CFD Broker Summary
CMC Markets, a UK based CFD provider is a newer company that has seen a relatively strong rise in popularity since it began offering its services. Given that most of the company’s growth has been directed toward individual retail users, some of the approaches used are unique and CMC attempts to create unique trading products to stay ahead of its competitors. Some of these approaches can be seen in their fractional CFD trading, portfolio mixers and reductions in commission charges and these innovations are helping CMC Markets become one of the most well known competitors in the industry.
Trading Markets Offered
CMC Markets divides its tradable CFD assets into 4 main categories to include: forex, commodities, stock indices, and individual shares. CMC places much of its focus on trading costs (where is it making great strides to be an industry leader), with commission charges of 0.05%. The interesting aspect here is that there is no minimum charge, which is relatively unique (IG markets charges a minimum of 10 British Pounds, with a commission percentage of 0.10%).
The trading flexibility can also be seen in the fractional CFD position sizes where positions can be established with as little as 1/1000 of a traditional unit size. This allows for more conservative position sizes and it is very surprising that more brokers have not started to allow for these types of position sizes. Here, CMC is clearly ahead as this without a doubt is the future of the industry.
The CFD platform that is used by CMC clients is a web based program, which has a nice, clear design. No downloads are required for the trading station, so your trades can be accessed from any computer. All of the common mobile app components are made available but there is little to distinguish the platform from others available from CMC’s more well known competitors.
CMC’s main weakness, perhaps, is its lack of special offers that are available for new clients. Instead, they look to attract traders with free educational tools and competitive spreads. CMC Markets seem to assume that traders will understand that low spreads will be more of a benefit over the long term, but this depends on a higher number of trading transactions to have a real effect.
CMC offers free educational tools that are mostly catered to new traders. . The guides are simple, focusing on five central areas: Financial Markets, Trading Mistakes to Avoid, Company Fundamentals, Economic Announcements, Support and Resistance, Trading Plans, and Trend lines. Some would argue that these areas do cover the main points for new traders, but there is not much here for advanced traders to gain additional insights.
The CFD charting package used by CMC clients is well-designed and stylish in appearance but it offers little in the way of innovation for technical analysis traders. All of the mobile charting apps that have become the industry standard are available here but CMC offers advanced features that do not live up to the name. Indicators are not customizable and there is no Backtesting feature, which makes the charting package nice to look at but of little value to chartists.
Site Strengths/ Weaknesses
Site strengths are clearly seen in the fractional position sizes, as this flexibility allows new traders to enter slowly into the CFD trading world. This also makes it easier for trader to separate positions in different asset classes. CMC is one of the few companies to offer this type of trade size and this is helping CMC to establish itself as one of the innovation leaders in the industry. Trading fees are also a major positive, as CMC looks to limit these as much as possible. Weaknesses can be seen in lack of opening incentives and in their funding requirements, which are less flexible than some other CFDs brokers.
What CMC Markets lacks in experience and reputation, the platform does make up for in spread accommodation and trading size flexibility. For traders looking to focus on common markets (with high liquidity levels) CMC is an excellent choice in that the company’s main goal looks to be lowering its trading costs. Flexible lot sizes also make trades easier to execute for traders with limited account sizes.