CMC Markets has introduced a new trading product called ‘Tracker’. This works in a similar way to a contract for difference, and in this respect a ‘tracker’ tracks the price movement of the underlying asset, including dividends on shares, interest on positive carry currency positions, and a coupon on interest paying instruments – all this from one account on a single platform.
However, the Tracker Web app also allows clients to pick and select the exact amount of financing (if any) required for each trade. This means that clients now have the ability to select how much to risk on by providing customisable financing i.e. allowing traders to choose the exact level of funds needed to finance their positions. Clients thus have more control on how much they want to leverage on each and every position and in practice traders can hold long positions on a long term basis without utilising leverage or day trade with high leverage. Holding costs apply only to the borrowed amount.
The new system also allows fractional ownership which in practice means that CMC now supports micro investment minimums (i.e. fractional ownership) allowing clients to transact in fractions of a unit or in any amount of their account currency. So now you can deal, in say, a 10th of a Google share – in fact clients can trade from as little as 1/1000th of a unit, or for a specific monetary amount. Likewise, it won’t be a problem for clients who only have a small amount to invest. CMC Markets’ Tracker application also supports market and limit orders as well as take profit orders, stop loss orders and trailing orders.
Craig Inglis, product manager for CMC Markets stated that the tracker account which is effectively a CFD brings together the features of a share stock broking account with those of a traditional contract for difference trading account, with additional flexibility, lower costs and greater cross market opportunities.
Comments: This seems like a positive development from CMC Markets – the fact that holding costs only apply to the borrowed amount, not the total position size is nice. What is not so great, however, is the recent announcement they have circulated to clients alerting them of an increased overnight financing charge to 3% which may also apply to short positions.