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IG price differential with XJO cash index


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Hello,

Could some please explain the difference in price between IG's price for ASX200 CASH and the price I am getting off both the ASX website and my eSignal.

IG has a price premium of around 18 points.

eg. as I type my eSignal shows 5970; the ASX website is lagging a bit but is close to this price.

IG 5987.8/88.8. 

I know June futures expired yesterday, but I'm scratching my head why IG's cash index should not be mirroring the actual price.

 

 

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4 hours ago, AlphaGamma said:

Hello,

Could some please explain the difference in price between IG's price for ASX200 CASH and the price I am getting off both the ASX website and my eSignal.

IG has a price premium of around 18 points.

eg. as I type my eSignal shows 5970; the ASX website is lagging a bit but is close to this price.

IG 5987.8/88.8. 

I know June futures expired yesterday, but I'm scratching my head why IG's cash index should not be mirroring the actual price.

 

 

 

4 hours ago, Nieco said:

HI
I am having the same issues and I have lost a lot of money.
Hope we can get an answer from them directly.
Feels like we are getting slight ly scammed

Brokers don't offer exchange prices and don't try to offer mirrored prices they aim to track exchange prices and offer what is available to them from their liquidity providers. If you want to trade on the exchange you need to put up x million dollars and provide business references to apply, you could trade though a DMA platform but even then you are paying the broker's spread.

Brokers prices don't 'lag' the exchange, sometimes they are better but what does that mean in a 2 way market? I've spent odd days watching live prices between broker and exchange and there is no consistency in any lag, they look like they are orbiting each other as they move upward or downward, if that wasn't the case and there was a constancy of difference you could profit from arbitrage. 

Edited by Caseynotes
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On 19/06/2020 at 06:45, Caseynotes said:

If you want to trade on the exchange you need to put up x million dollars and provide business references to apply, you could trade though a DMA platform but even then you are paying the broker's spread.

This is total BS, no offence.

To trade futures you can start with as little as 500USD. When you are opening a futures trade account you are asked about your wealth and trading experience because of the leverage, based on that they can refuse to open an account with you because are deemed risky.  Absolutely no business references because you open as an individual.

When you are trading on the exchange you are trading "DMA" by nature and you dont pay any "broker spreads" instead you pay commissions. You would only pay the spread between the bid and ask if you buy or sell at market. The spread is usually the minimum tick price for that security to move, on the ES is 0.25.

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32 minutes ago, ItsAlex said:

This is total BS, no offence.

To trade futures you can start with as little as 500USD. When you are opening a futures trade account you are asked about your wealth and trading experience because of the leverage, based on that they can refuse to open an account with you because are deemed risky.  Absolutely no business references because you open as an individual.

When you are trading on the exchange you are trading "DMA" by nature and you dont pay any "broker spreads" instead you pay commissions. You would only pay the spread between the bid and ask if you buy or sell at market. The spread is usually the minimum tick price for that security to move, on the ES is 0.25.

no you have misunderstood the point I was making. IG trades on the exchange, we all trade through a broker. We don't trade directly on the exchange or trade the exchange's quoted prices. That was the point I was making in reply to the OP's question. I was not talking about opening an account with a broker, to trade on the actual exchange needs the backing of millions for example a seat on the NYSE changes hands for around 5 million if memory serves.

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On 19/06/2020 at 15:45, Caseynotes said:

You are speaking as an FX person, where the liquidity is fragmented and there is no central exchange. 

Talking semantics when you say they don't offer mirror prices, but aim to track exchange prices. ASX200 price is just the weighted components of the 200 stocks that have defined exchange prices. It is not an index with no underlying basis. Futures prices ebb and flow between premium and discount to cash; but not sure why IG's XJO should do the same with the actual price...we're talking about 15 points currently, which is not insignificant.

 

>

>

Brokers don't offer exchange prices and don't try to offer mirrored prices they aim to track exchange prices and offer what is available to them from their liquidity providers.

Brokers don't offer exchange prices and don't try to offer mirrored prices they aim to track exchange prices and offer what is available to them from their liquidity providers. If you want to trade on the exchange you need to put up x million dollars and provide business references to apply, you could trade though a DMA platform but even then you are paying the broker's spread.

Brokers prices don't 'lag' the exchange, sometimes they are better but what does that mean in a 2 way market? I've spent odd days watching live prices between broker and exchange and there is no consistency in any lag, they look like they are orbiting each other as they move upward or downward, if that wasn't the case and there was a constancy of difference you could profit from arbitrage. 

 

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This just happen to me today

using trading side by side my order got hit at 3040 at IG and then rebounded

However on tradingview the price never went down below 3060. Thats 20 points difference. It literraly hunted my order then bounces back, now it is following close to the order price at trading view.

Is this reportable?
1 to 2 points sure, but 20 points??? just to hunt my sell order?
How?

Screen Shot 2020-06-22 at 11.19.35 am.png

Screen Shot 2020-06-22 at 11.18.14 am.png

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3 hours ago, Nieco said:

This just happen to me today

using trading side by side my order got hit at 3040 at IG and then rebounded

However on tradingview the price never went down below 3060. Thats 20 points difference. It literraly hunted my order then bounces back, now it is following close to the order price at trading view.

Is this reportable?
1 to 2 points sure, but 20 points??? just to hunt my sell order?
How?

 

4 hours ago, AlphaGamma said:

Talking semantics when you say they don't offer mirror prices, but aim to track exchange prices

The prices listed on the exchange are the best bid/offer of those trading on the exchange. Many times I've had the exchange panel up next to the brokers panel for days at a time, as as I've said in other threads the prices orbit each other, they don't mirror or lead or lag, often they separate by 5 points for a few seconds before coming back together, less frequently by 10 points and yes occasionally by 20 but seldom and it only lasts for a second or two. In a 2 way market this temporarily advantages one side or the other but not the broker.

Brokers provide prices to their clients, if you want to compare prices you should look at prices you can actually get and that's from another broker not the exchange. If you find another broker that you think is better then the solution is obvious.

 

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2 hours ago, Caseynotes said:

 

The prices listed on the exchange are the best bid/offer of those trading on the exchange. Many times I've had the exchange panel up next to the brokers panel for days at a time, as as I've said in other threads the prices orbit each other, they don't mirror or lead or lag, often they separate by 5 points for a few seconds before coming back together, less frequently by 10 points and yes occasionally by 20 but seldom and it only lasts for a second or two. In a 2 way market this temporarily advantages one side or the other but not the broker.

Brokers provide prices to their clients, if you want to compare prices you should look at prices you can actually get and that's from another broker not the exchange. If you find another broker that you think is better then the solution is obvious.

 

But it feels like if I didnt have a sell order there it wont even chase that sell order, isnt that somewhat cheating 

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2 minutes ago, Nieco said:

But it feels like if I didnt have a sell order there it wont even chase that sell order, isnt that somewhat cheating 

but IG has over 100,000 clients, they've not singled you out and are studying your stop positions but someone else might be. I've not looked at your charts but to describe a classic short squeeze. If a big player wants a lot of buy contracts around a certain low a good way to get them without constantly bidding the market up is to first force price down to trigger stops below the low and then start buying them up, sure they lose a bit forcing price down but with all those contracts back on the market and now in their possession the gains from a big move up will more than compensate the initial loss.

So yes there are stop hunters out there but it's not likely to be your broker.

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6 hours ago, Nieco said:

This just happen to me today

using trading side by side my order got hit at 3040 at IG and then rebounded

However on tradingview the price never went down below 3060. Thats 20 points difference. It literraly hunted my order then bounces back, now it is following close to the order price at trading view.

Is this reportable?
1 to 2 points sure, but 20 points??? just to hunt my sell order?
How?

Screen Shot 2020-06-22 at 11.19.35 am.png

Screen Shot 2020-06-22 at 11.18.14 am.png

Well you made me take a look and thats was a waste of my time

https://www.barchart.com/futures/quotes/ESU20/interactive-chart

SP500 sept2.png

  • Great! 1
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The problem as a trader, is your levels and stops are based on actual real prices from the exchange. To the degree that IG's Australia 200 cash reflects the same levels within a few points, everything is fine.  Where they differ significantly, makes any levels for entry, stops, TP and  chart retracement levels pointless.

IG's Australia 200 cash differs from the actual index now by 18-19 points currently.

It appears to me that IG is pricing the cash index off some fair value calculation, but on this I am not certain.

Edited by AlphaGamma
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1 hour ago, AlphaGamma said:

It appears to me that IG is pricing the cash index off some fair value calculation, but on this I am not certain.

not really, we are called retail traders for a reason, we are involved in the retail market and not the wholesale market because we're too small to participate, we're reliant on brokers to trade through (not with). Brokers give us access to markets we would not normally be able to trade on but we can only trade the prices that the broker can offer. The broker is dependent on prices from their liquidity providers, the broker may aim to 'track' an underlying market but are limited to what is actually available, sometime a broker will stop a market (their market) simply because they are not able to quote reasonable prices. 

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24 minutes ago, Caseynotes said:

 The broker is dependent on prices from their liquidity providers,

You keep mentioning liquidity providers...this is FX speak......  IG don't make a market in a cash stock index based on liquidity providers....IF they want to hedge or reduce exposure they will use equity futures.

Edited by AlphaGamma
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8 minutes ago, AlphaGamma said:

 

You keep mentioning liquidity providers...this is FX speak......  IG don't make a market in a cash stock index based on liquidity providers....IF they want to hedge or reduce exposure they will use equity futures.

to keep markets running 24/5 the broker needs liquidity providers for all markets not just FX, the broker is not necessarily market making at all and they can hedge any way they want. 

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