The CMC Markets share price (LON: CMC) slumped by over 25 percent in early trading as the financial markets platform confirmed that new and existing clients traded the stock market less.
In an update for the five months ending 31 August, CMC revealed that market activity was continuing its relative decline and remained subdued following a fall in activity during the first quarter.
CMC also revealed that its client income retention has also fallen slightly below its target of 80 percent, but this target is expected to be restored during the remainder of the year.
With all things considered, the business most known for its spread betting service expects that net operating income should be within the range of £250-£280m for the full year.
Where next for the CMC Markets share price?
Today’s update is a reminder of what may happen to a certain number of businesses that have flied high during the pandemic.
A decline in market activity and volatility would clearly be of concern to a business like CMC.
However, investors will be optimistic on a couple of fronts with overall monthly client active numbers up around a third from pre-pandemic levels and AuM at close to record highs.
Thus, traders will be waiting to pounce on any further market volatility and thus boost earnings for CMC.
CMC also added that it believes in its long term growth plans including the continued development of its investment platform which should reduce reliance on its non-leveraged products.
The CMC markets share price is currently trading at £3.13 following today’s fall by over 25 percent.