Dear Trader

On 27th July 2007, CMC markets will be making the following changes to our UK and European Sector CFDs in order to improve both the accuracy of UK Sector pricing and speed of execution.

How will UK and European Sector CFDs be quoted?

Currently we offer a fixed spread on all UK and European Sector CFDs. This form of pricing may not always accurately reflect the pricing of the underlying share CFD within a Sector.

From 27th July 2007, CMC Markets will offer a new and dynamic form of Sector CFD pricing. Spreads on sectors shall no longer be fixed, but rather be on a variable basis. The new spread will depend on the spreads of the individual constituents that comprise the sector as well as their respective weighting. The new spread will reflect changes in the prices of the constituent Share CFDs on a real time basis.

Example on new UK Sector CFD Spread
UKMINING Sector CFD

Rio Tinto (RIO) is a major constituent of the UK Mining Sector CFD. If during the course of trading RIO widens its spread, the UKMINING CFD may in all likelihood widen its spread accordingly. As mentioned previously, this will depend on both the weighting of the constituent CFD in comparison to the Sector CFD as well as the movements of the other constituents during the respective time period.

Alternatively, should the spread of the constituent CFD narrow, such a change will also be reflected in the respective sector, subject to the same conditions as mentioned above.

How does this affect you?

A variable spread for UK and European Sector CFDs will mean a more accurate pricing structure. It will reduce the instances of re-quoting on UK and European Sector CFD prices, particularly during volatile periods in the market.

Change in Spreads

Below are a few examples of the changes in our UK and European Sector Spreads.

If you have any questions regarding the Sector CFD changes above, please contact the CFD dealing desk in London on +44 (0)20 7170 8203.

Best regards
The team at CMC Markets