CMC Markets is a well-established, publicly traded broker that is based in the United Kingdom. It was established in 1989 and has adapted successfully to the constantly-changing landscape of online brokerages.
It is listed on the London Stock Exchange and combined with having a long track record along with being regulated by top-tier regulatory bodies, it is a reflection of the reliability of CMC Markets.
CMC Markets has a flagship platform known as “Next Generation” and it is web-based and filled with many features. CMC Markets gives traders access to a wide range of offerings including CFDs and spread betting across various asset classes.
The broker also offers traders competitive spreads which are dynamic as they increase or decrease according to the trade-sizes. Furthermore, clients’ accounts enjoy a full negative balance protection.
This review will be examining all aspects of CMC Markets, and try to provide detailed information on their mode of operation and the quality of their service.
Key Facts About CMC Markets
|🏢 HQ||United Kingdom|
|⚖️ Regulation||FCA, ASIC, BaFIN, IIROC, FMA, MAS|
|🖥️ Platforms||Next Generation, MT4|
|💳 Min. deposit||0|
|💰 Base currencies||Various|
|🔑 Type of broker||Market Maker|
|💸 Leverage||Up to 1:30|
Pros & Cons
- Multiple tier-1 regulators
- A massive offering of instruments
- Great for advanced traders
- Guaranteed stop-loss function
- Great news/analysis offering
- No platform suitable for inexperienced traders
- Fees not covered for international bank withdrawals
- No copy trading solution
- Minimum commission on share-CFDs
- Massive spread widening & fake spikes
- Platform freezes
The process of opening an account is completely digital and there is no minimum deposit requirement which is perfect for those that wish to start trading with lower amounts.
The account verification does not take more than 1-2 business days.
The steps of opening an account with CMC Markets are highlighted below:
- Choose your country of residence, type of account, and account base currency
- Fill in your personal details such as your name, date of birth, residential address, phone number, and email address.
- Answer some questions about your employment status and trading experience after which you click ‘Submit’ (standard questions).
- An email link to a third-party video identification service will then be sent to you where you will be required to show yourself and your ID documents (such as a passport, driver’s license, or national ID card) via webcam to an operator.
- You will then be required to forward a utility bill, bank statement, or credit card statement in order to verify your residential address.
- Once your application has been verified by CMC Markets and you have agreed to the terms and conditions, you can begin to trade.
Regulation & Security
CMC Markets is a highly regulated broker around the world as its regulation starts in the United Kingdom where its headquarters are located. It is regulated there by the Financial Conduct Authority (FCA) which is a top-tier regulatory body in the United Kingdom. CMC has the operating license number 173730.
In Germany and generally in the European Union, it is regulated by the German Supervisory authority known as Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin).
Other regulatory bodies that this broker is subjected to globally include the Investment Industry Regulatory Organization of Canada (IIROC), the Australian Securities and Investment Commission (ASIC), the Financial Markets Authority (FMA) in New Zealand, and the Monetary Authority of Singapore (MAS).
Clients’ funds are held in separate bank accounts with reputable banks apart from the funds of CMC Markets which means CMC Markets can never tamper with clients’ funds.
To ensure the proper handling of customer deposits, CMC Markets undergoes annual auditing by its auditors of which the results are submitted to the regulator.
In the UK, a stand-alone statement of client money asset returns (CMARs) is made available to the regulator every month to demonstrate compliance with the industry standard in terms of the company’s treatment of customer deposits.
In the unlikely event that CMC Markets experiences bankruptcy, customers will get their deposits from the separately managed bank accounts minus the administrative costs of distributing and processing the funds. This further attests to the company’s efforts in ensuring that clients’ funds are safe.
In terms of security, the company maintains a strict privacy and security policy that prevents clients’ information from being made available to third parties.
There is also a two-factor authentication when clients want to access their accounts which makes it very difficult for such accounts to be hacked. It typically involves the clients receiving one-time passwords (commonly known as OTPs) via SMS or a mobile app.
Deposit and withdrawal
There are various deposit and withdrawal options as well as CFD account base currencies that customers can use. Withdrawals are usually free except if it is same-day or international bank withdrawals.
Deposit fees and options
CMC Markets does not charge deposit fees and the options for depositing funds include credit and debit cards, bank transfer, and electronic wallets such as PayPal.
Payments done via debit/credit card and PayPal are immediate while those made via bank transfers can take several business days. It should be noted that clients can only deposit money from accounts that are registered in their own names.
Withdrawal fees and options
There are no withdrawal fees charged when clients make withdrawals via any of the following means: credit/debit card, domestic bank, or electronic wallet.
However, if the client is interested in receiving his or her funds immediately (via bank transfer) or uses an international bank transfer, then withdrawal is accompanied by a £15/$25/€15 charge depending on the client’s account base currency.
An international bank transfer at CMC Markets is defined as the withdrawal of money into a bank account that is denominated in a currency other than the base currency of a client’s account with CMC markets.
For example, if the client withdraws from a GBP-based brokerage account into a EUR-based bank account, then the requisite fees will be charged.
The same options used for deposit can be used for withdrawal as well but there are some limitations: if the client has a spread betting account, it is impossible to withdraw to Mastercard debit/credit cards; also the client cannot make a withdrawal into his or her PayPal account that exceeds the amount that was first deposited.
How to make deposits or withdrawals on CMC Markets
- Log on to CMC’s web trading platform
- On the left sidebar, click on ‘Funding’
- Click ‘Add Funds’ or Withdraw’ depending on the transaction you want to execute
- Select the method for deposit or withdrawal
- Add the amount you want to deposit or withdraw
- Confirm your deposit or withdrawal
The leverage rate with CMC Markets is determined by the instrument (EUR/USD, Gold) and asset class (forex, indices, and commodities). The table below depicts the leverage for each asset class offered by CMC Markets:
There are two major account types offered by CMC Markets and they differ based on the countries where they are accessible, the range of accepted account base currencies as well as the pricing and taxes.
Additionally, clients can open a Pro account which gives them access to higher leverage. The Pro accounts are reserved exclusively for professional clients which means the higher degree of protection that is available to retail clients is not available to them. This including the negative balance protection.
This is why the Pro account is not made available to just anybody and there are specific criteria that need to be met before a client can open a Pro account with CMC Markets.
The criteria’s are:
- The client must have placed ten relevant trades of significant size in the previous quarter
- The client’s portfolio must exceed €500,000
- The client must have worked in the financial sector for a minimum of one year
2 of these criteria’s need to be met for clients to be able to be classified as so-called elective professional clients (EPC’s).
CMC Markets offers the popular trading platform known as MetaTrader4 and its own proprietary trading platform known as ‘Next Generation’.
Along with the web trading platforms is also the mobile trading platform.
Web trading platform
This section of the review will be focusing on CMC Markets’ proprietary trading platform known as Next Generation.
The trading platform is available in nine different languages:
English, Chinese, French, Swedish, German, Polish, Spanish, Norwegian, and Italian.
The platform guide makes it easier for beginners to use along with user-friendliness and great design.
The web trading platform is highly customizable as clients can save up to ten custom platform templates. There is a secure two-step authentication to log in along with an efficient search function.
The search function can be utilized by either typing the name of the asset in the search bar or by browsing product categories of which the results can then be filtered by region, industry, or country.
There are many order types that traders can utilize such as market orders, limit orders, stop orders, trailing stop-loss orders, and guaranteed stop-loss orders.
This platform enables CMC Markets to provide portfolio and fee reports that are clear and transparent.
Mobile trading platform
The CMC Markets app also features the strengths of the web platform: a sophisticated design with an excellent order panel and search function as well as a two-step login to ensure security.
It is also user-friendly and is available in the same number of languages as the web trading platform. It is also very well-designed which makes it easy to locate all the available features.
CMC Markets is majorly a CFD and forex broker which means clients who wish to trade CFDs of currency pairs, stock indices, ETFs, commodities, bonds, stocks, or cryptos will find an incredible array of products to choose from.
Currently, there are more then 300 currency pairs available with CMC Markets along with 10,000 stock CFDs, 88 stock index CFDs, 1,000 ETF CFDs, 123 commodity CFDs, 55 bond CFDs and 15 cryptos for trading.
It should be noted that it is impossible to adjust leverage levels at CMC Markets and this can be a drawback because being able to adjust leverage can be useful when trying to reduce the risk of a particular trade. This is another reason why clients have to be careful with forex and CFD trading as the preset leverage levels may be too high.
Fees and Spread
CMC Markets is a pricy broker trading against their clients!
CMC Markets offers forex and stock indices. Fees and spreads are on the high side, -and this combined with slippage and a trading platform that typically freezes up and widens the spreads massively during the slightest turmoil in the markets makes it a broker we cannot recommend…
Trading under these conditions creates fake spikes, -resulting in clients being stopped out under false presences.
Also target spreads are unfortunately not often seen in real trading with CMC Markets.
The customer support at CMC Markets is impressive with the quickness and reliability with which emails and inquiries are answered within a day. There are three options by which customer support can be contacted via:
- Live chat
CMC Markets customer support is operational in nine languages just like the number of languages in which the proprietary web trading platform is available.
The only snag is the lack of 24/7 availability as customer support is only available 24 hours a day from Monday to Friday.
However, the 24-hour availability still makes it immensely helpful to clients around the world.
Education and Research
CMC Markets has a wide array of educational materials which include articles and videos. There are also trading lessons and platform tutorials to help provide traders with additional knowledge.
The following types of educational materials are available at CMC Markets:
- Platform tutorial videos
- Stellar educational articles
- General educational videos
- Demo account
CMC Markets offers a demo account which is an imitation of the live platform and all its functions. It gives traders, especially beginners, the opportunity to familiarize themselves with the platform and the financial markets.
It serves as a learning ground without the traders having to worry about the risk of losing money since the funds used on a demo account are virtual and traders can always add more once they run out of virtual funds.
The videos are made by the experts of CMC Markets and sometimes, the company organizes live webinars and regional seminars to educate traders.
The articles on the platform are easy to read along with support from short videos and graphs to provide traders with a better understanding of intricate financial concepts.
The company also recommends articles based on the client’s trading experience, with topics ranging from fundamentals of CFD to trading strategies.
CMC Markets also provides research tools for clients whether they are beginners or advanced traders and most of the research tools are available on the company’s ‘Next Generation’ web platform.
An example of the research tool is fundamental data analysis which is made available through Morningstar reports.
Every client with a live account can access these reports which are regularly updated and also incorporate quantitative research as well as critical information from annual financial statements.
Another research tool is charting tools and CMC Markets has an incredible selection of over 80 technical indicators along with other multiple editor tools.
There are also some additional features such as automatic drawing tools and the option to save one’s favorite charts.
Clients can also share their technical analysis with fellow traders which is something that sets CMC Markets apart from other brokers.
CMC Markets has different trading features which are beneficial to all their clients regardless of the level of trading experience.
Examples are trading ideas, newsfeed, and economic calendar.
This is provided in many forms and one of such is referred to as ‘Insights’ which involves the collection of market-related information by CMC Markets and then comparing it with market speculation. It functions more like an information service.
Another form of trading ideas is ‘Chart Forums’. When clients open this, they will find some short technical analyses and speculations by CMC experts and fellow CMC users. It is similar to social trading because people get to share their chart analyses with one another.
CMC Markets provides news along with Thomson Reuters and both are accessible via the web platform. The CMC Markets news directs clients to CMC’s ‘News and Analyses’ blog while the Thomson Reuters newsfeed opens up in a different window on the platform.
Reuters news provides updates on politics and the largest listed companies across different markets, among others.
There is also a link on the web trading platform that connects users to CMC TV which is a YouTube channel where several updates on market movements are released by CMC every week while also providing technical analysis.
This is a well-structured tool that is powered by Thomson Reuters and provides a list of the most crucial data releases for each day.
Each event is assigned a ‘market impact’ meter denoting the effect it might have on financial markets while also linking to previous and forecasted data for each indicator.
These events can be filtered by date, country, or market impact. Clients can also decide to set up separate alarms for these events.
CMC Markets adopts a people-centric business model in which there is a continuous focus on excellent client service to ensure that clients enjoy a superior trading experience as much as possible.
Part of the business model is to provide long-term value to new and existing clients through competitive product offerings along with sophisticated technology and operational efficiency.
Through substantial investment in technological infrastructure, CMC Markets is able to offer its clients the ability to be in complete control of their financial investments. The CMC Markets platform was built to support this level of control and flexibility.
Also, the firm continues to invest heavily in the development of the Next Generation and the stockbroking platforms to ensure that it maintains its position as a leading broker in the industry through the consistent delivery of state-of-the-art innovations.
CMC Markets acts as a counterparty to clients’ orders through a Market-Making model, and this is not ideal from a clients perspective. The broker is incentivized by clients loosing does in our experience not work out well for clients of CMC Markets…
Our experience with CMC Markets
When we tried reaching out to customer support, the services were quick and reliable. Live chat was constantly responsive while also providing us with pertinent and clear answers within a short period. Phone support was also amazing as waiting periods were short with the operators speaking in a distinct and understandable voice.
The problem we have with CMC Markets is that they are to pricy, they trade against their clients, the platform makes it very often not able to enter or exit positions due to the broker ‘freezing’ trade and widening spreads far beyond anything reasonable…
The History behind CMC Markets
The company was founded in 1989 by Peter Cruddas and it has crossed many milestones in more than three decades of existence which has turned it into a global leader in online retail trading.
It started as “Currency Management Corporation” (which was then abbreviated to CMC later) in London where it then began trading as an FX broker before experiencing rapid growth.
The first milestone was in 1996 when it launched the first online retail FX trading platform in the world thus giving its clients the chance to benefit from markets where accessibility was only limited to institutional traders.
The next milestone was in 2000 when CMC Markets expanded into CFD brokerage which was swiftly followed by a launch of an online financial spread betting service in the year 2001.
The first overseas branch of CMC Markets was opened in 2002 in Sydney, and five years later, additional offices had been opened in Germany, Singapore, Canada, New Zealand, and Sweden.
Over the next few years, the company did not slow down but continued its global expansion as more offices were opened in France, Spain, Italy, and Norway thus taking the number of offices around the globe to 12.
In 2010, the company launched Next Generation, an award-winning trading platform that has been functional across all the regions where the company is operational while being constantly updated with new features, tools, and enhancements.
The company celebrated 25 years of existence in 2014, a year in which it received a record number of awards in the UK recognizing the stellar quality shown by its Next Generation trading platform and associated services.
The company has continued to grow since then with the goal of delivering excellent service to its clients.
Conclusion and Verdict
CMC Markets is a good broker in terms of regulatory security and safety of funds. CMC Markets is supervised by top-tier regulators in major regions of the world which attests to its safety and credibility.
The negative balance protection provides retail clients with some level of assurance while the transparency of operation means there are no hidden costs and clients can easily calculate the cost of executing a particular trade.
There is also no minimum deposit requirement to open an account which makes the process less complicated as clients can take their time before depositing funds at whichever rate they want.
Unfortunately the trading platform is not really suitable for beginners, -as it is far to complex and not intuitive enough.
However, the main problem with CMC Markets is that the broker is far to expensive and not client friendly. CMC trades against its clients profiting from their losses and our trading experience with CMC shows that this is very unfortunate.
If you are interested in trading the financial markets, then CMC Markets is a brokerage you might want avoid…