'Don't plan for the future' based on virus-driven volatility

Online trading platform CMC Markets said on Wednesday client activity in the third quarter eased compared with earlier in the financial year when market volatility amid the pandemic was the highest since the 2008 financial crisis.

CMC and other main industry players IG and Plus500 have seen profits surge on strong volumes driven by major macroeconomic events including the pandemic, the US 2020 presidential election and uncertainty over a Brexit trade deal.

"We wouldn't necessarily expect this heightened levels of volatility to continue and we don't plan for the future based on these elevated levels," Deputy Chief Executive Officer David Fineberg told Reuters on a call.

As major countries begin vaccinating their populations this year, some of that frenzy in the markets has arguably come down as reflected in the CBOE Volatility Index, which has remained at levels significantly lower than a peak hit in October.

CMC pointed to a healthy pipeline of projects that will drive new revenue streams separate from its main stockbroking and contracts for difference (CFD) businesses.

"The company had a very good underlying profitability prior to these elevated levels of market activity, so we are very confident and positive about the future," Fineberg said.

CMC, which through its platform enables clients to trade up to 10,000 financial instruments, expects annual net operating income to be at the top end of a 370.2-387.5 million pounds market consensus. It reported 252 million pounds in its last fiscal year.

Shares were up 0.3% at 4.3 pounds in late morning trading, following a 167% surge in 2020.

The company said its investment in platform technology continued to attract and retain premium clients, and that its platforms had no outages in November when Pfizer announced positive results from its COVID-19 vaccine trial.