Morning all,
Just been re-reading the latest CMC trading update from a couple months back.
Can anyone clarify what "capture a higher percentage of our premium client income" actually means please? Does it simply mean "we've found a way of holding on to even more of our punters hard earned dosh" or am I being overly cynical?
Many thanks,
Mjc
Basically a long-term, cautious investor who likes the occasional small cap speculative buy.
If you wanted to give them the benefit of the doubt it might mean, “we want to get the high rolling punters to spend more time and money trading on our platform rather than that of the competition such as IG or Spreadex (and thereby make more income from capturing a higher proportion of their bid/offer trading spreads)”...... Then again, you might have been right with your own interpretation.
gus - many thanks for your comment.
CMC is clearly a well run company (I've had a recent profitable trade in their shares - more of a "flutter" than a properly thought out investment).
My original interest was to see if they could be a possible replacement for my Halifax account - I think they're offering a full service dealing account in Australia and a couple of their comments seemed to indicate they're thinking of offering a similar service here.
They obviously aren't doing so at the moment and only offer spread betting and CFDs, neither of which appeal to me.
Having taken a good look at their web site I'd say it's well designed for it's target market (i.e. informative and visually addictive - not necessarily in that order).
I'll keep them on my watch list for now but probably won't be making any further trades unless they move into full service share dealing.
Maybe they are saying move to higher margin dealing, IG Group (LON:IGG) have just stopped CFD/SB in about 900 shares which they say they make very little profit on.
Seems others are following suit.
This will exclude a lot of smaller PIs with Robinhood type trading which has caused many problems for platforms this year.
Hi MJC,
Client income is dependent on the retention of revenues for trades placed by clients. Cmc Markets (LON:CMCX) hedge some of this risk, so achieve margin conversion of less than 100%. Cmc Markets (LON:CMCX) this will typically be 80% going forward. I put the assumptions of my model below and the link below.
https://www.stockopedia.com/co...
As always DYOR
BSV
