CMC Markets Old platform users beware

[rjmahan]

Peter, going back to my original comments two easy questions.

Has there been any progress made on moving small cap / aim stocks onto the new platform ? I only really want to move accross from my old account once I can move everything across. I already have a large number of accounts to manage and one more is not desirable.

Why did you drop quarterly individual equity spreadbets (cheaper for long term traders) and are there any plans to reintroduce them? Particularly given the fact your competitors are offering them. I realise long-term spreadbetting is very much a minority pursuit....

Have your guys done any work comparing your financing costs / other costs (not just spreads) with your competitors ? I would be interested in having a look at the results if you have.

Thanks,
Rob

 

[PC at CMC Markets]

Good morning RJMahan
Thanks for your question.
We dropped the quarterly bets because since we launched rolling cash spread bets that has been our most popular product and the demand has been dropping for quarterly bets.
Most of our clients prefer rolling cash because it is generally cheaper and the pricing is more transparent because you can compare cash prices and spreads to the under line market. By the way we plan to launch a lot more instruments in January including a lot more shares and more Forex instruments.
Technically you are wrong to assume that quarterly bets are cheaper especially for long term traders.
Firstly quarter bet interest rates and cost of carry are based on the 90 day interest rate which is normally higher than the over night rate. (Can be the other way around depending on products but is normally higher than over night rate)
Secondly when a quarterly bet matures and you want to roll it over you normally have to pay a roll over spread to prolong the bet.
If you open a quarterly bet and keep it open for only part of the period you could have in effect paid a 90 day finance charge for a shorter period. Of course when you close the position you will receive back the interest rate on the remainder of the period left but if there are only say 30 days left to maturity then you receive back the 30 day period interest rate (less the spread) and the interest rate will probably not be as high as the 90 day interest rate that you paid on opening the bet.

Yes we have done comparisons with competitors and in most cases a rolling cash spread bet with CMC Markets works out cheaper than quarterly bets.

For example, with our daily bet finance charge we combine all of your cash balances and off set them against the notional value of your bet. so for example if you have a bet open for say £10,000 and you have cash with us for £1000 then you pay over night financing on £9000 the net between the two. I do not know of any other spread bet company that does this. If there are can you let me know.
also with a rolling cash spread bet you can keep the bet open as long as you like and as there is no maturity date you do not have to pay a roll over spread on maturity.
Lots of points here, happy to go over them in more detail and if you like you are welcome to come to the office and we can go through the details of your bets and work out what is best for you but I am confident that rolling cash spread bets are generally the cheapest way for you to keep a bet open.

thanks Peter

Peter, going back to my original comments two easy questions.

Has there been any progress made on moving small cap / aim stocks onto the new platform ? I only really want to move accross from my old account once I can move everything across. I already have a large number of accounts to manage and one more is not desirable.

Why did you drop quarterly individual equity spreadbets (cheaper for long term traders) and are there any plans to reintroduce them? Particularly given the fact your competitors are offering them. I realise long-term spreadbetting is very much a minority pursuit....

Have your guys done any work comparing your financing costs / other costs (not just spreads) with your competitors ? I would be interested in having a look at the results if you have.

Thanks,
Rob

 

[rjmahan]

Hi Peter,
Thanks for your reply. Just in reply to your comments. Could you e-mail me a copy the work you have done of you vis a vis your competitors or PM me ? The sort of thing you mentioned - regarding financing is very hard to glean from websites / terms and conditions but it all helps long term returns.

One other issue. I am getting to be reasonable size - individual equities minimum £5k a position up to c £20k (and I am looking to grow). Some stocks with low liquidity and large spreads. I can be paying spreads of £300+. Now not all this is going into your pocket much of this is market spread. I know you are hedging it (as I am being put on phone dealing while you do much of the time). Is there any way I can avoid paying this market spread, either by phone dealing or you introducing some sort of limit order type ? I know I need to pay something what I am paying does seem rather excessive.

I am dealing with you, and other spreadbet companies to minimise my tax liabilities (outweighing the spread) but paying this sort of spread is not ideal when I know I could go to interactive brokers (or whomever) and trade within the spread, greatly minimising my costs of entry / exit.

Is there any way you could introduce a product which could let you keep your margin but reduce the ammount of spread I am paying ?

Cheers,
Rob

 

[PC at CMC Markets]

Good morning Rob, brass monkeys out there today.
Thanks for your private message but will answer it here because the answer is still the same whether it is private or on this blog. Hope that is fine by you.

Firstly, we have carried out lots of extensive work on competitors it covers finance and trading systems, spreads, execution, etc. I cannot send it to you because it is detailed and covers many points and was done for ourselves only. So cannot let you have it but you can always check out financing with competitors from their web sites or by calling them.
One other point regarding financing. Because we net every thing off and charge you the different between the notional value of your position and your cash, we also include any unreleased profit or loss so financing is always your net financial position. I think we are the only spread bet company to do this and is I believe a more efficient way for clients to finance positions on a daily basis. We can do the sums any time if you want to come to the office.

You are right about spreads we have to pay them to the markets as well. I guess the only way to avoid them is to place stop entry orders or as you say place bids and offers inside the displayed spreads. The down side to this is you might not get executed on your trade
and you miss the trade. also effectively you still pay the spread if you place bids offers inside the displayed spread because the market has to move to your level and if this happens it will be with a spread as part of the market movement.

spreads should get tighter with more liquidity around each product but if you are trading low liquidity products then presumably you are looking for longer term movement rather than just trading in and out quickly so you have to build your performance around the strategy rather than quick in and out trading as spreads on some illiquid products can prevent quick time trading. Sorry that sounds like I am trying to tell you how to trade but I think you know what I mean.

Hope that helps
regards Peter

Hi Peter,
Thanks for your reply. Just in reply to your comments. Could you e-mail me a copy the work you have done of you vis a vis your competitors or PM me ? The sort of thing you mentioned - regarding financing is very hard to glean from websites / terms and conditions but it all helps long term returns.

One other issue. I am getting to be reasonable size - individual equities minimum £5k a position up to c £20k (and I am looking to grow). Some stocks with low liquidity and large spreads. I can be paying spreads of £300+. Now not all this is going into your pocket much of this is market spread. I know you are hedging it (as I am being put on phone dealing while you do much of the time). Is there any way I can avoid paying this market spread, either by phone dealing or you introducing some sort of limit order type ? I know I need to pay something what I am paying does seem rather excessive.

I am dealing with you, and other spreadbet companies to minimise my tax liabilities (outweighing the spread) but paying this sort of spread is not ideal when I know I could go to interactive brokers (or whomever) and trade within the spread, greatly minimising my costs of entry / exit.

Is there any way you could introduce a product which could let you keep your margin but reduce the ammount of spread I am paying ?

Cheers,
Rob

 

[mikeeg]

There is a saying: "If it aint broke...."

Sorry CMC, but I shall be taking my custom elsewhere. I've been with CMC for around 6 years and will be closing my account. I've tried to get to grips with the new system but can't wait any longer for new and improved spreads, greater variety of markets to choose from....etc when other competitors are doing it already and are more responsive to the ever-changing spreadbetting marketplace.

 

[PC at CMC Markets]

Hi Mikeeg
Thanks for taking the time to blog but I think you are being a bit harsh especially as we have invested so much in new technology including charting. Also next gen has new and improved spreads, next gen charting and lots of easy to use market data. I believe we are the only company in our industry to launch new technology at least in the last year.
I know we are light on products but in fact we are planning to launch quite a few new products in January. Do not know the exact figure yet but should be at least three times what you can trade now.
If you let me know what you cannot get to grips with will be happy to get some body to call you and take you through the system.
If you do decide to close your account, thanks very much for your business over the years but the door is always open if you want to come back once we launch more products in January.
best regards Peter Cruddas.

There is a saying: "If it aint broke...."

Sorry CMC, but I shall be taking my custom elsewhere. I've been with CMC for around 6 years and will be closing my account. I've tried to get to grips with the new system but can't wait any longer for new and improved spreads, greater variety of markets to choose from....etc when other competitors are doing it already and are more responsive to the ever-changing spreadbetting marketplace.

 

[mikeeg]

Hi Mikeeg
Thanks for taking the time to blog but I think you are being a bit harsh especially as we have invested so much in new technology including charting. Also next gen has new and improved spreads, next gen charting and lots of easy to use market data. I believe we are the only company in our industry to launch new technology at least in the last year.
I know we are light on products but in fact we are planning to launch quite a few new products in January. Do not know the exact figure yet but should be at least three times what you can trade now.
If you let me know what you cannot get to grips with will be happy to get some body to call you and take you through the system.
If you do decide to close your account, thanks very much for your business over the years but the door is always open if you want to come back once we launch more products in January.
best regards Peter Cruddas.

Peter,

Thanks for posting a reply. Perhaps my post was a little harsh in hindsight; I can understand why CMC want to make the changes, but for me personally I have 4 different spreadbet accounts and since the changes I haven't used CMC once and probably don't intend to unless the following happen:-

i) More competitive spreads
ii) Greater instruments to trade from (e.g. AIM and small cap stocks). I wanted to short Desire the other day...quick check on your platform...and I couldn't find the stock anywhere!
iii) What happened to the fundamental analysis via Digital Look? That was, in my opinion, a great facility and something which differentiated you from your other competitors?

Forgive me, maybe I need someone to talk me through the above if there are some points I'm missing. I did feedback to my designated account person at CMC regarding the changes, and in particular the bit I used to use the most was the fundamental analysis stuff (e.g. stock filters, pdf's of individual stocks to print out...etc). It was all in one place and easy to access...etc.

Giving CMC the benefit of the doubt I'll wait a couple of months and hopefully as you suggest the New Year will bring greater instruments to trade from.

Thanks for listening, and apologies for the tone of my previous post - I'm just frustrated that I was forced to adopt the new system, when I would have preferred to have had the option to stay put.

 

[Ross Spur]

Level 2 on Investor Edition platform also gone AWOL, which I think was another Digital Look feature.
I'd agree with i) and ii) as well. The new gen platform would probably be good for shorter-term trades on major indices and FX, but not with the current spreads. For longer term trades the platform is less important, so long as the market is actually quoted.

 

[PC at CMC Markets]

Hi Mikeeg

I really appreciate your blog as it is good debating point instead of some blogs that rant off.
To answer your questions.

1. Spreads. We can debate this all day but I think we have to separate head line spreads
from the reality of the market. What we offer are constant consistent spreads throughout the day. We will be improving the spreads we are just fixing some back end stuff so watch this space.

2. More products coming on line in January which should give you a more comprehensive market to trade. Last time I asked they told me another 3000 instruments but mainly shares although we are also going to ramp up currency pairs as well. I hope you like our rolling cash commodities have not seen any other sb provider offering this product.
Also in January we are launch next gen cfds around the world, it will be phased release but we need more instruments for next gen cfds so all in the pipe line.

3. You should still be able to get Digital Look data free through investor edition and you can still use old spread bet platform for other instruments we do not have on next gen platform.

I know next gen is not perfect at the moment but if you look at the roll out every month there are new things being upgraded including charts, instruments, products and lot of new functionality especially behind the scenes that will produce for you a stable trading environment during volatile times.

There are a lot more yummy things to come, I would like it all to have been there on day one but that is just not possible with the level of functionality we are building into the platform. Thanks for your time and constructive comments.
good luck with your trading
best regards Peter

Peter,

Thanks for posting a reply. Perhaps my post was a little harsh in hindsight; I can understand why CMC want to make the changes, but for me personally I have 4 different spreadbet accounts and since the changes I haven't used CMC once and probably don't intend to unless the following happen:-

i) More competitive spreads
ii) Greater instruments to trade from (e.g. AIM and small cap stocks). I wanted to short Desire the other day...quick check on your platform...and I couldn't find the stock anywhere!
iii) What happened to the fundamental analysis via Digital Look? That was, in my opinion, a great facility and something which differentiated you from your other competitors?

Forgive me, maybe I need someone to talk me through the above if there are some points I'm missing. I did feedback to my designated account person at CMC regarding the changes, and in particular the bit I used to use the most was the fundamental analysis stuff (e.g. stock filters, pdf's of individual stocks to print out...etc). It was all in one place and easy to access...etc.

Giving CMC the benefit of the doubt I'll wait a couple of months and hopefully as you suggest the New Year will bring greater instruments to trade from.

Thanks for listening, and apologies for the tone of my previous post - I'm just frustrated that I was forced to adopt the new system, when I would have preferred to have had the option to stay put.

 

[Ross Spur]

re. 3. I thought that by signing up for the new platform you lost access to the old one(s), which in any case will soon be obsolete? Does this mean that clients would effectively have two separate CMC accounts, each with its own T&Cs?

 

[PC at CMC Markets]

Hi Ross
As one client you can have two accounts one on old gen and one on next gen. You will not be classed as an old client on old gen and a new client on next gen. you will always be a valued old client whatever platform you trade on.
You will need to fund next gen either with new money or partial funding from your old gen account. Just call the guys up and they will sort out the transfer. You need to down load next gen and open an account and then speak to the guys how you will fund or just put fresh money into your next gen account. Sorry we cannot merge the money on old gen into combined account so you can trade on both platforms. I think it is mainly technical issues here with combing old software with new software. You will need to sign next gen terms of business as the system is different but apart from that you can trade away merrily on both.
I repeat
THERE ARE NO PLANS TO CLOSE OFF OLD GEN PLATFORM AT THE MOMENT and do not know if/when we will do so. However, there is around a forty to fifty migration rate from old gen to next gen because generally clients get a better service on next gen. spreads are tighter, execution is quicker, no dealer intervention, no requotes and charts are more intuitive and there are more improvements coming.

Hope that helps you. we are here to assist. If you have any problems blog me here and I will sort it out.

If you open next gen account let me know what you think.

thanks Peter

re. 3. I thought that by signing up for the new platform you lost access to the old one(s), which in any case will soon be obsolete? Does this mean that clients would effectively have two separate CMC accounts, each with its own T&Cs?

 

[PC at CMC Markets]

Hi Guys
Thought you might like to know that I have started my own thread. Heading is
CMC Markets owner answers your questions.
thanks Peter Cruddas