CMC Markets

A Review Of CMC Markets

Ranking Summary

Overall Ranking: 3.76 stars out of 5

Ease Of Use: 3.8 stars out of 5

Costs: 3.5 stars out of 5

Educational Resources & Customer Support: 4.9 stars out of 5

Research & Analysis Tools 2.3 stars out of 5

Range Of Product Offerings: 4.3 stars out of 5

Summary: A respected platform, offering a range of investment opportunities and good educational and customer support resources.

Recommended For:  Not recommended for US Traders (you’re not allowed on the platform).  Provisionally recommended for everyone else (see notes in review).

Introduction

Founded in the United Kingdom in 1989, CMC Markets has grown to become one of the leading Forex brokers on the planet, and offers a range of other services besides.

The company is listed on the London Stock Exchange under the ticker ‘CMCX’ and is regulated the FCA (Financial Conduct Authority), which helps to ensure that market practices are fair across the board, which is an important element in maintaining the company’s credibility with traders around the world.

Unfortunately, as is the case with many Forex brokers, CMC Markets does not accept US clients.

Is this company a good fit for you?  Provided that you don’t live in the US, the answer “maybe,” and in the sections that follow, we’ll step you through everything CMC Markets has to offer so you’ll have a clear understanding of the opportunity CMC represents.

In the same breath, we’ll also be sure to point out where the company falters.  Make no mistake, although they have built an excellent platform, they’re not perfect and it’s important that you understand where the platform is weakest so you can make an informed decision.

If that sounds good to you, read on and let’s take a closer look.

Ease Of Use (3.8 stars out of 5)

CMC is (relatively) easy to use, but there’s an important catch.  They’ve actually got two different platforms, one called MT 4 (which stands for MetaTrader 4) and their Next Generation interfact.

The MT4 interface is the company’s web-based option, while the NextGen interface is designed as an app for Android and iOS devices.

Unfortunately, the two interfaces offer different capabilities.  Just to give one example, if you want to be able to do back testing, then you’ve got to use the web-based interface.  The capability simply doesn’t exist on the Next Gen side of things.

Worse, if you read the company’s disclosures closely, you’ll find that the two offered platforms can display different spreads for identical instruments, which means you’ve ultimately got to use both to be sure you’re getting the best spread possible.

Long story short:  If you want to get the most out of CMC Markets, you’ll need to resign yourself to learning two different platforms and using them both regularly.

That’s not the end of the world, but it does increase the slope of the learning curve, because both platforms offer very different navigation, and the Next Gen platform is notably less feature rich.

The company does offer an API though, so given time, you can customize and refine either or both platforms so you can use them more intuitively.

Both interfaces do offer the basics, and you’ll find three order types on offer:

  • Market – This works exactly as you think it would, allowing you to buy or sell at the prevailing market rate.
  • Stop – Again, this is pretty self-explanatory. It’s a pending order type that allows you to set a point either above or below the current market price (depending on whether you’re buying or selling).  If you issue a stop, you may also set an expiration time, giving it a pre-determined shelf life.
  • And Limit – This is a pending order type, allowing you to put a virtual stake in the ground either above or below the current market price (depending on whether you’re planning to buy or sell). As with a Stop order, if you issue a limit order, you may also set an expiration time if you wish.

If you’re using the Next Gen interface, you have the option of attaching a “stop loss” or “take profit” condition, and where pending orders are concerned, you can choose both trailing and/or guaranteed options when placing the order.  The Next Gen interface is also very chart-focused and allows you to generate customized alerts via email or push notification.

In addition to that, you’ll find negative balance protection on both platforms, and world-class security, including two-factor authentication (both platforms) and biometric security (Next Gen).

Although navigation can be a bit tricky and it will take some time to get up to speed on two different platforms, there’s a lot to like about them.

You’ll find advanced charting capabilities with a dozen different chart types and more than 30 different drawing tools, along with over a hundred indicators and overlays.

You also have access to a streaming Reuters feed, and gain easy access to price projection tools, along with a built-in connection to  CMC Market’s bustling forum, which gives you near-instant access to a wide range of expertise.

Finally, if you’re a researcher at heart, you’ll love how easy it is to get detailed price histories that go back decades on all major instruments.  That alone is worth its weight in gold!

Costs (3.5 stars out of 5)

In terms of costs, CMC Markets is definitely competitive, but there are some potential gotchas.  For example, Guaranteed Stop Loss functionality is available, but only on the Next Gen platform, and you’ll have to pay an added fee for it.

Also, it’s worth pointing out that CMC’s costs aren’t as transparent as they could be because the company uses a “dynamic spread,” which increases or decreases based on the size of your order.  This can make planning and a deep understanding of exactly what you’re paying for a bit of a challenge.

There are also a few areas where the costs seem unusually high.  For instance, if you’re investing in the S&P 500 CFD, you’ll find a colossal 5-point spread, which is far above the norm.

Overall though, you’ll find the prices to be competitive, but you do have to watch and read closely so you understand exactly what you’re getting into and how much it’s going to cost you.

One final thing to note here is that CMC Markets doesn’t have a minimum deposit requirement when opening a new account. 

That’s a good thing because it allows anyone (well, anyone not living in the US, at least) to open an account and try their hand at investing.  In practice then, your minimum deposit will be some amount equal to the margin requirements associated with whatever trade you’re making.  You can thus set your own minimum deposit requirements here.

One final note:  The inactivity fee kicks in after just 12 months of no trading activity and is 10-pounds a month, which is hefty.

Educational Resources & Customer Support (4.9 stars out of 5)

This is something that CMC Markets does better than just about anyone.  CMC’s reference library is best in class, and if you’re just starting out, this should be your first stop so you can get up to speed quickly and get your “investing sea legs.”

The educational resources aren’t just for beginners though.  Even seasoned traders will find gold here, but there’s a catch:  There’s no site-search function, so finding what you’re looking for can be a bit of a grind.  This, more than anything, is why we couldn’t give CMC a perfect 5-star rating in this section.

Customer service and support is another area where CMC is almost perfect.  They offer 24 hour phone support every weekday, in addition to their vast support library and extensive FAQ.

Our recommendation would be to start with the FAQ, then venture to the support library, and if you still can’t find the answer to whatever question you have, pick up the phone.  The company maintains more than a dozen satellite offices on four continents and maintain an active presence on both Twitter and Facebook, so help is never very far away.

Finally, note that if you’re using the Next Gen platform, there’s a built-in chat feature that can put you in touch with expert help, usually within 30-40 seconds.

Research & Analysis Tools (2.3 stars out of 5)

Every company has an Achilles’ Heel, and for CMC, this would be it.  You’ll find relatively slim picking here.  In fact, the Next Gen app doesn’t even let you examine your own trading activity, though you will find back testing capability on the MT 4 platform, which is a plus. 

Honestly, it’s almost as though the platform isn’t yet “finished,” and the developers are simply waiting until some later date to include an analytics section, except we know that’s not the case. 

Other than the aforementioned back testing, the other saving grace is the fact that, as we mentioned earlier, the NextGen platform offers easy access to detailed price histories, but again, this underscores the idea that if you want to get the most out of the platform, you’re pretty much going to have to use both Next Gen and MT 4.

In any event, this is a genuine point of weakness and if you’re looking for a platform that offers a lot of research and analysis tools, CMC is definitely not the platform for you.

Range Of Product Offerings (4.3 stars out of 5)

While CMC has worked hard to expand beyond their Forex roots, you won’t find quite as much here as you do on other platforms.  Here’s a quick overview of the kinds of markets you can trade in:

  • Nearly a hundred indices
  • 9000+ ETFs and Shares
  • More than a hundred commodities
  • 50+ Treasuries
  • 330 FX pairs
  • And a dozen different cryptocurrencies with more being added at irregular intervals

Again, this isn’t bad any means, but it’s not best in class either.  Ultimately, how good a fit this platform is for you will depend on exactly what you’re interested in investing in.

Pros And Cons

CMC Markets gets a lot right, but they miss the boat in a couple of key areas too, with their biggest failing being the fact that you’ve essentially got to master the use of two different platforms in order to get the most out of CMC’s offering.  That’s twice the work for a platform that doesn’t give you as many options as others.

Overall then, here’s what you’ll be contending with:

  • You’ll essentially have to learn to use both the MT 4 and Next Gen platforms to get the most out of CMC Markets.
  • There are a few “gotchas” where fees are concerned, although most are competitive
  • US Investors aren’t invited to the party
  • And you’ll only find a modest set of research and analysis tools.

Conclusion

CMC Markets is a good choice for some investors, but the bit about having to learn two different platforms is the kiss of death for us.  On that basis, even though we acknowledge that they are a good choice for some investors, we can’t recommend them.