Spread between the prices on IG and the underlying market when the underlying is open on the Aust 200 (XJO)

[WHLN17]

Can anyone explajn why there is a such a spread between the prices of the Aust 200 (XJO) and the underlying market when the underlying is open. Aren’t the two prices supposed to converge during the times when the underlying is trading? Today for example, there is a 20 point spread..

[Caseynotes]

5 hours ago, WHLN17 said:

Can anyone explajn why there is a such a spread between the prices of the Aust 200 (XJO) and the underlying market when the underlying is open. Aren’t the two prices supposed to converge during the times when the underlying is trading? Today for example, there is a 20 point spread..

Are you talking about the spread between buy and sell price of each market (the spread) or the difference of price of each market. If the latter then that's interesting but can you actually use it for anything? Is one constantly lagging and the other leading that would allow you to get in front of price change?

I've often watched the IG Dax and Index side by side and there was no pattern to take advantage of, they would randomly orbit closely around each other with usually just a couple of points difference, occasionally up to 10 but only lasting a second or 2 and very rarely 20 points for a fraction of a second when there was a sudden surge in volatility.