Oanda Vs CMC Markets

Category: Broker Guides | Author: Trading Brokers | Date: July 22, 2023

In the world of investment management, choosing the right platform can make a significant difference in your trading experience and financial success. In this article, we will compare two prominent players in the industry: Oanda and CMC Markets. Both companies offer forex and CFD trading, along with a range of investment products. With their competitive spreads, user-friendly platforms, and regulatory oversight, Oanda and CMC Markets have established themselves as trusted names in the market. By exploring their features, services, and unique selling points, we will help you gain insights into which platform might be better suited to your investment goals and preferences. So, let’s dive in and compare Oanda and CMC Markets to find out which one may be the right choice for you.

Overview of Oanda

Oanda

Oanda

Oanda is a reputable investment management company with a strong presence in the forex and CFD trading industry. As a US-based company, it is regulated by the US Commodity Futures Trading Commission (CFTC) and the UK Financial Conduct Authority (FCA), which adds to its credibility. Oanda offers a wide range of investment products, including forex, CFDs, commodities, bonds, and indices, providing investors with diverse options to build their portfolios.

One of the key strengths of Oanda is its competitive spreads on the trading platform. Low spreads can significantly impact trading costs and potentially enhance profitability. Oanda’s platform is equipped with an array of tools and resources, empowering investors to make informed decisions. Traders can access real-time market data, technical analysis tools, and customizable charting features. Additionally, Oanda’s platform is user-friendly, making it suitable for both novice and experienced traders.

Pros of Oanda

  • Regulated by top-tier financial authorities (CFTC and FCA).
  • Wide range of investment products including forex, CFDs, commodities, bonds, and indices.
  • Competitive spreads that can help reduce trading costs.
  • User-friendly trading platform with advanced tools and charting features.

Cons of Oanda

  • Limited availability of certain investment products such as cryptocurrencies.
  • Customer support may have room for improvement.

Overview of CMC Markets

CMC Markets 

CMC Markets

CMC Markets is a well-established investment management company based in the UK and regulated by the Financial Conduct Authority (FCA). Similar to Oanda, CMC Markets specializes in forex and CFD trading. The company offers a comprehensive range of investment products, including forex, CFDs, commodities, indices, and cryptocurrencies, allowing investors to diversify their portfolios and take advantage of various market opportunities.

CMC Markets boasts a user-friendly trading platform that is designed to cater to the needs of different types of traders. The platform provides access to a variety of charting tools, indicators, and technical analysis features, empowering traders to conduct in-depth market analysis. Additionally, CMC Markets offers a mobile app, enabling traders to monitor and execute trades on-the-go.

Pros of CMC Markets

  • Regulated by a reputable financial authority (FCA).
  • Wide range of investment products including forex, CFDs, commodities, indices, and cryptocurrencies.
  • User-friendly trading platform with comprehensive charting and analysis tools.
  • Mobile app for convenient trading on-the-go.

Cons of CMC Markets

  • Spreads are slightly higher compared to some competitors.
  • Limited availability of certain investment products such as bonds.

Comparison Between Oanda and CMC Markets

When it comes to choosing between Oanda and CMC Markets, both renowned investment management companies specializing in forex and CFD trading, there are several key considerations to examine.

Regulation

Oanda and CMC Markets are both regulated by the FCA in the UK, ensuring client protection standards. Oanda holds additional regulatory oversight from CIRO, ASIC, MAS, and NFA, while CMC Markets is also regulated by ASIC, MAS, and FMA. Both brokers maintain segregated client funds in reputable banks and conduct daily reconciliations. However, Oanda lacks a banking license and stock exchange listing, potentially impacting its transparency and financial stability. In contrast, CMC Markets is listed on the London Stock Exchange and holds an FCA banking license. Oanda’s compensation scheme varies based on the client’s location, ranging from £85k to €20k to CAD 1mn, while CMC Markets offers compensation ranging from £85k to €20k to S$50k to NZ$200k, depending on the client’s country, in case of broker default.

Trading platforms

In addition to its proprietary trading platform, Oanda offers clients the option to trade using the widely popular MetaTrader 4 (MT4) and MetaTrader 5 (MT5) platforms. These platforms are renowned for their user-friendly interfaces, comprehensive charting tools, and extensive selection of technical indicators. CMC Markets, similarly, provides its own proprietary trading platform along with the option to use MetaTrader 4 (MT4), offering flexibility to traders based on their preferences and familiarity.

Pricing and fees

Oanda has no deposit or account fees, but bank transfer withdrawals cost $20. They offer two pricing models: spread-only pricing with spreads from 1.2 pips and no commission, and core pricing with lower spreads and a $5 per $100,000 commission. Oanda applies holding charges based on applicable rates and has a $10 inactivity fee after 12 months without trading. CMC Markets has no deposit or account fees but may charge monthly data subscription fees. They offer spread-only pricing with spreads from 0.7 pips and no commission or an Elite Trader program with lower spreads and volume-based rebates of $5 to $17 per million traded. CMC Markets applies holding costs for overnight positions and has a £10 monthly inactivity fee after two years of no trading.

Broker Type

Oanda is a market maker broker, which means it acts as a counterparty to your trades and sets its own prices based on the market conditions. This may create a conflict of interest between the broker and its clients, as it may profit from your losses. However, Oanda claims that it uses an automated pricing engine that ensures fair and transparent pricing for its clients. It also states that it does not manipulate prices or execute orders against its clients’ interests. CMC Markets is a no-dealing desk (NDD) broker, which means it does not act as a counterparty to your trades but instead passes them to its liquidity providers. This may reduce the risk of price manipulation or requotes from the broker. However, CMC Markets may still profit from your trades by adding a markup to the spreads or charging commissions.

Social Trading

Oanda does not offer social trading features on its platform, which means you cannot copy or follow other traders’ strategies or signals. However, you can use third-party services such as ZuluTrade or Myfxbook to connect your Oanda account and access social trading features. CMC Markets offers social trading features on its platform through its Trading Central service. This service provides you with market analysis, trading signals, technical indicators, and expert opinions from professional traders. You can also join the CMC Markets community forum to interact with other traders and share your ideas.

Leverage

Oanda offers leverage options of up to 50:1 for retail clients and up to 100:1 for professional clients. Leverage allows traders to control larger positions with a smaller amount of capital. However, it’s crucial to understand the risks associated with leverage, as it amplifies both profits and losses. Similarly, CMC Markets offers leverage of up to 30:1 for retail clients and up to 500:1 for professional clients, catering to different risk preferences and regulatory requirements.

Asset selection

Oanda and CMC Markets provide a diverse range of tradable assets. Oanda offers a comprehensive selection including forex, shares, indices, commodities, cryptocurrencies, options, ETFs, bonds, and interest rates. This allows traders to access various global markets and diversify their portfolios. Similarly, CMC Markets offers a similar asset selection, enabling clients to trade in multiple asset classes, providing opportunities across different markets and investment strategies.

Social Trading

Oanda does not have a dedicated social trading platform but integrates with third-party services like TradingView and MT4, offering traders access to social networks and copy trading functionalities. Additionally, Oanda provides an API for accessing historical data and rates. On the other hand, CMC Markets offers its proprietary social trading platform called CMC Alpha, designed as a loyalty scheme for high-volume traders. CMC Alpha provides exclusive features, including premium support, spread discounts, market insights, webinars, events, and a private chat room. Traders on CMC Alpha can also follow and copy top-performing traders on the platform.

Minimum Deposit

Oanda and CMC Markets do not have a minimum deposit requirement for opening an account. However, the minimum deposit can vary depending on the payment method used. For Oanda, the minimum deposit is $20 for bank transfers and $50 for debit cards. For CMC Markets, the minimum deposit is £200 for bank transfers and £100 for debit cards. Both brokers cater to beginners or low-budget traders looking to start with a small amount of capital. Oanda may offer lower minimum deposits for some payment methods compared to CMC Markets.

Withdrawal and Deposit methods

Oanda offers a range of convenient options for deposits and withdrawals, including bank transfers, credit/debit cards, PayPal, and Skrill. However, availability may vary based on the client’s country of residence and local regulations. CMC Markets supports similar deposit methods, including bank transfers, credit/debit cards, PayPal, and Skrill. For withdrawals, clients can choose between bank transfers or e-wallets like PayPal or Skrill, providing flexibility and convenience in managing their funds.

Which is Better For You?

Oanda may be the better choice for traders who value robust regulation, as it is regulated by both the US Commodity Futures Trading Commission (CFTC) and the UK Financial Conduct Authority (FCA). This dual regulation provides an added layer of trust and oversight, ensuring the safety of client funds and adherence to industry standards. Additionally, Oanda’s combination of the popular MetaTrader 4 (MT4) platform and its proprietary webtrader, along with a comprehensive suite of trading tools, offers a powerful and customizable trading experience. Traders who prioritize access to bonds as an investment option will also find Oanda appealing, as it includes bonds in its product lineup.

On the other hand, CMC Markets may be a preferred choice for traders seeking a user-friendly platform with competitive spreads. The platform’s intuitive interface, coupled with a range of charting tools and indicators, facilitates efficient market analysis and trade execution. Although CMC Markets is regulated solely by the FCA, the Financial Conduct Authority is a respected regulatory body known for its strict oversight of financial institutions. Furthermore, CMC Markets provides traders with a diverse range of investment products, including forex, CFDs, commodities, indices, and cryptocurrencies, catering to a wide range of trading preferences.

Conclusion

In conclusion, both Oanda and CMC Markets are reputable investment management companies that offer a range of investment products and services. Oanda stands out with its dual regulation, access to bonds, and a combination of powerful trading platforms. On the other hand, CMC Markets excels with its user-friendly platform, competitive spreads, and diverse selection of investment products. Ultimately, the choice between the two will depend on your specific trading needs, preferences, and priorities. It is recommended to carefully consider factors such as regulation, trading platforms, investment product offerings, spreads, and customer support to determine which company aligns best with your individual requirements.


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