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

[BigBob]

Well, I certainly don't.... For what it's worth, here's a brief note of my personal experience....

I first started trading with them in 2006 – I opened an account with a relatively small amount, my general idea was to trade shorter time frames to add another dimension to my investment portfolio. I didn't do particularly well the first time around, but in hindsight, maybe it wasn't just me.... I noticed that my stops always seemed to be hit with inexplicable swings just prior to moves in either direction and these did not always seem to be reflected in the underlying markets. I also had a number of problems when executing “market” trades – basically the orders would not confirm or cancel immediately which made it difficult to ascertain where my positions were at, but they would eventually trigger and clear and things would come right, so though it was annoying it didn't really bother me.

That first time around I lasted as a trader for about 6 months, before crashing out... I went back to the drawing board and didn't trade for about 12 months, before I started again in late 2007 and this is where I finally lost whatever confidence I had in CMC Markets...

The first major incidence was in the week of the first “Bernanke Put”. I had been doing OK on some short term trades and decided to pull some money out of the market. I did an online withdrawal request and received an e-mail to confirm that my request had been received and would be actioned the same day. Only the next day I found there had been no money transferred to my account and when I contacted them I was told that I had to lodge a complaint and that they would investigate. The market then moved against me and Mr. Market gouged back what I had tried to remove from his grasp.... About 2 weeks later I received a letter from CMC stating that they had been “busy” that day and that their manual process for my withdrawal request had not been actioned. No apology, no compensation (oh, not true – they offered me $4, which I by the way, never got), nothing basically.... The final straw, and no, this has nothing to do with the slowness of executing market orders, with the consequent re-quotes, that for some reason always seem to work against you, was today, where I came home from work to find that my account had been liquidated earlier today... I had received no notification that it was on margin call, that it was within liquidation limits or in fact that it had been liquidated... The market had moved in my favour, and had I not been liquidated I would have made a decent few thousand dollars... I again rang CMC to find out what was going on and again received no sensible explanation and was told to lodge a complaint... Well, instead I asked them to close my account and when they told me that they couldn't, I got slightly agitated and they hung up on me....

anyway, it's probably a blessing in disguise... I'm not really cut out to be a trader... but if I was to trade again, would I use CMC again....? not in a hundred years...!! I wouldn't touch them with a barge pole! And I hope this posting may make others think twice too....!

[AMR]

Ouch...sorry for your losses. But how much % of your account did you have on margin?

Generally I find CMC quotes are exactly what I see in ASB Securities. The difference is due to the bid-ask spread and the lack of market depth on some stocks causing huge spreads to open up and take out your stops.

If it helps, I am more than willing to post up charts of what I get from CMC to compare against what you get.

[STRAT]

Mate, thats a shocking story. Youre a very calm and collected fella. I would have been in my car after they hung up on me and looking for a nose to flatten

[POSSUM THE CAT]

AS you are dealing with what is really a bookmaker as they use their own market figures Not ASX did you really expect better.

[BigBob]

AMR - I generally trade indicies Dow Jones, ASX200 and FTSE - and these stay open "out of hours" so unless you know exactly which futures market is open at the time it is very difficult to check the underlying market... easier when the market is open of course...

Also, I was very aggressively leveraged on this last one - the US30 (CMC terminology for Dow Jones) market moved up to about 12125 this morning before dropping like a stone - I got closed out on the way down again at 12086... not exactly sure why it wasn't closed out higher... probably less than 5 mins after I get bumped I would have been off margin call.... what really riles me that I wasn't notified that anything was wrong or that it had been closed out...

Possum - yes you are right... they are basically nowt but bookmakers and it's taking me too long to realise....

Anyway, what doesn't kill you makes you stronger... :o)

[Soolaimon]

Hi Guys, this is my first quote and quite opertune as I have just ordered CMCs software with the view of starting an account with them, soooo, taking the comments on board, what are the alternatives? and has anyone had recent satisfactory service from them? Cheers.

[STRAT]

Hi Guys, this is my first quote and quite opertune as I have just ordered CMCs software with the view of starting an account with them, soooo, taking the comments on board, what are the alternatives? and has anyone had recent satisfactory service from them? Cheers.

Excuse my ignorance but is the same crowd pushing their wares on NZ TV lately?

[Steve]

It is just the nature of the beast.

In a volatile market, spreads can be a detriment especially when the market 'gaps' over your stop. You know that it can happen, and should give yourself enough cover in case it does happen, while hoping that it doesn't happen. If the market has suddenlygapped enough to hit a stop, there may not be any opportunity to receive a liquidation warning. It is volatile times.

I only trade FX with CMC, never CFDs etc. While they are a marketmaker, I have never found the quotes to be materially different from the reality. Given the ease with which you can compare their quotes to the real market, it would be foolish of them to try and so blatently screw you over...

There have never been any delays in execution and they have always transferred funds back to me on request.

[AMR]

I don't think CMC "stop hunt". Several comparisons by members on another forum show that CMC and the indices match up tick for tick after accounting for the spread. Besides, any differences would result in arbitage opportunities. PM me for the link if you want it.

I've only had requotes on the HK33 which moves incredibly fast, but now I trade the Aussie200 mainly.

I think the real problem lies with the amount of leverage a typical CFD index allows. Some five times the leverage of a mini futures contract.

[BigBob]

For me it has turned out to be a matter of confidence....

Do I know that CMC "stop hunt"? no I don't... but I am not sure, as they certainly have the ability to do so and I also am not confident that they know if individual dealers do or if they have systems in place to stop them.

I am also not confident that CMC has general business processes and systems in place to match their sleek PR image... How can they be too "busy" to process a withdrawal request? How come market orders, especially when markets are busy, take a long time to process and why do they need manual intevention in the first place? What is the deal with these re-quotes and why are they rarely in your favour? Why do they suddenly stop sending e-mail notification? Also, while we're at it, why do their charting software sometimes not update and or even load the charts? Is it just another tin pot, mickey mouse outfit behind the flash facade...?

Also, not forgetting that indicies when traded as CMC CFDs are not actually reflecting the "real" market, but rather the futures market, and at times these will trade at a relatively constant difference to the "real" index value (ie the ASX200 CFD is often trading around 18-20 points less than the ASX200 as quoted by the ASX), this gives CMC enough "flexibility" to always cream the spread - do they do this...? I don't know, but I am not confident that they don't!

So basically I have lost all confidence in CMC Markets - and as a trader if you can't trust your broker, who can you trust....???