to use interface along with advanced functionality, making it suitable for beginners as well as experienced traders.

Charting within the Next Generation Platform is robust and feature rich. Charts include the following features:

• 115 technical indicators. These are broken down into two categories: Overlays and Studies. Overlays cover indicators like moving averages, Bollinger Bands and Keltner Channels that sit on top of charts. Studies include indicators such as MACD, RSI and a broad range of other oscillators that are typically represented beneath a chart. These overlays and studies are added from the bottom of the chart and there is a nice visual representation in the platform, making the process smooth and intuitive for beginners.
• 13 chart types, including classic formats such as Japanese Candlesticks and Bar charts to the more exotic Kagi and Renko charts.
• 40 drawing tools. These range from basic trend line and channel drawing tools to a variety of Fibonacci and Gartley tools. Again these are visually represented beneath the chart making them easier to use and understand.
• 17 time frames, ranging from 1 second to 1 week. Being able to work with different time frames allows traders to perform analysis specific to a given period. One-minute charts show how the price of an instrument moves during each one-minute period. Hourly charts show how price moves during each hourly period and so forth. You can also select the total time period you want to view on a chart. This ranges from 1 day to a maximum, which varies by instrument. In the case of gold, you can view the market going back 26 years to 1996.

The layout of charts within the platform is easily customisable and there are a variety of preset layouts you can select if you want to watch the charts of multiple markets at once.

The Next Generation platform offers built in chart pattern recognition tools. The idea is that you can scan multiple instruments and timeframes for classic chart patterns that may have predictive value. The patterns recognized are mostly basic ones such as triangles, wedges and double tops/bottoms. The more sophisticated Head and Shoulders pattern can also be identified.

A client sentiment tool lets you know what other clients within the platform are trading and whether they are long (buyers) or short (sellers). Sentiment can be viewed across the whole client base or just among the top performing traders. Sentiment is usually used as a contrarian indicator.

The platform offers an above average range of order types for placing trades. Traders can choose between the following orders:

• Market orders. This order type is used to open or close trades at the current market price.
• Limit orders. Limit orders are used to enter or exit the market at a specific price.
• Stop loss orders. Here you can specify the price at which a position will be closed if the market moves adversely.
• Trailing stop loss orders. This type of stop loss order follows market price as it moves in your favour. It remains at a set distance from the current price, allowing you to lock in profits.
• Guaranteed stop loss orders. GSLOs provide certainty that your stop-loss will be executed at your desired price. However, there is an additional charge for this order type (which is fully refunded if the GSLO is not triggered).
• Boundary orders. For use in fast markets, this order type allows you to set a price range that you are willing to accept to ensure that your trade is executed.

Time in force conditions can be applied to orders. For example if you are entering a limit order to buy gold at a price below where the market is trading, you can either mark the order GTC (good til cancel) or set a specific expiry date for your order.

The Next Generation platform also offers two important features for active traders who value speed in placing orders.

• Trading from the chart. This allows traders to make a trade directly from the chart without needing to move to a separate panel for orders.
• 1-click trading. This feature allows traders to open or close a trade with a single click, without having to confirm the order.

Mobile Trading

The CMC Markets mobile app is both intuitive and feature rich, delivering a great experience for traders on the move.

The CMC Markets mobile app has a great user interface and is packed with similar functionality to the web platform. Over 10,000 instruments are available to trade. Charts are optimised for mobile and offer 25 technical indicators and 15 drawing tools. You can place, edit and close trades directly from charts.

The full range of order types including guaranteed stop-loss orders, trailing stops can be used through the order tickets on the app. Both biometric (fingerprint) and two-step login are available.

The start screen is customizable to suit your preferences. Alerts on your orders or prices levels can be set up via push notifications, SMS or email.

Minor drawbacks: You can’t be logged into mobile and the web platform at the same time. Also, charts do not automatically sync with the way you have them set up in the web platform.

MetaTrader 4

MetaTrader is a powerful platform with impressive features but the interface appears dated in comparison with the Next Generation Platform. What distinguishes MetaTrader is its ability to perform strategy backtesting and automated trading.

Key Features

The platform provides popular features such as:

• Alerts. This feature allows traders to be updated when an instrument reaches a specific price level. Alerts can be delivered via audio, an email, or a push notification to a mobile device.
• Watchlists. Traders can set up a list of their favorite instruments and follow live quotes in a panel called Market Watch.
• One-click trading. This feature allows traders to execute orders with a single click and no secondary confirmation. Being able to place a trade with a single click saves time and is especially useful for short term traders.
• Trading from the chart. MT4 also allows users the convenience of trading directly from the chart.

Order Types

MetaTrader also delivers when it comes to the range of available order types and its charting functionality. The following order types are available:

• Market Order. This is an order to buy or sell an instrument at the current best available price.
• Limit Order. This is an order to buy or sell an instrument at a specified price or better.
• Stop Loss Order. This is an order to buy or sell an instrument that is triggered when price reaches a specified level.
• Trailing Stop Order. This is a stop loss order that can be set at a defined percentage or dollar amount away from an instrument’s current market price. It is used to secure profits when you are in a winning trade, while not having to exit the position.

Charting

Charting features are robust. MetaTrader 4 offers:

• 30 technical indicators. These include classic trend indicators, volume indicators and oscillators.
• 23 analytical objects. These include lines, channels, Gann and Fibonacci tools.
• 9 time frames Each instrument can be displayed in nine time frames, from one minute to one month.
• 3 chart types. Traders can choose between Bar Charts, Japanese Candlestick Charts and Line Charts.

Advanced Features

MetaTrader is also popular due to its copy trading and automated trading features.

• Trading Signals. Signals in MetaTrader 4 allow users to automatically copy the activity of other traders in real time.
• Automated trading. MetaTrader 4 allows users to develop, test and apply Expert Advisors (EAs). EAs are programs that monitor and trade markets using algorithms. They find opportunities according to set parameters and then either create a notification or automatically open a trade.

To conclude, the MetaTrader 4 desktop platform is one of the most feature-rich and popular trading platforms in the world. It does not have the best design and it does require some time and effort to learn, but that is typical of advanced platforms.

Order Execution

CMC Markets is a dealing desk/market maker broker, meaning that they set the bid (buy) and offer (sell) prices internally and automatically take the other side of a client’s trade. This contrasts with STP/ECN brokers who provide clients direct access to other market participants. (STP stands for straight through processing and ECN stands for electronic communications network.)

Tradable Instruments

Clients of CMC Markets can enjoy a greater number of trading opportunities through the sheer size of the number of trading instruments available. Over 11,500 CFD instruments can be traded covering forex, indices, cryptocurrencies, commodities, shares, ETFs and treasuries. These include:

• 338 Currency Pairs. A currency pair combines two different currencies, with the value of one currency quoted against the other. For example EUR/USD, which reflects the value of the euro measured in dollars.
• 83 Indices. An index is a basket of trading instruments that is used to gauge a market sector, stocks within an exchange or the economy of a country.
• 19 Cryptocurrencies. Cryptocurrencies, such as Bitcoin, are digital currencies that are secured by cryptography.
• 10,323 Global Stock CFDs. A stock is a security that represents partial ownership of a corporation. Keep in mind that when trading stock CFDs you are speculating on the price of a stock without actually taking ownership of the underlying company.
• 1,093 ETF CFDs. Exchange traded funds (ETF) are financial instruments that track an index or sector and trade like a stock on an exchange.
• 135 Commodities CFDs. Commodities are raw products, such as gold and oil.
• 52 Treasury CFDs. Treasury instruments, including gilts, bunds, bonds and T-notes.

CMC Markets does not offer Options CFDs. This is something relatively rare among CFD brokers.

Note: Cryptocurrencies are only available in the UK for clients with professional accounts. This is because in January of 2021 the FCA banned the sale of crypto-derivatives to retail consumers.

In the table below, you can see a selection highlighting the variety of instruments available at CMC Markets:

Disclaimer: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage.

Customer Support

CMC Markets offer support via email, chat and phone. Chat and local phone support are available 24 hours a day from Monday to Friday.

When testing the support via chat, there was often a short delay and placement in a queue. The wait was not long, but clearly longer than some market leaders where responses are usually immediate. In phone support the wait time was almost zero. For email inquiries we typically received a response within 1 business day.

We tested support with a variety of questions. These ranged from the basic, for example, ‘are funds segregated?’ to more unusual inquiries such as ‘does CMC Markets offer VWAP?’. Overall we received a good quality of response in a timely fashion.

CMC Markets is available in the UK, Australia, Canada, France, Germany, Ireland, Italy, New Zealand, Norway, Poland, Singapore, Spain and Sweden and customer support is available in the native language for all of these countries.

Deposits & Withdrawals

Deposits and withdrawals can be done using Visa, Mastercard and Maestro credit/debit cards, Paypal, or bank wire. American Express is not an option.

Deposits

Deposits made by credit/debit card and PayPal are instantly available in your account. Local bank transfers are typically processed within two business hours and international bank transfers can take up to 5 working days.

Withdrawals

Withdrawal methods are the same as those for deposits but the process takes longer.

We judged the speed of deposits and withdrawals at CMC Markets to be average for the industry.

Account Types and Terms

For clients in the UK an important difference between spread betting and CFD trading is how they are taxed. Profits from spread betting are free from capital gains tax. Spread betting is also only available to clients in the UK or Ireland, while CFDs are available worldwide.

The table below compares key features of the three account types:

Account Opening

To begin the application process you must enter your email and set up a password. A verification code is sent to your email and then you can start the main part of the application. Here you must answer the following:

1. Your name.
2. Your country.
3. Choose between CFDs and Spread Betting.
4. Choose between an individual or corporate account.
5. Select your account (base) currency from British pound, US dollar, Euro, Norwegian krone, Swedish krona or Swiss franc.
6. Your date of birth.
7. Your phone number.
8. Your nationality.
9. Your address.
10. Your employment status.
11. Your financial background information, such as the source of your trading funds, annual income and the amount of your savings and investments.
12. Your main reason for applying for an account (such as speculation, hedging or long term investment).
13. What other investments you hold (such as stocks or bonds).
14. How much experience you have trading shares, bonds, CFDs, spread bets, forex or other leveraged products over the past three years.
15. Whether you have good knowledge and understanding of trading derivatives and the relevant risks, particularly margin trading.

Leverage

One of the reasons that traders are attracted to the forex and CFD markets is the high degree of available leverage. Leverage is the use of borrowed funds to increase the size of your trading positions beyond what would be possible using only the cash in your account.

Spread betting, CFD and corporate accounts offer a maximum of 1:30 leverage. This means that with an account of $1,000, you can control up to $30,000 worth of positions in the market. Traders can apply for a Professional account, which offers higher leverage, but the costs and platform are the same.

Investors designated as professionals can trade with a maximum leverage of 1:500. This means that with an account of $1,000, you can control up to $500,000 worth of positions in the market. In order to qualify for a professional account users must show a financial portfolio of over €500,000 and relevant financial experience. Professional Clients do not benefit from Negative Balance Protection and they may lose more than their invested capital.

CFD brokers such as CMC Markets offer a far higher level of leverage than other brokers, in non-derivative markets. Take for example a standard stock broker. Most stock brokers do not offer leverage of more than 1:2 (50% margin). You can see the massive difference between leverage of 1:2 and 1:30, not to mention the 1:500 leverage available for clients designated as professionals. Herein lies the large risk (and, yes, opportunity) in trading CFDs.

Leverage is often described as a ‘double-edged sword’ as it can hurt you as much as it helps you. Traders must remember that it can amplify both their profits and their losses.

Demo Accounts

CMC Markets offers a free demo trading account, on both the Next Generation Platform and MetaTrader 4. This is especially important for beginners as it enables them to practice their strategies and get comfortable with the trading platform without risking any real money.

The demo account features live quotes and simulates live market conditions in all the markets offered by CMC Markets, such as forex and CFDs on commodities, indices and stocks. Once you have got up to speed on a demo account, you can easily switch over to a live account.

Islamic Accounts

CMC Markets does not offer swap-free Islamic accounts.

Supported Countries

CMC Markets accepts clients from the majority of countries globally. This includes Belgium, Bulgaria, Denmark, Germany, Estonia, Finland, France, Greece, Ireland, Italy, Croatia, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Austria, Poland, Portugal, Romania, Sweden, Slovakia, Slovenia, Spain, Czech Republic, Hungary, Cyprus, Liechtenstein, Iceland and Norway.

Like most CFD brokers, they do not accept clients from the United States or from FATF (Financial Action Task Force) blacklisted countries North Korea and Iran.

Research

Market insights are provided throughout the day on the Next Generation Platform, with a variety of different reports, including:

• Morning call. This brief report takes a look at the news stories and economic data that could move the market in the day ahead.
• Intraday insights. This recaps the results of important economic releases and other news.
• Evening call. A more in depth report covering the major stories of the day. Analysis is broken down by region (US and Europe) and by market (fx and commodities).
• Breaking news. Covers market moving news such as earnings releases and the reaction to it.
• Price mover. This report focuses on trading instruments that are making big moves that day. Particularly useful to day traders, who often look for opportunities in markets experiencing unusual short term volatility.

The blog on the CMC Markets website is also frequently updated, with roughly five economic and market news stories posted per day. These stories range from in depth analysis of specific stocks, indices and sectors to forecasts of how upcoming economic data could impact the market.

Video content (CMC TV), which is hosted on YouTube, includes live coverage of headline economic events such as Non-farm Payrolls, central bank meetings and major earnings releases. These video sessions range from roughly 30 to 45 minutes in length and also include technical analysis of the relevant charts.

Third-party research from Reuters and Morningstar is also available for clients with live accounts.

Education

Educational articles on the website such as ‘How to Trade Bitcoin’ and ‘What is a trailing stop order?’ help to guide traders. Webinars cater to both beginners and experienced traders and cover topics ranging from the outlook for the global markets to making the most of the Next Generation trading platform. The Artful Trader Podcast features interviews with industry experts and coverage of topics such as trading psychology.

The Bottom Line

CMC Markets is a pioneer and a market leader in the forex and CFD industry. They offer stability in that they are a large, extensively regulated company that is also publicly traded. Their proprietary Next Generation platform has advanced functionality as well as an attractive, user friendly interface.

The depth of the product catalogue places this broker in an elite group and active traders especially will appreciate the tight spreads available. Education and research offerings are strong and customer service, while not always the fastest, is reliable.

These factors make CMC Markets an all around winner and an appealing choice for both beginners and advanced traders.

FAQ