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CMC Markets has $0 brokerage on global shares – how does it compare?

Posted: 11 September 2020 11:46 am
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It's game on, as CMC becomes Australia's fourth broker to announce commission-free trading in 2020.

CMC Markets has officially joined the race to the bottom on fees by scrapping commissions on stocks from multiple global exchanges.

The online broker updated its account last week, dropping trade fees for US, UK, Canada and Japan stock exchanges to zero. It also updated its list of global markets from 11 to 15.

This year has been a pivotal one for Australia's online share trading sector, with four brokers launching zero-commission trading on US and global stocks in just the last few months.

CMC's offering comes on the heels of IG's zero brokerage deal for global shares in June this year and the soft launch of Dabble's $0 brokerage platform for US stocks in August (official launch Monday).

How does CMC Markets compare?

Zero commission share trading is old news by now in the US, but still relatively new in Australia. Local start-up Stake first introduced the option for US shares back in 2017.

This year, four more brokers joined the bandwagon: CMC Markets, Dabble, eToro and IG. Of those, IG and now CMC are the only two to offer the deal for non-US listed stocks.

The range of products featured by the brokers also differs. Among the five zero-commission trading platforms, only CMC Markets and IG offer access to Australian stock exchanges (for a fee). In addition to shares, CMC, IG and eToro also offer leveraged trading on CFDs and forex.

Of course, brokerage-free doesn't mean there aren't any costs. Instead, brokers make money through foreign exchange (FX) fees, subscription fees or commissions on other products such as CFDs.

You can check out how they compare below:

Broker$0 commission marketsASX brokerage fee*FX fee
CMC MarketsUS, UK, Canada, Japan$9.90 - $11 depending on trade frequency (CHESS-sponsored)0.60%
IGUS, UK, Germany, Ireland$5 - $8 depending on trade frequency (Issuer-sponsored)0.70%
StakeUSNot availableUS 70c per AUD$100
eToroUSNot available0.50%
DabbleUSNot available1.0%

The fee structure to access different markets is also a key point of difference, so it largely comes down to what you prefer to trade more of.

While CMC Markets scraps commission for stocks listed in the US, UK, Canada and Japan, IG runs the deal to access US, UK, German and Ireland-listed stock.

All other markets offered by CMC (aside from Australia) cost $59 per trade.

What about monthly fees?

If you're only looking to trade US stocks, you could take your pick from all five, but there are monthly fees to consider.

CMC Markets has no monthly fees, other than a $15 per month inactivity fee on CFD accounts (not stock broking) and a $10 fee to access live prices (waived if you make 11+ trades per month).

IG, which is targeted towards active traders, charges a $50/quarter inactivity fee if you make fewer than 3 trades during that time, but it does include live pricing for no extra cost.

Check out how the others compare below for monthly fees:

      • CMC Markets: $0
      • IG: $50/quarter inactivity fee (if you make less than 3 trades during that time)
      • Dabble: $8/month subscription fee
      • Stake: $0 (coming in Jan 2021)
      • eToro: $10/month inactivity fee (if you don't log in for 12 months+)

Final verdict

This new update by CMC Markets puts it in a very competitive position in terms of pricing. Its foreign exchange fee is comparatively low and there are no ongoing fees, so long as you're content with delayed market data.

While its pricing for Australian shares is not the cheapest on the market, even if you're an active trader, it's far from high when compared to most others. Meanwhile, its brokerage fee for stocks listed outside of the US, Australia, Japan, UK and Germany is in the high range and in line with what the major banks offer on global shares.

It also pays to note that the platform itself is designed more for experienced traders and new or casual investors may find it tricky to navigate at first.

If you're looking for a low-priced broker that covers a good range of trading options, it's certainly worth looking at.

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