CMC Markets – have you got any confidence in them...?

[CJ]

By default derivative markets are smaller than their underlying market, meaning that the volatility will always be greater.

You should understand that before entering such a market...

I understand that but measuring it is harder.

Also, CMC says they mimick the underlying market AND add additional depth.

Till I figure it all out, I will continue to play with lunch money.

[Drone]

Have used CMC for about 9 months so thought would give some feedback for those considering.

Pros:

-good (and free) trading platform, lot of info. Mobile phone trading also.
-as far as I have seen prices match underlying very closely (NZ and US shares and FX)
-You can get a trader on the phone easily if you need, seem to have decently knowledgable employees
-leverage (a lot if you want), two edged sword of course.
-very cheap commisions, OCR + 2% is not actually bad for leverage cost. Fed + 3% for US
-huge range of CFDs, truly global access. Easiest way to get o'seas exposure IMHO.

Cons

-Occasionally you get re-quoted when you can see the depth is there in the the underlying market to fill the order, sometimes you need to ring to get the price you should, only seems to be a prob on some small cap nz stock, some of the time.
-I have had an experience where the platform loaded duplicate trades onfor me, cost me a $1k in a few minutes, after a bit of wrangling they refunded me my losses, there is an audit built into the platform and this seemed to work ok. (it shows what buttons you press exactly)

Overall though I would reccommend CMC

They've helped me to do pretty well in the mkt!

Cheers

[Steve]

And I can happily report no issues or hassles in the last 3 months since my previous CMC-supportice post!

[AMR]

I did have one instance where I cancelled a stop and it didn't go through the system. I woke up the next morning with an extra 180 pips in my account

[FarmerGeorge]

Steve what do you mean by "by default derivative markets are smaller than their underlying market, meaning that the volatility will always be greater". I don't think I follow this logic sorry.

[Technical.Trader]

Correct me if I am wrong, but I think he means less people play in derivatives than in straight shares... which is probably the best thing for most people, there are not too many CFD traders who make money.

[FarmerGeorge]

Ah, thanks, though I think that many 'derivatives' markets (perhaps excluding CFD's) are larger in terms of volume/value, if perhaps with fewer players, than their underlying markets.

[Technical.Trader]

True, face value can be higher than the underlying market but the cash put down is way less.... In the right hands derivatives can be good, and are useful for managing risk, but for speculation risk needs to be managed agressively and a positive expectancy system is required.. DMA (Direct Market Access ) CFD platforms are much better than market maker platforms, far less slippage on stop orders!!

Cheers TT...

[Drone]

Oh, forgot to mention the one biggest problem with CFDs and CMC - the ird views it as a "financial arrangement" and therefore your profits are taxable.

[Technical.Trader]

Taxation a problem???...I'd say that was fortunate since most people lose on CFDs anyway....