CMC Markets Review: Renowned Broker from London
CMC Markets is a CFD and Forex broker based in London. The company has been active on the market since 1989, wherefore traders can rely on the expertise that this broker is known for. Anyone wishing to open an account at CMC Markets can benefit from the very low minimum deposits. You can start trading at as little as €0.01. In addition, the low spread, which starts with 0.7 pips for currencies, will also win you over. Indices and commodities are even tradable at 0.3 pips. In addition, CMC Markets stands out from the competition through a comprehensive training offering and the NextGeneration trading platform.
CMC Markets Review: Pros & Cons
- British regulation and deposit guarantee
- Trading via the NextGeneration trading platform
- More than 10,000 underlying assets
- No minimum deposit
- Comprehensive training offering
- Branch office in Frankfurt am Main
- No safe exclusion of additional margin-call obligations
- Commission for stock CFDs
Broker Test: Our CMC Market Review
1. Trading Conditions: Competitive Spreads and Commission for Stocks
- EUR/USD: typical spread at 1 pip, minimum spread at 0.7 pips
- DAX: typical spread at 1.3 pips, minimal spread at 1 pip
- Gold: typical spread at 0.5 pips, minimal spread at 0.3 pips
CMC Markets settles the bulk of trading costs via the so-called spread. This is the difference between the purchase price and sales price of a position. The exact amount depends on both the asset class and the specific underlying asset. In addition, the trading period influences the degree of market liquidity and thus also the spread. Overall, CMC Markets was able to win us over with its favourable trading conditions. An extract from the broker’s list of fees can be found below:
|Forex||From 0,7 pips|
|Indices||From 0,3 pips|
|Commodities||From 0,3 pips|
|Government Bonds||From 1 pip|
In this list, equity and ETF CFDs have not been listed on purpose. In this case, a commission is due instead of a spread. Many brokers have long since waived such commissions and bill stock CFDs via a spread. However, CMC Markets has not yet decided to make this change.
In principle, between 0.06% and 0.18% of the trading volume is due as a commission. The exact amount depends on market. Therein, trading on the German market is possible at a commission of 0.08%, while anyone who wants to buy shares from Hong Kong pays a commission of 0.18%. It should also be noted that CMC Markets requires a minimum fee. This fee is also dependent on the chosen market and usually amounts to between €5 and €15.
Additional costs are only incurred when trading positions are held overnight. CMC Markets always calculates the holding costs on the basis of daily reference interest rates. Account fees are not charged. An inactivity fee is payable only if traders do not open new trading positions for more than two years. In this case, CMC Markets requires a fee of €10 per month, which is automatically debited from the customer’s account.
2. Underlying Assets/ Trading Platform Offering: Forex, Government Bonds, Stocks, Indices, and Commodities
Above all, CMC Markets is a highly recommended broker because the company provides more than 10,000 underlying assets from five different asset classes for trading. The broker’s detailed product offering looks a little something like this:
- Equities and ETFs
More than 9,000 trading instruments are part of the equities category alone. This is where traders can find many known companies such as Google, Amazon, or Apple. But there is also great diversity in the regional markets. In addition to the DAX companies, traders can trade more companies from Germany and thus rely on growth companies.
More than 90 indices are part of this broker’s offering. Once again, traders can trade all known underlying assets. At the same time, CMC Markets offers the opportunity to trade in emerging markets. In particular, this is possible via indices from the Asian region.
Well over 300 currency pairs are tradable at CMC Markets. This allows traders to trade virtually all currencies that are in demand around the world. First and foremost, these are major currency pairs consisting of the EUR, USD, Japanese Yen, British Pound, or the Swiss Franc. However, currencies with lower demand such as the Norwegian Krone or the Australian Dollar can also be combined with numerous other currencies.
With over 100 commodities, CMC Markets covers the entire commodities market. In addition to classics such as gold, crude oil, and silver, traders can also trade more exotic products. These include coffee or wheat. The advantage: The development of the value of raw materials is not always directly linked to the other financial markets. In part, there is a high industrial demand, which influences the prices.
- Government Bonds
Not all CFD brokers allow for the trading of government bonds. At CMC Markets, traders have access to over 50 different underlying assets. It is possible to trade safe interest rates, such as when trading German or American government bonds. At the same time, more risky bonds are also available – especially from South-East Europe.
3. Order Functions of the Trading Platform: Standard Order Types Are Available
If you are new to CFD and FX trading, you should pay attention to the available order types when comparing various brokers. After all, doing so can limit your losses and allow you to develop complex trading strategies. The standardized order supplements are especially important. The NextGeneration platform is used for trading at CMC Markets. The following order types are offered:
- Take profit
- Stop Entry
- Stop Loss and Guaranteed Stop Loss
- Trailing Stop
In addition, it is possible to link entry and stop loss as well as take profit orders. In principle, traders at CMC Markets can use quite a few order additions. In particular, the use of a guaranteed stop loss is important. This ensures that the broker sells a position at a specific price. Especially in volatile market phases, possible losses can thus be limited. However, it must be added that the number of order additions is slightly higher for some competitors. In particular, additional features such as One-Cancels-Other are not available at CMC Markets whatsoever.
4. Analysis Functions of the Trading Platform: Chart Intervals, Over 80 Technical Indicators and Drawing Tools, Historical Market Rates
The analysis of charts is easily possible at CMC Markets thanks to extensive selection of analysis tools. The number of different chart types is very convincing. Line charts, candlestick, or OHLC charts are available. It is also possible to choose from Kagi, line break, and Renko charts. Take a detailed look at the other analysis tools below.
- Technical Indicators
Trader können bei CMC Markets allen über 70 technische Indikatoren nutzen. Dazu zählen etwa MACD, RSI, Ichimoku-Wolken oder Bollinger Bands. Über diese lassen sich wichtige Preislevels, Trendumkehrungen und Trading-Möglichkeiten erkennen.
- Drawing Tools
The technical indicators are supported by a total of 24 drawing tools. These can be used to draw help and resistance levels, create notes in the charts, and highlight important patterns.
The timeline of the chart can be set extremely flexibly at CMC Markets. From one second to one month, all market rate movements will be displayed as part of the chart.
- Historical Market Rates
In the case of particularly important underlying assets, traders have the opportunity to track the price development for the last 20 years.
- Individual Adaptability
At CMC Markets, traders create their own layouts. The charts and technical indicators can also be arranged as desired. This enhances efficiency, because all functions are exactly where the trader wants them to be.
- Trading via These Charts
Anyone that identifies trading opportunities at CMC Markets can then take advantage of these opportunities straight from the chart. To do this, just click on the real-time rate, which opens an order window. The trade can then be placed right away.
CMC Markets Guide:
5. Regulation, Deposit Guarantee, and Risk Limitation: FCA & BaFin
CMC Markets is headquartered in London. From here, the entire business is managed, wherefore the individual accounts are managed on the island as well. Although there is a branch office in Frankfurt am Main, this branch only focuses on sales and customer service activities.
For all traders, this results in a special feature with regard to the capital income tax. CMC Markets does not automatically transfer this tax to the German or respective foreign tax office. Each trader is responsible for doing so. In the context of doing one’s income tax return, the profits from trading at CMC Markets thus have to be declared.
The following points are particularly relevant in regards to safety at CMC Markets:
The UK regulatory environment is a major plus in our CMC Markets review. After all, the FCA is considered to be extremely strict and accurate. The regulation is much more thorough than is the case in Cyprus, for example.
Although it is only a branch office, the location in Frankfurt am Main is also monitored. Here, the German BaFin ensures that CMC Markets adheres to all current laws for financial service providers.
CMC Markets keeps customer and company assets strictly separate from each other. Even in the unlikely event of the broker declaring bankruptcy, the customer deposits would be absolutely secure. After all, the customer deposits are considered so-called special assets, to which creditors have no access.
Our evaluation regarding the possibility of a margin-call obligation is a con in our CMC Markets review. By way of a risk disclosure statement, the broker declares that negative account balances are possible. Thus, losses from trading positions may exceed the account balance. However, during the crisis surrounding the Swiss Franc, CMC Markets did not ask its customers for any such margin-call payments. Yet, this was not due to the broker wanting to please its customers, but due to price quotation inconsistencies.
6. Automated Trading: Pattern Recognition, Automatic Order Execution
Both beginners and professional traders are increasingly interested in automated trading. For this reason, a CMC Markets review also has to more closely analyse this aspect of trading. First of all, we would like to note that chart patterns can automatically be recognized by the trading platform. If a trader uses these tools to do so, the software completely takes over.
The execution of orders is fully automated. Traders need not intervene in the process at any time, wherefore a lot of time can be saved when trading. But: Unlike the competition, CMC Markets does not offer Expert Advisor (EA). Currently, this feature is only available through MetaTrader 4, which traders cannot access at CMC Markets.
7. Account Opening and Minimum Deposit: From €0
In contrast to many competitors, CMC Markets offers one account type for classic CFD trading. Traders do not have to decide which functions they want to use. Instead, the broker's entire offer is available to every trader. The account opening process itself requires 4 simple steps and does not come with any surprises:
- Interested traders visit the company's website. Here, you will find a button that is labelled “Open Account” in the upper right corner. Press this button and select the “Live Account” next.
- CMC Markets asks its customers for comparatively extensive data on their person. This includes, in particular, information on your assets. The broker would like to prevent illiquid customers from trading CFDs and possibly getting into financial difficulties. Once the forms have been filled, traders submit them to the broker at the click of a mouse.
- During the next step, CMC Markets requires a legitimation of the data. For this purpose, the broker offers both the PostIdent and the VideoIdent method. VideoIdent offers some advantages to traders because it is comparatively quick.
- Once the account has been approved, a deposit needs to be made. For making deposits, CMC Markets only offers bank transfers and credit card payments. However, no minimum deposit being required is a big plus. Traders can start trading with just €0.0.1 at CMC Markets.
8. The Brokers and Its Competitors: Active since 1989
For traders, the broker’s market position can play a role in assessing its performance. After all, long-term success indicates high customer satisfaction. In addition, large financial services providers can use a strong negotiating position with banks and other financial market participants. As a result, it is sometimes possible to achieve significantly more favourable trading conditions for their own customers.
CMC Markets has been active on the market since 1989. Since then, only financial derivatives have been offered for trading. The broker is thus one of the oldest brokers on the market. Today, the company manages several million trading accounts from traders all over the world. This indicates a high degree of customer satisfaction. In addition, the broker is well networked in the financial world because it has been trading CFDs for over 25 years.
Various competitions and award ceremonies have also confirmed that this broker is known for its customer satisfaction and expertise. In 2014 and 2015 alone, the renowned broker received more than 60 awards.
9. Additional Services and New Customer Offers: Comprehensive Educational Offering
CMC Markets attaches great importance to the continuing education of its customers. Via the in-house academy, traders have access to the extensive training materials. These materials deal with a variety of topics such as:
- Trading platform
- Technical analysis
- Fundamental analysis
- Risk management
- Trading strategies
Both beginners and advanced traders will find a variety of materials that will quickly result in noticeable learning effects. The offer itself includes videos, guidebooks, guides, webinars, and seminars. In particular, all traders can benefit from the regular webinars that are offered by this broker. They take place daily and provide its customers with new knowledge on an on-going basis. New trading strategies are presented all the time. Moreover, a corresponding live chart is available so that traders can test these new strategies right away.
In addition, CMC Markets operates Germany's first TV channel, which deals exclusively with trading. At the beginning of 2016, CMC Markets TV was launched. This channel reports on the market between 8am and 4pm daily. Once important events affect the market, the CMC Markets trading experts will comment on any such developments.
In addition, all traders can benefit from a welcome bonus at CMC Markets. A total of €200 is available to all traders when they open an account with CMC Markets. How large the traders’ first deposit is does not matter. Every trader is given this bonus. Please note that the welcome gift is subject to certain conditions. Anyone that wants to withdraw this bonus must first meet a certain minimum turnover.
10. Customer Service and Website
In regards to the available customer support, the size and experience of the broker are a definite plus. For example, the company is available around the clock – both via phone and e-mail. The hotline number is connected to the Frankfurt office. In addition, CMC Markets offers a live chat, which consists of a public chat room, where the broker’s customers can also exchange information. Therein, the broker is able to address any concerns right away because a CMC Markets agent is constantly participating in this chat.
The broker's website can also be considered a success. Translation errors – which are standard among many competitors – cannot be found at CMC Markets. Via the menus and individual icons, traders can quickly switch to the appropriate content. The broker provides extensive information on its entire offering, wherefore traders can quickly get an overview.
CONCLUSION AND FINAL CMC MARKETS EVALUATION
The broker was able to convince us given its absence of a minimum deposit, the extensive range of underlying assets, and the British regulatory environment. The broker’s additional services were also a big plus. This allows traders to take advantage of an extremely comprehensive training offering and receive a welcome gift of €200 when opening an account. The broker's biggest weak spot is that CMC Markets is still charging a commission for trading stock CFDs. The other fees – especially with respect to Forex trading – are quite impressive. Therefore, CMC Markets is a great address for all traders. Both beginners and advanced traders will be offered a more than convincing overall package.
Our CMC Markets Review Rating: A-