Lloyds stocks have been performing well recently. They have increased by approximately 36% over the past year.

However, this return seems rather paltry compared to the profits generated by financial stocks in FTSE250 index. Thanks to these shares, investors could gain about 20 percentage points.

Hot stocks on the FTSE 250 index

The one I’m talking about is this CMC Fair (LSE: CMCX). It is a leading online trading and investing company.

Founded in 1989, today it operates in 12 countries. Services offered include stock and ETF trading (many commission-free), currency trading, spread betting and contract for difference (CFD) trading, as well as white label solutions for third-party businesses.

CMC shares are currently trading at £3.27. This means that £1,000 can buy approximately 305 shares (excluding trading commissions).

However, the company’s shares – which are up almost 60% over the past year – may not stay at this level for long. I believe that it may only be a matter of time before investors see an opportunity here.

Investment opportunity

Looking at the setup, I think CMC stock could be attractive. First, the company is well positioned to benefit from stock market volatility (which is increasing as a result of several factors).

When markets become volatile, investors and traders tend to make more trades. This translates into greater revenue for the company (which absorbs a portion of each transaction through the difference between the purchase and sale prices).

Second, the company has recently entered into several white label deals that could significantly boost growth. One of such transactions was concluded with an Australian bank Westpac (one of the four vast banks in Australia).

This is expected to significantly enhance the company’s user base. This should strengthen the company’s position as the second largest stockbroker in the country.

I would like to point out that I used the investment platform of this company in Australia and it is really good. Offering commission-free Australian share trading under $1,000 and zero US share trading fees, it’s highly profitable.

Third, the valuation looks attractive. Currently, the forward-looking price-to-earnings (P/E) ratio is just 11.6.

This multiple seems too low to me. In my opinion, there is definitely a possibility of revaluation at some stage.

Finally, the company is raising its dividend. In November, it increased its first-half payout by as much as 77% to 5.5 pence per share.

For the current financial year, analysts expect a payout of 14.7 pence per share. This means that the dividend yield will be approximately 4.5%.

Is it worth visiting?

Of course, there are risks here. One of them is competition.

Today, this area of ​​financial services is highly competitive. One rival worth keeping an eye on is Robinhood Markets (I just bought shares in this company) which is now very successful.

Another risk is regulation. In the future, regulators may decide to restrict higher risk products such as CFDs.

Overall, however, I see great potential. I think FTSE 250 stocks deserve further research.