Cryptocurrency CFDs Launched By CMC Markets

UK-based financial derivatives dealer CMC Markets has announced that it has added a ‎cryptocurrency derivative product to its trading platform.

CMC Markets offers online trading in spread betting, contracts for difference (CFD) and foreign exchange (forex) across world markets. It is headquartered in London, with hubs in Sydney and Singapore and a further 11 offices internationally.

The company launched CFDs and spreadbetting offerings for cryptocurrencies following significant interest from its users. Customers can now trade bitcoin and ethereum either as a spread bet or as a ‎CFD, with access to margin ‎and financing, as well as the ability to take both long and short positions. ‎The trading feature will only be accessible to CMC’s professional client base.

CFDs and binary options are financial products that give an investor exposure to price movements in securities without actually owning the underlying assets such as a currency, commodity or stock.

The company said they have been receiving significant interest from their clients for bitcoin ‎and ethereum CFDs. As a result, they have developed a new offering for this ‎unique digital asset class.

“We have built our bitcoin and ethereum cryptocurrency offering with our ‎clients in mind,” said Grant Foley, chief operating and financial officer at CMC Markets. “Like all other financial instruments we offer, we always ‎recommend that clients understand the risks and conduct thorough research ‎before trading.”

The company’s move to cryptocurrency comes in the backdrop of a sector-wide regulatory clamp down on CFD trading. In November 2017, The UK’s Financial Conduct Authority (FCA) warned investors about the risks in crypto CFDs. The FCA said these types of investments are extremely high-risk and speculative.

“The value of cryptocurrencies, and therefore the value of CFDs linked to them, is extremely volatile,” the FCA said at the time. “They are vulnerable to sharp changes in price due to unexpected events or changes in market sentiment. The value of some cryptocurrencies recently fell by more than 30% in a single day.”

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