24 Aug CMC Markets Refunds My Money
In an earlier post, I complained about CMC executing my stop orders at bad prices. They have conducted an investigation after I have written to them. The good news is: they are willing to refund both orders as a goodwill gesture. Here’s what happened:
Difference between CMC and Stock Exchange Bid and Offer Prices
Ameriprise Financials (AMP) trade: They are investigating about the difference in Bid/Offer between CMC and the Stock Exchange. I suppose they meant that CMC pulls actual bid and offer prices directly from the exchange. And this data is what we have been paying for. However, there was a difference between CMC bid and offer vis-a-vis the exchange’s bid and offer for this counter. They said they will get back to me on this.
Meanwhile, I will accept the refund for this counter. I do not consider this as goodwill since it is their error.
Order was executed at the Right Bid price
Huntington Ingalls (HII) trade: They said that the sell stop order was correctly filled for this counter as there was no difference between CMC’s and exchange’s bid and offer. The bid price went below my sell stop order and triggered the transaction. However, the transaction at this bid price does not exist because CMC does not surface orders and transactions to the exchange.
I am lazy to check whether the bid price was indeed below my sell stop order. I assumed they have done the necessary checks and hence, I am not accepting the refund for this counter.
Customising Stop Loss Order
CMC allows customising of stop orders. They have described the various order types and the ways to customise them in this document. By default, buy orders will be filled at the ask price while sell orders will be filled at the bid price. I am incline to change the setting to mid-price. This means that my orders will only be filled in between the bid and ask spread.
Even so, this does not guarantee their Bid/Offer will always be the same as the Exchange. I am not sure how we can police the accuracy of their data in the future.
Use CMC or not
A handful of readers have asked me to switch to another broker after this incident. I would like to say that I already have other accounts with IG Markets, City Index, POEMS, Think or Swim and Interactive Broker. I told those readers that I will continue to use CMC because I want to continue to review the brokers and show you the pros and cons for each of them. I encourage you to share your experiences on BigFatPurse so that retail investors like you and me have a platform to voice our opinions. Let’s look after one another.