Markets.com Review 2019

Safecap Investments Ltd, Cyprus subsidiary of the United Kingdom’s Playtech PLC owns and operates Markets.com, a contracts-for-difference (CFD) broker specializing in forex, shares, indices, commodities and cryptocurrencies. They are not Financial Conduct Authority (FCA)-regulated and UK traders will find no spread betting, a market venue that offers special tax advantages over CFDs. The company was formed in 2010 and has gone through several reorganizations prior to the current business identity.

The broker follows the typical EU dealing desk model that makes markets against clients, raising conflict of interest issues. Cost disclosures are frustrating, listing minimum spreads without average spreads, but context menus detail overnight lending, margin and rollover costs. The web site is missing marketing and descriptive elements, with no menus detailing proprietary web and mobile platforms or offering side-by-side comparisons with Metatrader 4 and 5. The same holds true with research, educational and customer service content, with a few dead links, a well-hidden phone number and a bare-bones FAQ.

The proprietary web platform is surprisingly robust, featuring an excellent collection of fundamental tools that include client sentiment, insider activity, analyst recommendations and hedge fund activity. It’s unfortunate that clients using Metatrader 4/5 pay higher minimum spreads without in-platform access to these impressive resources. It’s another reason that web site materials should list platform contents side-by-side.

$100 minimum is needed to open an account that pays bonuses scaling with higher deposits. A single instructive page outlines rewards as well as available platforms and a simple but effective rebate program that lowers trading costs for higher volume. However, poor documentation adds confusion because the page lists “classic and premium” accounts undefined at the web site. A search found a second page that lists “premium spreads”, sub-dividing into “classic” and “markets X” headings. This link is disconnected from the site.

Markets.Com is licensed through Cyprus Securities and Exchange Commission (CySEC) and has no Financial Conduct Authority (FCA) registration, bringing UK protections in line with mainland Europe. The broker is complaint with MiFID II requirements as well as European Securities and Markets Authority (ESMA) rules that that limit leverage and provide client services that include negative balance protection. An ESMA-mandated disclosure indicates that 77% of retail accounts lose money when trading CFDs, on par with EU rivals.

The money handling disclosure for mainland Europe states that client funds can be held outside the European Union, increasing risk in case of a bank default. Compensation for broker default is capped at EUR 20,000 through the Cyprus Investment Compensation Fund (ICF) and they carry no private or additional insurance coverage. No guaranteed stop loss protection or 2-tier authentication is offered, beyond Metatrader’s one-time passwords (OTP).

Site disclosures are limited to minimum spreads, with no data on average spreads in the last month, quarter or year. They also fail to disclose how much spreads can widen during off-market hours, raising the potential for higher than expected trading costs. This lack of transparency makes it harder for prospective clients to evaluate the broker’s competitiveness before opening new accounts.

The Markets.com web platform competes with standard Metatrader 4/5, providing adequate charting, with the ability to split into multiple views of the same instrument, a healthy list of indicators and a few drawing tools. Educational and research content embedded within the platform is impressive, underpinned by Trading Central beginners-to-advanced tutorials, video-on-demand, and an excellent suite of fundamental research products.

Platform customization is limited, with a “favorites” watch list but no way to save multiple lists. Weak order management offers generic stop loss, take profit, limit orders and nothing else. A context menu for each instrument lists overnight lending fees, as well as margin and leverage information. All markets showed overnight lending fees for long and short positions while many rivals post margin credits on short sales.

Markets.com mobile apps synch to the web platform but provide a sub-standard feature set and limited customization compared to rivals, with streaming quotes, weak order management and useful client sentiment. Rudimentary charting swivels into landscape orientation but there are no indicators, limiting visual analysis. There’s no way to set SMS price alerts and research content in the web version has been removed. New orders can’t be set during off-market hours.

The broker has partnered with third parties to build robust in-platform research that features all sorts of useful decision-making tools. Traders can find listings of insider transactions, hedge fund activity for individual stocks, and buy and sell recommendations from both the analyst and trading community. A signals breakout lists currently active buy and sell signals below the instrument list for handy reference. The platform also includes client positioning data next to instruments, updated every few minutes, as well as an economic calendar.

There’s no real-time news function, platform or web-based, and research materials aren’t available off-line for easy reference. This omission also makes it harder for Metatrader 4/5 users to stay informed, forcing them to log onto a second platform. It’s also frustrating that the web site’s sub-menus under the tab “Trading Tools” list descriptions of platform-based research content but no actual research.

The heading “Education” under the web site’s trading tools menu lists just three categories: webinars, platform tips and Markets.Com Trading Platform. The two “platform” sections feature a few how-to video tutorials and a marketing blurb about the latest software update. The webinar section showed four upcoming, one-hour presentations on basic and advanced topics but no archive, which is a major omission.

The web platform provides much stronger educational content, with the knowledge center featuring beginner, intermediate and advanced technical analysis presented by well-known market technician Martin Pring. However, the “Fundamental” tab is disappointing, with nothing but an economic calendar. This could make it difficult for account holders to understand and evaluate detailed fundamental research data

New clients receive bonuses based on initial deposits while a 5% weekly spread rebate works as an efficient volume discount program. Higher level traders will find no VPS hosting outside of Metatrader’s VPS subscription and there’s no API to run algorithms or other automated programs. In addition, the web platform can’t handle system building because it has just five years of data and no historical back testing capacity. As previously noted, some materials refer to account tiers that can’t be found, other than professional status defined by 2018 ESMA rules.

The product catalog covers all the bases, with standard sets of currency pairs, shares and ETFs, indices and commodities, all tradable solely as CFDs. The broker does not offer spread bettering to UK or Irish clients. Six cryptocurrencies and 4 bond markets add opportunity along with innovative ETF-type funds covering an esoteric listing that includes the Bill Ackman Blend, Cannabis Blend and provocative Trade Wars Losers Blend.

Minimum spreads are above average, at 1.90 pips for EURUSD on the web platform and 3.00 pips on Metatrader 4/5. Cryptocurrency minimum spreads are among the highest in Europe, at 140 pips for Bitcoin and 15.00 points for Ethereum. There’s no disclosure on average spreads for the month, quarter or year, or how much spreads can widen during off market hours. Overnight lending fees and other margin information is clearly stated but short sellers receive no overnight margin credit. All trade transactions are executed through variable spreads, according to the fine print, making minimum spreads less predictive.

Withdrawals are free and received within two to five business days while dormancy fees are higher than industry average, with $10/month charged after just three months of inactivity. That fee was well-hidden within the fine print and not disclosed on marketing pages, adding to trust concerns. Shares are traded at 5: 1 leverage and a thorough review uncovered no minimum costs for share trades.

The Contact Us button leads to an e-mail entry form and no phone number. The “Support Centre” opens a bare-bones FAQ, along with contact and chat links. The contact button also opens to a data entry form. The chat button is functional but dated, referring to a holiday that took place 6-weeks prior to the review. A search for the broker’s phone produced a page with 24/5 local and international contact numbers, adding to a growing list of orphan pages while highlighting the dysfunctional web site theme. Markets.com’s Twitter and Facebook pages are used primarily for commentary and marketing.

The Markets.com platform provides an innovative interface for trade execution, appealing more to fundamentally-oriented than technically-oriented account holders, who could choose to pay Metatrader’s added costs. The brokerage is hampered by a disorganized web site that fails to promote the most appealing features while adding confusion about account types and perks, bottom line trading costs and customer service contact.