Table of contents:
- 1 Continued high trading activity at CMC Markets
- 1.1 Full year net operating profit could increase
- 1.2 Some brokers profit from crisis
- 1.3 CMC Markets in the FTSE 250
- 1.4 Offers for professional customers
- 1.5 Experienced customer service
- 1.6 A wealth of information and analysis
- 1.7 Risk management opportunities
- 1.8 Conclusion: CMC Markets with high trading activity
Continued high trading activity at CMC Markets
At CMC Markets, trading activity remains high, which also benefits the broker himself. The good business development continued in July and August. Extrapolated over three months, the net operating result for these two months was now slightly below the very good results in the first quarter. The strong equity trading business in Australia also contributed to this good performance. The broker can offer a wide range of CFDs and is also known for its analysis and training services.
Full year net operating profit could increase
CMC Markets’ management is confident that its net operating profit for the full year 2020/21 will exceed current market expectations due to the strong development and high diversification of its business. Operating profit is currently expected to be around £300 million and profit before tax is expected to be £137 million.
The higher revenues since the beginning of the fiscal year are mainly due to increased trading activity by existing customers. In addition, a large number of new customers were acquired. However, variable operating costs also increased as a result of this development, in particular the onboarding costs were higher. However, customer acquisition developed more efficiently. The broker intends to continue to focus on investing in technology to attract new clients, retain existing clients and drive growth.
Some brokers profit from crisis
When the corona virus spread further into Europe and the USA in spring, the financial markets experienced some turbulence. At that time, many investors wanted to become active and profit from these. In addition, thanks to home offices and the loss of many leisure activities, many people had and still have more time to take a close look at their finances. As a result, the demand for online brokers rose and there was more trading. For many brokers, not only CMC Markets, this will probably also have a positive effect on the balance sheets for 2020.
However, the competition in the industry is fierce. Traders are therefore faced with the task of comparing brokers before choosing a suitable broker. In doing so, they should not only look at and compare offers and costs, but also at other services, tools and educational opportunities. Many brokers can offer modern and innovative services here, which often set them apart from the competition.
CMC Markets in the FTSE 250
Another piece of good news for CMC Markets comes from index provider FTSE Russell. A few days ago, FTSE Russell announced changes in the composition of its FTSE indices. CMC Markets will therefore be part of the FTSE 250 from 21 September 2020. The index combines the shares of the 250 largest companies behind the shares traded in the FTSE 100 on the London Stock Exchange.
CMC Markets is one of the leading providers of online trading, but also offers platform technology solutions for institutional partners. Up to 9,600 assets can be traded via CFDs. These include foreign exchange, indices, commodities and crypto currencies as well as government bonds. For equity CFDs alone, the broker provides more than 9,000 underlying assets, including, for example, BMW or Siemens shares.
Offers for professional customers
A special feature to complement normal CFD and stock trading are countdowns, which can be traded by professional clients. The CMC Markets countdowns start at 60 seconds. A maximum payout of 85 percent is possible. For private investors, the margin starts at 3.33 percent for leverage of 1:30 maximum. For professional clients, the margin is lower, but the leverage is 1:200.
CMC Markets works with a dealing desk model without requests. Traders can also hedge their positions. In case of a guaranteed stop, fees are incurred, but these are paid back to the client if the stop was not required. Traders may hold their account with CMC Markets in Euro, Dollar, Australian Dollar or Swiss Franc. The broker’s trading offer also includes special investment opportunities such as ETF CFDs, for which there are no holding fees. These are a great way to diversify your portfolio. Gold ETF CFDs are another alternative.
Experienced customer service
The broker has an experienced German-speaking customer service and has more than 30 years of experience in the financial markets. Beginners can test the offers of the broker first via a demo account. The demo account can be used for an unlimited period and has a virtual credit balance of 10,000 euros. Parallel to this, traders can also take advantage of offers for free trader training and the functions of the extended risk management.
After the first experiences in trading, traders can then switch to the live account. Here, trading takes place via a powerful, in-house platform or via app. The trading platform provides traders with numerous trading and charting tools. Order execution is fast and automatic. Traders can find real-time news and analysis in CMC Markets’ news and analysis services. Traders can access, manage and trade their account via all devices at any time. Analyses are also possible on all devices.
A wealth of information and analysis
The broker supports traders with detailed information about CFDs. Many analyses were carried out directly by CMC Markets’ analysis team with experienced experts. For currency CFDs, spreads on the major currency pairs start as low as 0.7 points and popular indices such as the DAX can be traded from a point.
Professional traders can choose an account type that suits their needs at CMC Markets. This allows higher leverage and a margin starting at 0.5 percent. Professional traders also have access to an expanded product range. The most active professional clients receive monthly rebates for trades in currencies, indices and commodities. To be classified as a professional client, traders must meet certain requirements.
Risk management opportunities
CMC Markets also pays special attention to risk management and offers functions for comprehensive hedging of trades. This initially included regular stop loss and trailing stops. Guaranteed Stop Loss Orders (GSLOs) are a special feature. In this way, traders can manage risks, secure profits and reduce losses. In contrast to a normal stop loss, traders have the certainty that a trade is really closed at a certain price. However, this feature comes at a cost. If the guaranteed stop loss does not need to be used, traders are reimbursed for the fee.
For some positions, CFD holding costs are added. These depend on the holding period and risk management. In addition to GSLO orders, there are also costs associated with holding a position overnight. For stock CFDs there are also commissions and costs for price data.
The Broker’s app has already received awards and is among the best on the market. The trading platform is not only characterized by powerful tools and good chart options, but also by an innovative navigation. Traders do not need to intervene when executing orders, as this is done automatically. The app can be used for iPad, iPhone and Android.
Conclusion: CMC Markets with high trading activity
CMC Markets continues to enjoy a high level of trading activity from its clients. In addition, numerous new customers have been added in the last few months. As a result, turnover has again developed very positively in the last two months. Looking at the fiscal year as a whole, expectations could be clearly exceeded.
On the other hand, however, variable operating costs, especially onboarding costs, increased. Nevertheless, the broker intends to continue investing in its technology. The broker’s trading platform allows trading with more than 9,000 CFDs. The Broker’s app is also very modern and thus enables trading on the move.