Review of City Index Broker
Operating since 1983, City Index is a broker that provides access to CFDs, forex, and spread betting. City Index is privately owned but is a subsidiary of the publicly listed Gain Capital which acquired it in 2014. Gain Capital provides online trading services to over 140 countries globally. Their services are mainly focused on forex and CFDs. City Index is just one segment of their overall service offering. Gain Capital is a public company listed on the New York Stock Exchange and therefore has to comply with high standards of corporate governance and financial reporting which in turn extends itself to City Index. They are also regulated in eight jurisdictions worldwide. Some of the other brands owned by Gain Capital include forex.com and saltinvest.com. City Index itself is headquartered in London and is regulated by the Financial Conduct Authority (FCA). City Index also has offices in Singapore, Dubai, and Australia.
Markets and Products
City Index provides access to both spread betting and CFDs. Its spread betting services are restricted to UK customers only. There are over 12,000 markets offered which include instruments that provide access to prices from commodities, indices, shares, forex, and cryptocurrencies.
Trading Platform and Features
City Index has trading platforms accessible across web, mobile, and desktop. The web-trader is based on HTML5 technology and allows traders to access technical analysis charting tools and trade straight from the web browser. There is also an application for both iOS and Android which can be downloaded.
There are also two options available for desktop. The hugely popular MetaTrader4 (MT4) is one of the options. MT4 provides a wide array of charting tools and trading technology which can be used so that traders can speculate straight from their desktop. MT4 also provides users with the ability to backtest and automate their own trading strategies.
The other option is AT Pro which is a desktop application designed for more advanced users. AT Pro has more powerful technical analysis tools and allows traders to execute advanced order types. There is also a real-time news feed integrated from Reuters so that traders can stay up to date with key news developments.
Accounts Types
There are a number of different accounts which traders can choose to set up. The three tiers of account are Trader, Premium Trader, and Professional Trader. Professional Trader accounts benefit from significantly better margin rates and fees. For example, Professional Trader accounts can open up a position with margin as little as 0.25%. These accounts also get a £1,000 bonus from City Index. To set up a Professional Trader account requires a portfolio size of at least €500,000 and at least ten trades per quarter that were of a notional value of at least £10,000 in shares or £50,000 in forex. Clients can meet just one of these criteria instead of both if they have at least one year working in the financial sector.
The Premium Trader account has the same fees and margin structure as the standard Trader account but it benefits from having a personal relationship manager assigned to the account and higher priority when making trading orders and when availing of customer service. Normal Trader accounts need to be invited to upgrade to a Premium Trader account.
An identification document and proof of address are required to open an account. Accounts are not available in the United States but users who wish to set up an account in the United States will be redirected to Forex.com. Canada is also restricted and will be redirected to Forex.com.
There is also the option to set up a demo account free of charge. Users can avail of a demo account where they trial the trading platform with virtual money for a period of twelve weeks which is typically longer than competitors.
In terms of fund storage, all clients money are segregated into separate accounts. In the event of a liquidation of the company, clients may be compensated of up to £85,000 by the Financial Services Compensation Scheme (FSCS).
What about the fees?
The fee structure varies for City Index is based on what kind of account the client holds and also based on what instruments they are trading. For example, Professional Trader accounts will avail of a more attractive rate than standard accounts and the rates for trading CFDs will be different from the rates for spread betting. Here is an overview of the spreads and margin rates for some of the spread betting products on City Index. There are no commission fees associated with spread betting on the platform as all fees are incorporated into the spread. There is also no commission charged for CFD trading with the exception of shares trading.
SharesFrom 0.1% each sideFrom 20%
| Market | Spread | Margin |
|---|---|---|
| Indices | From 1 point | From 5% |
| Forex | 0.5% plus | From 3.33% |
| Bitcoin | From $40 | From 50% |
| Interest rates | 0.02 points | From 20% |
A financing rate applies to all contracts which are held overnight apart from futures. The financing rate is LIBOR + 2.5% for long positions and LIBOR – 2.5% for short positions.
There are a number of other charges that accounts on City Index will be subject to. If an account is inactive for twelve months, it will start being charged £12 per month until the account becomes active again.
Anything else I should know?
City Index also has tools which provide education to traders on how to improve their trading skills and also how to trade in general. The resources teaching users how to trade in general cover topics such as how to place orders and educating on the different types of products. Furthermore, City Index has a team of analysts that release daily updates assessing market conditions and analysis of key technical and fundamental indicators as well as economic figure releases. It is also easy for users to assess customer support from the website. Users can contact support via email address, over the phone, or from a live chat.
How does it compare with competitors?
Some of the other main providers of CFD and spread betting are Pepperstone and Plus500. This is how City Index matches up.
| Company | Private/Public | Operating Since | Approx Revenue (m) USD |
|---|---|---|---|
| City Index (GAIN) | Private | 1983 | $341 |
| Pepperstone | Private | 2010 | $176 |
| Plus500 | Public | 2008 | $720.4 |
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