Table of contents:
- 1 Costs and fees at broker CMC Markets
Especially cost-sensitive traders will pay particular attention to the fees charged when comparing forex brokers. For this reason, we would like to discuss the various cost factors in our guide and inform you exactly what types of costs you can expect and how you can avoid some fees with regard to each broker. First of all, we would like to provide some basic information on the subject of costs and fees, especially for our readers who have little or no experience in trading CFDs or foreign exchange.
Costs and fees at broker CMC Markets
If you are new to trading Forex and CFDs, you probably think that there is only one major cost factor, namely the spread. However, this is only partially true. On the one hand, the spread is of course the main cost factor, because no CFD and Forex broker will do without these costs, which naturally represent income for him. On the other hand, there are often other costs that are neither actively communicated nor necessarily easy to recognize. The costs of trading with CMC Markets are explained in the following article.
The spread is the main source of income for Forex and CFD brokers, on which the entire business principle is based. This applies at least to so-called market makers, who set the respective prices for the customer themselves. When setting the price, it is always the case that the buying and selling prices deviate from each other. The trader always pays a slightly higher price when buying than he receives when selling a position. This results in the spread, which is therefore also the difference between the buy price on the one hand and the selling price on the other.
In this context, you will have no doubt already noticed that, for example, when displaying real-time prices, two prices must always be mentioned. On the left column is the buy price, while the broker publishes the selling price on the right column. However, you should not overestimate the spread as a cost factor, because with an average (depending on the currency pair and CFDs traded) of between 0.01 and 0.20 percent or between 1.0 and 20 pips (points), the spread, measured as a percentage, does not have such a serious cost component as is the case with conventional fees for share trading, for example.
Financing costs, payment method fees and inactivity fees
As mentioned at the beginning, the spread is certainly the most obvious cost factor for any Forex and CFD broker. However, there are other cost factors that are not so easy to identify and some traders may not even be aware of. For example, the so-called inactivity fee. Although this is only charged by some brokers, it is of course a cost factor for those traders who do not trade very often. Some Forex and CFD brokers, for example, charge this fee if the customer has not placed a trade order in the past three or six months or at least has not logged into the system even briefly.
With other brokers, a new login is often sufficient to keep the account inactive status and avoid the inactivity fee. With CMC this is unfortunately not the case.
When trading with CMC Markets, the following costs can occur:
- Market spreads
- Trading commissions
- Overnight fees
- Inactivity fees
When trading stock and ETF CFDs on the trading platform CMC Markets, a commission is charged per order. But how high is the commission? That depends on the country the trading asset is listed in. Traders can take a look at the following table for more information about the commissions that are charged on market spreads for trading ETF and stock CFDs.
|Country||Commission||Minimal commission charge|
|UK||0.10 %||GBP 9.00|
|US||2 cents per unit||USD 10.00|
|Australia||0.10 %||AUF 7.00|
|Austria||0.10 %||EUR 9.00|
|Belgium||0.10 %||EUR 9.00|
|Canada||2 cents||CAD 10.00|
|Denmark||0.10 %||DKK 90.00|
|Finland||0.10 %||EUR 9.00|
|France||0.10 %||EUR 9.00|
|Germany||0.10 %||EUR 9.00|
|Hong KOng||0.18 %||HKD 50.00|
|Ireland||0.10 %||EUR 9.00|
|Italy||0.10 %||EUR 9.00|
|Japan||0.10 %||JPY 1,000|
|Netherlands||0.10 %||EUR 9.00|
|Portugal||0.10 %||NOK 79.00|
|Singapore (SGD)||0.10 %||SGD 10.00|
|Singapore (USD)||0.10 %||USD 10.00|
|Spain||0.10 %||EUR 9.00|
|Sweden||0.10 %||SEK 89.00|
|Switzerland||0.10 %||CHF 900|
There are not a lot of trading commissions that occur while trading with CMC Markets. The only exception is while making a deposit. There are not a lot of deposit methods that are offered for funding at the broker’s website. Traders can only choose between credit cards and bank transfers. We recommend funding via bank transfer because there is a fee of 1.8 % of the funding charged when making a deposit via credit card.
Overnight costs occur when positions are held after 5 pm (New York time) or on the weekends. Depending on the currency, overnight costs differ. Overnight costs appear when trading different types of CFDs. Please take a look below at the costs:
|Currency||Reference interest rate|
|AUD||Bank acceptance 1 month|
|CAD||Bank acceptance 1 month|
|CHF||Libor 1 month|
|DKK||Copenhagen Interbank Offered Rate 1 month|
|EUR||Euribor 1 month|
|GBP||Libor 1 month|
|HKD||Hongkong Interbank Offered Rate 1 month|
|IDR||Deposit rate 1 month|
|JPY||Libor 1 month|
|NOK||Norwegian Interbank Offered Rate 1 month|
|NZD||Bank acceptance 1 month|
|SEK||Stockholm Interbank Offered Rate 1 month|
|SGD||Singapore Interbank Offered Rate 1 month|
|USD||Libor 1 month|
At CMC Markets the inactivity fee is 10 Euro per month. An account is considered inactive if there are no open positions and no trading activity has taken place for more than 2 years. If you start trading again, the fee for the last months (maximum 30 Euro) will be credited to the client.
Somewhat differently, there is a cost factor known as financing costs. These are interest rates that Forex brokers charge in the same way as CFD brokers, provided that the client has open positions overnight. Only long positions are affected by the financing costs, because in this case the broker provides his own capital for trading for the trader. As is common with almost every loan, the broker understandably wants to receive interest on the borrowed money, so he charges financing costs.
Financing costs at CMC Markets:
Another type of fee is any costs incurred in connection with some payment methods. As a result, some Forex and CFD brokers charge fees for deposits or withdrawals by a particular payment method. In this case, it helps to find out more about the different payment methods, as there is usually at least one deposit or withdrawal method that is free.
Costs and Fees at CMC Markets
Now that you’ve received a lot of general information about the costs and fees that can be incurred when trading Forex and CFDs, it’s time to take a closer look at the broker CMC Markets. Of course, CMC Markets Broker also charges spreads when you actively trade forex pairs or CFDs. On the positive side, spreads start as low as 0.7 pips when trading currency pairs. The broker works with variable spreads that can change every minute, hourly, or at other intervals. Especially with the currency pair Euro / US dollar, which is the choice of many beginners, you can trade from as little as 0.7 pips.
Not only when trading with foreign exchange, but also when trading CFDs, the broker calculates spreads, which are of course mainly dependent on the traded underlying asset. For example, if you decide to trade a DAX CFD, i.e. an Index CFD, the spread is one point. When trading oil CFDs, you can calculate a spread starting at three points. When trading equity CFDs, it is common practice not to use spreads, but to charge a commission instead.
This is also the case with the broker CMC Markets, which charges different commissions depending on the country of origin of the company with its shares to be traded. You can find out how high the commission is for the respective equity CFDs from a detailed list that is published on the broker’s website. However, you will need to take into account the minimum commission that will be charged, which starts at five euros and can go up to the equivalent of around ten euros in the respective currency of the share.
Otherwise, fees for placing guaranteed stop-loss orders may still apply. CMC Markets charges different fees depending on the market traded.
Additional fees may also apply for the use of additional quote data subscriptions. For example, if you wish to view the prices of Norwegian or Italian equity CFDs in CMC Markets’ trading platform, you will need to take out an additional price data subscription, for which a monthly fee will be charged.
However, the fee will be refunded from 2 trades executed per month back to the trading account. However, the credit will not take place until the following calendar month.
Costs for credit card deposit
The bad news is that the credit card deposit method can incur fees of 1.8 percent of the amount deposited. The broker also informs his customers of this and adds that he is prepared to pay the costs charged by the credit card company for initial deposits of up to 15,000 euros. However, for each subsequent deposit by credit card, it is possible that these costs will actually be incurred. On the other hand, for the other payment methods, which unfortunately at broker CMC Markets only consist of bank transfer, you do not have to calculate any costs.
Conclusion on costs and fees
In summary, the broker charges CMC Markets typical fees found in almost every Forex and CFD broker. This refers to both the spread and the financing costs that are charged for an overnight long position. The only thing that is not so common is the fact that credit card deposits sometimes incur costs. Overall, however, the costs are low, especially for the frequently traded currency pairs and CFDs. For example, forex trading starts from a low spread of just 0.7 pips. However, further costs may be incurred for placing guaranteed stop-loss orders or additional price data subscriptions. On the positive side, all possible costs are communicated very transparently on the CMC Markets homepage.
Read our other articles about CMC Markets: