70% of retail investor accounts lose money when trading spread bets and CFDs with this provider.
What is City Index?
City Index is a margin trading broker that offers CFDs, Forex and Spread Betting, the business was founded as long ago as 1983 which means they have been in operation for almost 38 years. City Index was originally a privately held company owned by City grandee Micheal Spencer the founder of ICAP.
However, it was bought by US brokers Gain Capital in 2014, who have subsequently been acquired themselves, in 2020, to form part of Nasdaq listed Stonex (formerly INTL FC Stone).
City Index now sits with that larger group. Stonex has more than 125,000 retail customers.
City Index has a strong and longstanding presence in financial Spread Betting, where it is a genuine rival to IG Group but it also offers CFD trading and margin FX and has offices in London the UAE, Singapore and Australia.
City Index Trading Account
City Index offers separate trading and Spread Betting accounts though clients can choose to combine those activities within a single account if they wish to.
Existing customers can also add CFDs or Spread betting to their account, by simply applying for the required additional account, which will then be linked to their active account. Account applications can be made online and if CIty Index can verify you electronically your account could be opened immediately.
City Index offers more than 12,000 markets to its clients including equity indices, shares and ETFs, alongside commodities and FX. Their services are aimed at all types of traders from newbies and novices, through to experts
City Index Mobile App
City Index has its own mobile trading apps for both Android and iOS devices the apps can be downloaded directly from the respective app stores or via links on the firm website.
City has recently updated the Android app and as the reviews in the Google play store make it clear there have been teething troubles, and there are less than favourable comparisons between the current and previous versions of the app.
In the Apple app store, the iOS version of the app has seen half a dozen updates between January and April. Suggesting that it’s a work in progress.
The Android version of the app has been installed more than 5000 times. Apple doesn’t provide the number of downloads of the iOS App however, you will need to be running iOS version 12.0 or later to use the app on your device.
Using and navigating the app is intuitive, with icon-based menus for markets, watchlists, alerts etc. There is a news feed and economic calendar, as well as technical analysis from Trading Central. You can draw and edit charts on the app and add up to four indicators to them.
Though the charting package can feel a little cramped on the small screen of a mobile device.
Opening a demo account and then downloading the app and logging in, is probably the best way to test out City’s mobile trading platform.
City Index Pros
- Well established business
- Offers CFDs and Spread Betting from one account
- City has an online trading academy for those new to the markets and courses for more experienced traders too
City Index Cons
- City doesn’t currently offer physical share dealing
- City has a narrower offering in FX than rivals CMC
- No ISA or SIPP investing available
City Index Pricing, Charges & Fees
City Index charges a mix of commissions and spreads depending on the products that clients are trading The firms website has a whole section dedicated to its pricing and you can also find information about spreads and or commissions, on particular products, using the market 360 view on the trading platform.
Spreads on index CFDs start at a minimum of 1 point for the FTSE whilst CFDs over UK stocks attract a commission of 0.08% with a minimum ticket charge of £10.00.
Charges on Spread Bets vary depending on whether you use daily funded bets or monthly/quarterly contracts but on a daily funded bet on leading UK equities you would pay a spread of 0.10% per side, ie on the open and the closing leg of the bet.
Rebates on activity are available to professional clients through City Index but these are not available for retail traders.
Overall City’s offering is competitive as you would expect from one of London's oldest margin trading brokers. You will probably be able to find certain products that are cheaper elsewhere however when choosing a broker we would always advise taking a holistic view of a service rather than basing a decision purely on price alone, particularly when you are starting out in trading.
City Index CFD Trading
CFDs are Contracts for Differences, cash-settled OTC traded contracts that allow a trader to speculate on the rise and fall in the price of a financial instrument without ever owning that instrument.
Over the last two decades, CFDs have become incredibly popular with both retail and professional traders alike. City Index offers CFDs over equity indices, individual equities and ETFs. Commodities such as gold, silver and oil, as well as government bonds and interest rates.
Using CFDs you can trade long or short of a market with equal ease, without having to worry about making or taking delivery of the underlying. CFDs, have no fixed expiry dates or contract sizes and are funded daily, though day traders do not incur those costs.
In terms of trading charges, these vary by instrument, equity index CFDs are traded with a bid-offer spread, so for example the FTSE 100 has a minimum spread of 1 index point whilst the Dow 30 has a minimum spread of 2 points, the Germany 30 index or DAX has spreads from 1.20 index points.
CFDs on single stocks and ETFs attract a commission charge, in Europe and the UK these start at 0.08% of the consideration of the trade with a minimum ticket charge of £10 or €10. Whilst in US equities it’s a flat fee per share of 1.80 cents with a $10.00 minimum ticket charge.
City Index is competitively priced in terms of spreads on equity index CFDs and has lower commission charges than some of its peers on signal name CFDs over stocks and ETFs.
City Index Forex Trading
Forex or FX trading involves speculating on the value of one currency in terms of another. Currencies trade in what are known as pairs and the rates of exchange between those currency pairs vary almost continuously based on changes in trader sentiment, news, order flow and the relative valuations of other currencies.
FX markets trade 24 hours a day five days per week, from late on a Sunday evening London time until the close of US markets on the following Friday evening.
City Index make markets in 84 FX pairs and crosses (crosses are FX rates that don’t include either US dollar or the Euro) City makes two-way bid-offer prices with, a spread between them.
For example, the minimum spread on EURUSD is 0.5 points though the typical or average spread that traders can expect to receive at City is 0.8.
GBP USD has a minimum spread of 0.90 and a typical spread of 1.80. whilst the values for USDJPY are 0.60 and 0.80 respectively.
As well as making markets in rolling spot forex City also offers a range of FX forward contracts with fixed monthly or quarterly expiries, making them more akin to FX futures.
You can trade FX using City’s in-house desktop and mobile platforms or should you prefer you can use MT4 to trade.
City Index has higher minimum spreads than some competitors, for example, FX broker Pepperstone has minimum spreads on EURUSD from 0 points though you will pay a commission to trade on that basis. The forward contracts that City offers, provide traders with flexibility, fixed costs and the potential for spread or arbitrage trading against the spot market.
City Index Spread Betting
Spread Betting offers an alternative way to speculate on the markets and rather than trading, spread bettors bet on the outcome of say, the rise or fall in the FTSE 100 index on a given day.
And because these contracts are structured as bets, under current UK legislation any profits made from Spread Betting are not subject to UK capital gains tax. Though that benefit is only available to individual UK taxpayers and not corporates or partnerships.
Spread Bets are similar to futures contracts having a fixed expiry and pricing which includes a cost of carry calculation in the quote. Though, these days there are also rolling daily bets that look more like CFD and which attract rollover charges if held open overnight.
Spread Bets at City are available on equity indices, single name stocks and ETFs, Commodities bonds and interest rates and FX. City also has an options desk that makes Spread Bet prices for various options markets.
Spread Bets are traded via two-way bid-offer prices the difference between the bid and offer representing the spread. These vary by product and contract but in the FTSE 100 index City charges a minimum spread of 1 index point and on the Germany 30 or Dax it charges 1.20 points. You can trade Spread Bets on leading equity indices upto 24 hours per day.
Spread charges on individual stocks vary depending on whether you use monthly and quarterly contracts or daily funded bets, the market you are trading in, and even the price of the stock itself.
City Index competes favourably with its main peers as far as Spread Betting on indices are concerned, However, the pricing around Spread Bets on shares and ETFs are somewhat more opaque for the reasons mentioned above.
City Index Trading Platform
City Index’s free desktop trading platform is web-based, meaning there is nothing to download you simply log in using your credentials and the platform opens in your internet browser.
You navigate around the platform using a menu of tabs at the top of the screen which includes titles such as browse markets, market analysis, platform settings etc.
You can create and customise your own workspaces and layouts adding quotes, charts and news as required. However, you can also use City’s Market 360 feature to create a topdown view of an instrument in one click which contains charts, quotes, news and product information all in one place.
Doing this also allows you to toggle through the instruments that populate your watchlist.
You can trade or place pending orders directly from a chart or you can click on the bid-ask quote at the top of the page in the 360 view. You can instantly access technical analysis, calendars and newsflow by clicking on the market analysis tab.
Overall the platform is very intuitive to use and it has a clean, clearly laid out interface which most users will like.
City Index Demo Account
City Index offers a demo account and signing up for this is probably the best way to get familiar with their trading platforms and to kick the tyres of City’s offering.
We found it tricky to set up the demo account in the mobile platform but simplistic to do so when at our PC. Sowe would suggest that you do that.
However, once our demo account had been created logging in on the mobile app was very straightforward. Overall the demo account provides a very good simulation of what live trading through City Index would be like and our overall impressions were very positive.
City Index Education & Analysis
City Index offers training and education for both new and novice traders, and those, that are more experienced the programs cover areas such as technical analysis, risk management and trading strategies.
There is a slick 6 part TV series called the Trading Academy that follows the progress of 8 novice traders in a competition, that runs for 6 weeks and is hosted by two City Index professionals.
A library of other videos that include a teach-in on spread betting and using City Index‘s research and analysis tools.
There is a nice mix of written and video content that can provide a solid grounding for those that are interested in learning about trading. And all of the content is available for free and without the need to open an account to be able to view it. As such it’s one of the better educational offerings out there.
City Index Professional Account
City offers a professional account to qualifying traders who need to demonstrate a combination of experience, knowledge, trading activity and wealth.
Professional clients are exempt from the FCA/ESMA margin restrictions and can thus gain access to much higher levels of gearing in their trading. For example, margin rates for major equity indices are as low as 0.25% or 400:to1
Professional clients can earn £1000.00 by switching to City Index. They also get access to a dedicated client relationship manager credit facilities and hospitality when available.
Professional clients won't receive benefits such as negative balance protection, meaning they can lose more than their stake or deposit, and Cityindex can treat them as experts, and use different language and terminology with them than they would when communicating with a retail customer.
City Index Alternatives
City Index competes directly with IG Group, CMC Markets, ETX and Spreadex though that focus may change in future as it’s now part of a much larger international business.
The main differences between City Index and its peers come in terms of market coverage and products. For example, CMC has a far wider FX converge than City and IG Group offers investment products such as physical share trading, ISAs and managed funds.
City’s product mix may change going forward and it’s already offering its clients the chance to buy physical gold and silver through a sister company. within the Stonex group.
City Index Versus CMC Markets
CMC Markets is more technology-focused and is building a business that can provide data services and brokerage to institutions and other third parties as well as its individual traders. City’s focus is almost entirely on trading and making prices to its spread betting and CFD customers, areas which have stood it in good stead for several decades.
City may expand its products and services as it becomes further integrated into its new parent company Stonex.
In terms of choosing between City Index and CMC Markets the decsion will probably come down to their respective market coverage and products, and which of the two trading platforms chimes with you the most.
Both brokerages are aimed at clients at all stages of their trading journeys from newbies through to pros, though City’s educational offering is probably more approachable as far as novice traders are concerned.
City Index Versus IG
This is the longest standing rivalry in the margin trading space City and IG have been competitors for almost 40 years and know each other well.
IG has expanded into different product areas, by for example partnering with BlackRock to create its managed fund offering, and building a Multilateral Trading Facility or MTF, on which to trade listed geared products in Europe.
City Index and IG group are aimed at traders from novice to expert and both provide educational materials, research and analysis to support their client’s trading activities.
IG also has a dedicated community where clients can swap ideas and experiences and answer questions, once again this not something that City Index offers.
On a practical day to day level, the most obvious difference between the two firms is that IG offers physical share dealing and other investment services whilst City does not.
As a consequence, IG has a wider market coverage and like CMC, IG has an institutional facing prime brokerage business, once again City does not.
If trading and investing in physical shares rather than just CFDs or Spread Bets is important to you then you should consider IG, However, you won’t find a great deal of difference in the pricing between the two businesses, though City does have the edge in fees for the UK and European equity CFDs.