Welcome to the latest in our new series of short-format Stock Pitches. We’ve covered CMC markets a few times on Stockopedia, most recently as one of Ed's 2026 NAPS. I wanted to highlight it now, not just due to its Super Stock status, but because it is a company that should benefit from current market conditions.
Disclosure: At the time of publication, I have a long position in CMC Markets.
The Pitch
CMC Markets (LON:CMCX) is a Main-market-listed FTSE250 online trading platform founded in 1989 by Lord Peter Cruddas. The company currently has Super Stock status, with a StockRank of 98, and top decile Quality and Momentum scores:
After delivering good results in November, the company said a strong start to H2 meant Net Operating Income would be 10% ahead of expectations. This is before the recent bout of volatility that has affected not only equities but also commodities and currencies.
When markets move sharply, CMC’s clients’ trading surges and revenues follow. After suffering from low volatility in 2023, revenues declined by over 30%. Net operating income and the share price have since recovered:
H1 FY2026 delivered net operating income up 5% to £186.2m, with management reporting that the volatility observed during the summer contributed to improved performance. With the company saying that they expected to exceed revenue consensus by 10%, the shares now trade on a forward P/E of 11. But with the chance of a further volatility-driven upgrade, CMC represents a leveraged bet on continued market turmoil.
The Big Picture
CMC Markets has several features that mark it out:
- Volatility winner: When global markets respond to the latest geopolitical news, it can be incredibly hard for investors to know how to respond. The spot oil price has risen in response to the closure of the Straits of Hormuz, but what happens if this is short-lived? Have equities responded too rapidly, or not quickly enough? Should investors buy, sell or protect themselves via options? None of these considerations matters to CMC markets, which benefit not from directional calls, but because markets are moving and this attracts trading volume.
- Dynamic Hedging: Very simply, CMC sit somewhere in between IG Group and Plus500. Whereas IG tend to hedge all client positions…
