CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 73% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
U.K. brokerage City Index’s parent company is U.S. based and publicly traded GAIN Capital Holdings Inc (NYSE:GCAP). It specializes in CFDs, spread betting and options in forex, indexes, shares, commodities, bonds, interest rates and cryptocurrencies. The GAIN connection is evident in this well-organized and highly competitive brokerage that was originally founded in 1983. An impressive product catalog, excellent platform choices and robust research facilities cater to a broad spectrum of traders and investors, from low-skilled retailers to well-financed institutions looking for sophisticated hook-ups and a lightning-fast trading interface.
City Index scored well in most review categories, but flaws are still evident, including confusing and conflicting options-fee disclosures, a lack of volume discounts and no secondary insurance coverage.
Large product catalog
Sophisticated back testing
No volume discounts
No social trading data
Margin discounts restricted to professional accounts
The broker is licensed through Financial Conduct Authority (FCA) Ref No. 113942 and is compliant with European Securities and Markets Authority (ESMA) rules that limit leverage and provide negative balance protection (so you don’t lose more money than you put in the platform). An ESMA-mandated disclosure indicates that 73% of retail accounts currently lose money when trading CFDs, which is about average in the Eurozone. The U.K. Financial Services Compensation Scheme (FSCS) provides up to £50,000 coverage in case of a broker default, but they list no additional or private coverage.
City Index offers guaranteed stop loss protection for a premium as well as a sophisticated set of conditional orders within their trading platforms. Oddly, the firm’s small Singapore branch utilizes two-factor authentication for added security, but this useful feature wasn’t found at the U.K. site. The broker acts primarily as a market maker, like most European CFD brokers, raising conflict of interest issues. However, they offer central clearing on “certain markets” as a free service that requires an additional client application.
Fee and spread disclosures provide extensive transparency, but it was difficult to find options costs. Information on fee schedules was conflicting, and it was hard to find cost comparisons. They offer fixed and/or variable spreads, depending on venue, but the disclosures would greatly benefit from side-by-side cost itemization. It also isn’t clear how much spreads widen during off-market hours, raising the potential for unanticipated trading costs.
The broker’s proprietary Web Trader offers advanced charts, custom indicators, and fully customizable workspaces, but it does have fewer features and less customization than the downloadable AT Pro platform. The AT Pro platform includes advanced technical analysis with more than 100 indicators, detachable charts, and strong customization. Real-time Reuters news in both platforms keep account holders in touch with business developments, while AT Pro’s historical back testing and automated, coded trading add firepower rarely found at European brokerages. In-platform access to dozens of trading ideas round out an impressive list of advanced features.
A side-by-side comparison of account types shows that AT Pro is only available to professional traders (an ESMA designation that requires a large account and industry experience). This information conflicts with other site disclosures and contact with a sales agent through online chat confirmed that professional status isn’t required to use the software.
City Index mobile versions for iOS and Android allow easy synching between platforms, with well-organized menus but fewer features and limited customization. Account holders can set custom price alerts, build watch lists, chat with customer service and do basic charting, but the apps don’t provide a real alternative to the standalone or web platforms. Fortunately, the order interface looks identical to the desktop and web programs, allowing adequate risk management while on-the-go.
Research and News
City Index has built an impressive research portal, with in-house analysts providing daily market outlooks and updates through videos, webinars and a tag-based news page that’s full of fundamental and technical reports. Poor integration between YouTube and web site video content makes it more difficult to find topics of interest, but other research material is well organized, and many categories are also accessible through the trading platforms.
Dozens of trading ideas and opportunities utilizing diverse market approaches are listed at the site and in-platform, but some content requires paid subscriptions. Platform research tabs open into Trading Central, which is divided between customizable technical and fundamental scanners. The fundamental scanner provides a wealth of filters and include current prices vs. the broker’s calculation of fair value.
A Training section features written how-to-trade tutorials organized into six sections. However, just four of the six open to standard course materials while the others duplicate research or marketing content found in other sections. A YouTube review found an excellent series of TA videos but none were linked directly to the web suite. The broker also provides how-to articles on each of the major trading venues as well as a full-featured help and support database.
The City Index API through GAIN Capital appears restricted to institutional and white-label partnerships, lowering the value of the AT Pro back-testing and automated trading capacities. In addition, they offer no VPS hosting, missing an obvious business opportunity. No trading volume discounts were found, discouraging large-sized and higher skill traders from opening accounts, despite Premium and Professional tiers that provide secondary bonuses.
The broker offers central counter-party clearing on “certain markets” through the Omnibus Segregated Clearing Account (OSCA). This isn’t the same as direct market access into the interbank system because the broker still operates a dealing desk, first executing the trade and then transferring the client’s credit exposure to the central clearinghouse. A separate application is required to gain access to this account functionality.
An impressive product catalog includes forex through FX via MT4, CFDs and spread bets, as well as CFDs, spread bets and options on indexes, shares, commodities, metals, bonds, interest rates and cryptocurrencies. Clients can trade more than 4,000 shares from multiple exchanges while index and metal CFDs can be traded on a cash or futures basis. Cryptocurrency coverage is limited to five major markets.
Commissions and Fees
Minimum and average spreads are competitive, at 0.50 pips minimum and 0.69 pips average for EURUSD. Indexes list a 0.40 minimum spread on SP-500 CFD and spread bets but no average spread. Disclosures on other markets are limited to minimum spreads or real-time bid/ask spreads.
The broker offers fixed spreads for many indexes and commodities and variable spreads for forex and other markets, but read the fine print because this categorization isn’t intuitive.
Withdrawals are free and no minimum deposit is needed to open an account. However, £12 per month is charged to accounts with no activity for one year or longer. Withdrawal and other fees are fully disclosed on an easy-to-read pricing page that contained few omissions.
Customer support hits all the bases, with 24/5 phone support through London local and international phone numbers. Online chat is available to new and prospective clients, but users need to “talk” with an annoying chat robot before getting to a human customer representative. The broker accepts support questions through phone, chat or email, and a fairly strong social media presence is used primarily to distribute research and marketing materials. The help and support FAQs are well-organized, allowing for quick retrieval of needed information.
What You Need to Know
City Index offers an excellent fit for new and mid-level traders seeking excellent research, solid education, reliable customer service and a broad range of competitively-priced markets. The GAIN connection goes a long way in building trust while the broker’s 36-year history and London location will instill confidence. Full-time and professional traders may be forced to look elsewhere due to the lack of volume discounts and weak connectivity through VPS and API interfaces.
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