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Does IG aim to profit from client losses?

No. Our business model is based on providing individuals with the opportunity to trade the world’s financial markets, in exchange for fair and proportionate transaction fees. It's a well-known fact that trading successfully is difficult, and most speculative traders tend to lose. However, we do not typically benefit from trading losses that an unsuccessful client may experience.

Mostly, our clients offset each other’s positions. For example if client A buys one lot of the DAX and client B sells one lot of the DAX, both sides of the trade are covered. This means we're not exposed to the profit or loss of either client. Instead, we make our money via the spread (i.e. the transaction fee) that each client pays to trade.

Sometimes, a large majority of clients will trade in one direction. When this happens, we'll protect our exposure to risk by hedging in the underlying market. For example, if client A and client B both buy the DAX, we may buy actual DAX futures. This then covers the amount we'll pay out if both clients are successful.

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Yes. IG does trade against retail traders.

IG also has a lot of institutional traders. If your are trading low volume stock or Singapore CFD equities, the dealing desk will manually lock your order for a good 30 seconds so that you cannot delete nor change the order price level for the 30 seconds when they there is another bigger clients want to unload. 

I have been locked this way as many ast 4 times in the past and cost over SG$10,000 loss. When I called IG, it said the dealing desk manually lock my orders with an excuse they are putting my order on hold so that they hedge it on the Exchange. In the first place I trade CFD and CFD is internal market within IG environment and our trade does not affect the market. It is highly irresponsible to lock our order. My complaints to IG for compensation via calls and emails all went without any positive response and the replies from them are as stated above. CFD market is internal market and our order should not be touched by dealing desk at all time even if there is no liquidity to fill our order then our order should just be left unfilled. At no time our order should never be locked by Dealing desk. To me this is day light robbery.

Secondly, IG has deployed internal algorithm to hunt your hard stop losses and also filled in your limit order with a spike to the dot before immediately move in the opposite direction big time.

Thirdly, some time IG platform will freeze and unable to re-login back when you are in a trade. This made it extremely dangerous when we cannot see the price action on the chart. This had happened to me a few times.

Fourthly, nowadays even if your platform freeze or has other problem on your trade, call to their dealing desk during US market opens 100% of the time no support or dealing desk will pick your calls. My phone was kept ringing for 30mins or more and many different days. This is again does not speak well of the kind of support IG gave clients.

The only attraction I use IG is the ease of use of their trading platform.

These kind of  underhand tactics above are played out in IG on daily basis which made our day trading very difficult to win. It is very visible if your trade the small time frame how IG's manipulations are done.

 

 

The above comes from someone who trade daily with IG for the past 3 years. I am even considering to stop trading through IG because of the above under hand tactics. Sometimes 

 

 

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Hi traderx,

To this:

"Secondly, IG has deployed internal algorithm to hunt your hard stop losses and also filled in your limit order with a spike to the dot before immediately move in the opposite direction big time."

From time to time I had the similar experience that I didn't feel it was from genuine market behavior...

I am trading ASX 200 Index CFD on the daily basis. I am a retail trader since Jan 2021.

I had experienced from loss of many good opportunity from good gain, simply because in those occasions, once (within seconds) and right after I closed my positions after period of time of no movements in supporting my positions, then all of sudden it started to move in supporting the positions I just closed !!!

Similarly, in several occasions (mostly after 4pm AEST), even though I was very disciplined and followed the trend being supported and confirmed by 8-10 of different types of technical modeling analysis, once I entered position, the trend then turned against me (out of blue no idea) and ensured I locked into loss territory...

From the above experience, it didn't look like genuine marketplace movement behavior, though I always blame myself, of course 😞

But, after another thought and asking myself, the ASX 200 Index figure is by no-doubt well published (real-time or past figure), it is simply impossible to be manipulated the ASX 200 Index real-time figure in a silo environment.

So I don't think there is anything unethical for market price manipulation on IG platform.

However I just still can't explain why some times the market just all of sudden ran against me upon entering or existing trades...

One more thing on this:

"IG has deployed internal algorithm to hunt your hard stop loss"

I believe that the above is not IG's fault, it is the behavior of how the deal making works on exchange system. Because the exchange is just like a match-maker, which always picks orders within close ranges for match-making deals. So if your Stop-Loss is not set to be big enough, then you would become the best candidate for the match making, and of course you would be hunted down quicker by the exchange.

 

Cheers

Victor

 

 

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Guest Richardo

I am having the same doubt and questions if the IG market isn't manipulated since yesterday I saw a spike down of more 45 points on the Netherlands marker and a minute after that it spiked up again. 

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On 07/05/2021 at 22:04, pravid17 said:

Does IG aim to profit from client losses?

No. Our business model is based on providing individuals with the opportunity to trade the world’s financial markets, in exchange for fair and proportionate transaction fees. It's a well-known fact that trading successfully is difficult, and most speculative traders tend to lose. However, we do not typically benefit from trading losses that an unsuccessful client may experience.

Mostly, our clients offset each other’s positions. For example if client A buys one lot of the DAX and client B sells one lot of the DAX, both sides of the trade are covered. This means we're not exposed to the profit or loss of either client. Instead, we make our money via the spread (i.e. the transaction fee) that each client pays to trade.

Sometimes, a large majority of clients will trade in one direction. When this happens, we'll protect our exposure to risk by hedging in the underlying market. For example, if client A and client B both buy the DAX, we may buy actual DAX futures. This then covers the amount we'll pay out if both clients are successful.

 

On 07/05/2021 at 23:22, traderx said:

Yes. IG does trade against retail traders.

IG also has a lot of institutional traders. If your are trading low volume stock or Singapore CFD equities, the dealing desk will manually lock your order for a good 30 seconds so that you cannot delete nor change the order price level for the 30 seconds when they there is another bigger clients want to unload. 

I have been locked this way as many ast 4 times in the past and cost over SG$10,000 loss. When I called IG, it said the dealing desk manually lock my orders with an excuse they are putting my order on hold so that they hedge it on the Exchange. In the first place I trade CFD and CFD is internal market within IG environment and our trade does not affect the market. It is highly irresponsible to lock our order. My complaints to IG for compensation via calls and emails all went without any positive response and the replies from them are as stated above. CFD market is internal market and our order should not be touched by dealing desk at all time even if there is no liquidity to fill our order then our order should just be left unfilled. At no time our order should never be locked by Dealing desk. To me this is day light robbery.

Secondly, IG has deployed internal algorithm to hunt your hard stop losses and also filled in your limit order with a spike to the dot before immediately move in the opposite direction big time.

Thirdly, some time IG platform will freeze and unable to re-login back when you are in a trade. This made it extremely dangerous when we cannot see the price action on the chart. This had happened to me a few times.

Fourthly, nowadays even if your platform freeze or has other problem on your trade, call to their dealing desk during US market opens 100% of the time no support or dealing desk will pick your calls. My phone was kept ringing for 30mins or more and many different days. This is again does not speak well of the kind of support IG gave clients.

The only attraction I use IG is the ease of use of their trading platform.

These kind of  underhand tactics above are played out in IG on daily basis which made our day trading very difficult to win. It is very visible if your trade the small time frame how IG's manipulations are done.

 

 

The above comes from someone who trade daily with IG for the past 3 years. I am even considering to stop trading through IG because of the above under hand tactics. Sometimes 

 

 

 

On 11/05/2021 at 13:17, manafull said:

Hi traderx,

To this:

"Secondly, IG has deployed internal algorithm to hunt your hard stop losses and also filled in your limit order with a spike to the dot before immediately move in the opposite direction big time."

From time to time I had the similar experience that I didn't feel it was from genuine market behavior...

I am trading ASX 200 Index CFD on the daily basis. I am a retail trader since Jan 2021.

I had experienced from loss of many good opportunity from good gain, simply because in those occasions, once (within seconds) and right after I closed my positions after period of time of no movements in supporting my positions, then all of sudden it started to move in supporting the positions I just closed !!!

Similarly, in several occasions (mostly after 4pm AEST), even though I was very disciplined and followed the trend being supported and confirmed by 8-10 of different types of technical modeling analysis, once I entered position, the trend then turned against me (out of blue no idea) and ensured I locked into loss territory...

From the above experience, it didn't look like genuine marketplace movement behavior, though I always blame myself, of course 😞

But, after another thought and asking myself, the ASX 200 Index figure is by no-doubt well published (real-time or past figure), it is simply impossible to be manipulated the ASX 200 Index real-time figure in a silo environment.

So I don't think there is anything unethical for market price manipulation on IG platform.

However I just still can't explain why some times the market just all of sudden ran against me upon entering or existing trades...

One more thing on this:

"IG has deployed internal algorithm to hunt your hard stop loss"

I believe that the above is not IG's fault, it is the behavior of how the deal making works on exchange system. Because the exchange is just like a match-maker, which always picks orders within close ranges for match-making deals. So if your Stop-Loss is not set to be big enough, then you would become the best candidate for the match making, and of course you would be hunted down quicker by the exchange.

 

Cheers

Victor

 

 

 

On 12/05/2021 at 20:24, Guest Richardo said:

I am having the same doubt and questions if the IG market isn't manipulated since yesterday I saw a spike down of more 45 points on the Netherlands marker and a minute after that it spiked up again. 

Hey all, 

Unlike some other brokers IG do not trade against clients and don't benefit when our clients lose. We hedge the same way as the majority of our clients (so if 60% were long and 40% were short we would hedge those 20% long that aren't covered). 

We have no benefit when traders lose. We make money from spread and commission so if anything we want out traders to win so they will continue trading with us. 

Unfortunately I can't be account specific and if you believe something is wrong on your account please reach out to us as I can't assist with this. 

If you have any questions on this please let me know by quoting my response. 

All the best, 

Charlotte 

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  • 2 weeks later...

I'd like to add I am trading turbos24 on the trading platform. When I close my position I see clearly let's say 20€ profit but when I check the account history it's less some times half of what the profit loss showed on the chart. IG is cheating even the profit/loss. 

They are clearly manipulating. I recorded some videos and I will post them so people can see. IG is cheating they don't allow traders to see entry price level on the chart as it happens with CFDs,  IG forces traders calculate the profit/loss in the account history manually on purpose so it's more difficult for the trader to keep track of the true profit. 

What amazes me is how blatantly they do it.

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1 hour ago, jt_1 said:

I'd like to add I am trading turbos24 on the trading platform. When I close my position I see clearly let's say 20€ profit but when I check the account history it's less some times half of what the profit loss showed on the chart. IG is cheating even the profit/loss. 

They are clearly manipulating. I recorded some videos and I will post them so people can see. IG is cheating they don't allow traders to see entry price level on the chart as it happens with CFDs,  IG forces traders calculate the profit/loss in the account history manually on purpose so it's more difficult for the trader to keep track of the true profit. 

What amazes me is how blatantly they do it.

i'll give you a hint

https://community.ig.com/forums/topic/11115-extremely-baffled-on-currency-conversion-fee/

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  • 2 weeks later...
On 29/05/2021 at 21:14, jt_1 said:

I'd like to add I am trading turbos24 on the trading platform. When I close my position I see clearly let's say 20€ profit but when I check the account history it's less some times half of what the profit loss showed on the chart. IG is cheating even the profit/loss. 

They are clearly manipulating. I recorded some videos and I will post them so people can see. IG is cheating they don't allow traders to see entry price level on the chart as it happens with CFDs,  IG forces traders calculate the profit/loss in the account history manually on purpose so it's more difficult for the trader to keep track of the true profit. 

What amazes me is how blatantly they do it.

This is completely untrue. I've been trading with IG for over a year as a top trader here on the platform and I have no issues. You can see your profit/loss and a chart from day one. The only thing you won't see on the platform while you trade a specific trade is the commissions and cost of borrowing, but those are quite easy to calculate yourself.

For example, if you buy 1000 shares of AAPL at 100 and sell at 120 you need to account for $20 each way of commissions and the cost of borrowing before being able to calculate your profit. Those are separate fees, if you trade pennies of course you will end up with a loss because of the fee even if you closed the trade green on the platform. This is normal and I like it better than having your average cost moving up every single day ! 

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  • 2 weeks later...

If you signup with a broker who is a market maker/dealing desk you should expect the broker to act as a counterparty to your trades (which has positives and negatives). You could search for an ECN, non dealing desk (NDD), or STP broker-dealer who just passes your trades to a liquidity provider without taking the other side of your trade.

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Hi RFSmithers,

Thanks for the tips... But when I searched for trusted "ECN" broker in Australia for CFD Index trading, IG Market is among the returned result!

So with what you suggested and what the search result I got, IG Market seems to be still the one to stick with for CFD Index trading.

Please note that, regarding the market trend is to be against your trade or not, from my experience so far, I think it is really up to you on when to enter the trade, for example:

- if you enter the trade at the time when the market is flat with no trend, then it is just like you jump into the calm water and then you make the big splash which could be against yourself

- if you enter the trade at the time when the market is on trending, where: if you enter against the trend, then you will be eaten alive from there - FULL STOP - Period; however if you enter on riding the trend, then you will be picking up the fruits along the way through...

 

So with the above, to summarise, it seems to me that (of course - correct me if wrong):

1) IG Market is still the trusted ECN broker in Australia for CFD Index trading

2) A trader needs to know when to enter the trade to ensure s/he to ride on the trend to pick fruits, but not to be eaten alive.

 

Cheers

Victor

 

 

 

 

 

What do you think?

Cheers.

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  • 2 weeks later...
On 17/06/2021 at 10:59, manafull said:

Hi RFSmithers,

Thanks for the tips... But when I searched for trusted "ECN" broker in Australia for CFD Index trading, IG Market is among the returned result!

So with what you suggested and what the search result I got, IG Market seems to be still the one to stick with for CFD Index trading.

Please note that, regarding the market trend is to be against your trade or not, from my experience so far, I think it is really up to you on when to enter the trade, for example:

- if you enter the trade at the time when the market is flat with no trend, then it is just like you jump into the calm water and then you make the big splash which could be against yourself

- if you enter the trade at the time when the market is on trending, where: if you enter against the trend, then you will be eaten alive from there - FULL STOP - Period; however if you enter on riding the trend, then you will be picking up the fruits along the way through...

 

So with the above, to summarise, it seems to me that (of course - correct me if wrong):

1) IG Market is still the trusted ECN broker in Australia for CFD Index trading

2) A trader needs to know when to enter the trade to ensure s/he to ride on the trend to pick fruits, but not to be eaten alive.

 

Cheers

Victor

 

 

 

 

 

What do you think?

Cheers.

No, IG has "in-house" market, on which they have concentrated all their advertisement and support. So, if you are trading the normal app/web platform, you are a victim of their profiteering.

 

However, they also nominally have a L2 Dealer, which is supposed to be direct market access. I have been trying to trade using their L2 Dealer for over 6 months, but haven't been successful. Why? Because their installation package is out of date and not working, their support team is clueless (directed by management of course), and there is literally zero visibility of that platform or the possibility of using it. Still, it satisfied the requirement for it to be listed as a direct market access platform!! And they lure customers in...

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On 26/06/2021 at 02:00, gxcbv said:

No, IG has "in-house" market, on which they have concentrated all their advertisement and support. So, if you are trading the normal app/web platform, you are a victim of their profiteering.

 

However, they also nominally have a L2 Dealer, which is supposed to be direct market access. I have been trying to trade using their L2 Dealer for over 6 months, but haven't been successful. Why? Because their installation package is out of date and not working, their support team is clueless (directed by management of course), and there is literally zero visibility of that platform or the possibility of using it. Still, it satisfied the requirement for it to be listed as a direct market access platform!! And they lure customers in...

Hi @gxcbv @manafull,

In the CFD industry there are brokers who don't hedge client's exposure and brokers (like ourselves) who hedge client's exposure. 

In a perfect world the exposure of short clients would net off the trades of long clients however this is not always the case. Our hedging model allows us to take an exposure in the underlying market for the remaining exposure which doesn't offset - This way we don't need to hedge every trade, worry about profits of our clients and results in lower costs for hedging in the underlying market (commissions, interest etc.).

We make our money primarily through our spreads and overnight funding  with other fees making up a small proportion of our revenue.

I would like to remind also that IG is regulated by several bodies globally, including top-tier regulators like the UK's FCA, Germany's BaFIN, Australia's ASIC - This should be quite reassuring from a dealing execution and transparency perspective. 

Empowering our retail clients has become part of our journey and a common goal - We are doing our best to provide our retail clients with innovative products/platforms, webinars, news and the acquisition of TastyTrade 🍒(which is now finalized) has been done in line with this purpose. 

In regards to L2 dealer, it is a platform designed for our own traders, so it's for people comfortable with increased complexity of DMA shares trading. All the info is available on our dedicated page.

If you have encountered any technical issue during the installation/launching process please let us know @ chartsupport@marketdatasystems.com and our dedicated TS - IT team will be more than happy to assist you with that.

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Posted (edited)

Hi @gxcbv @Administrator,

Thank you for your comments.

Now, I have the simple question that is perhaps of the most core interest for every retail traders like me, if you can pin point and clarify (assuming "L2 trader" is the same as "Pro Level 2" Trader that a Retail Trader (i.e. L1) can apply on IG):

This question is regarding the CFD trading (i.e. ASX 200 Index CFD trading), in terms of placing a "Deal" at real time between Pro L2 Trader and a Retail Trader and using IG platform:

For a Real time Deal:

1) Will the ASX 200 Index displayed in the Deal be as the same Real Time ASX 200 Index, for both L2 Trader and Retail Trader?

2) Will the ASX 200 Index be manipulated by IG platform against the Retail Traders, Before and After they placed the Deal?

 

If the answer to 1) is "Yes, it is the Same Real Time ASX 200 Index for both L2 and Retail Traders when placing the Deal" AND 2) is "No, IG platform can not manipulated the ASX 200 Index against the Retail Traders before and after they place the Deal", Then it makes all common sense as it shows the solid foundation of fairness (no discrimination) for placing a Deal whether you are a L2 Trader or Retail Trader on IG.

 

At this stage I have been a Retail Trader on IG since Jan this year, though I am planning to apply for the Professional Level 2 Trader next year, I don't think IG is able to, or allowed by the regulation to manipulate the ASX 200 Index in Real Time to disadvantage clients before or after they place a Deal (at real time).

 

Thanks.

 

Edited by manafull
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On 08/07/2021 at 02:22, manafull said:

Hi @gxcbv @Administrator,

Thank you for your comments.

Now, I have the simple question that is perhaps of the most core interest for every retail traders like me, if you can pin point and clarify (assuming "L2 trader" is the same as "Pro Level 2" Trader that a Retail Trader (i.e. L1) can apply on IG):

This question is regarding the CFD trading (i.e. ASX 200 Index CFD trading), in terms of placing a "Deal" at real time between Pro L2 Trader and a Retail Trader and using IG platform:

For a Real time Deal:

1) Will the ASX 200 Index displayed in the Deal be as the same Real Time ASX 200 Index, for both L2 Trader and Retail Trader?

2) Will the ASX 200 Index be manipulated by IG platform against the Retail Traders, Before and After they placed the Deal?

 

If the answer to 1) is "Yes, it is the Same Real Time ASX 200 Index for both L2 and Retail Traders when placing the Deal" AND 2) is "No, IG platform can not manipulated the ASX 200 Index against the Retail Traders before and after they place the Deal", Then it makes all common sense as it shows the solid foundation of fairness (no discrimination) for placing a Deal whether you are a L2 Trader or Retail Trader on IG.

 

At this stage I have been a Retail Trader on IG since Jan this year, though I am planning to apply for the Professional Level 2 Trader next year, I don't think IG is able to, or allowed by the regulation to manipulate the ASX 200 Index in Real Time to disadvantage clients before or after they place a Deal (at real time).

 

Thanks.

 

Hi @manafull

I see that there is some confusion around trading on L2 and our web platform. 

The main difference between L2 and our web platform is that on L2 you can trade shares using DMA (only shares!).

Quote

1) Will the ASX 200 Index displayed in the Deal be as the same Real Time ASX 200 Index, for both L2 Trader and Retail Trader?

A professional/retail/L2/MT4/PRT trader will always trade on the same ASX 200 cash index price.

Quote

 

2) Will the ASX 200 Index be manipulated by IG platform against the Retail Traders, Before and After they placed the Deal?


 

I'm not sure what does this question mean. 

On indices we offer Future contracts and Cash contracts. The price data feed of a future contract is coming directly from the exchange and we just adjust it for the spread (that's how we make money!). On future contracts you don't pay any overnight funding as the spread is wider.

The price of an index cash contract is calculated by taking the price of the Index future contract and adjusting it by the Fair Value. The Fair Value is taken from Bloomberg and it's updated constantly throughout the day. In a nutshell it consists in readding the dividends and subtructing the interest to the price of a future contract. 

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Hi @Administrator,

Thank you for your reply.

There are two points I wanted to bring up here:

Firstly:

With what you said "The main difference between L2 and our web platform is that on L2 you can trade shares using DMA (only shares!). " - my question:

Does it mean there is no DMA for ASX 200 Index trading for Pro L2 traders?

With my further observation/experience being a retail trader below, would you please clarify the major difference between Retail and Pro L2 Trades, ONLY for trading ASX 200 Index, if DMA is not applicable to both as you mention?

Please also note that, being only a retain trader on IG, my current experience  told me that there have been **immediate  reaction** from the market against the deal I placed (i.e. the market immediately moves to the opposite direction right after I placed the deal), despite the fact that all my indicator modellings agree and supporting the trend of the deal I placed (short term windows).

But if I did not place the deal, then the market would continue towards the trend that my indicator modellings agree and suggest.

And in order to get over the above situation, I have to force myself not to trade as per short-term windows suggested, but all short and long term windows must agree. However, by doing this I am actually restricted myself to maybe 1x or maximum 2x trades a day, in order to avoid being attacked by the market sudden trend reversal immediately after I place the deal for ASX 200 Index trading.

I think, the degree of market reaction against me right after I place the deal on IG, may become the tricky point of difference of being between the Retail Trader (L1), Or Pro L2 Trader (L2) on IG.

I suspect that, in summary: the Retail Trader (as proven by my current experience) may be **more vulnerable to suffer from immediate adverse Market reaction (right after placing a deal)"  than Pro L2 Trader, during the ASX 200 Index trading. (At least, the fact that I observed from being a retail trader, demonstrated this vulnerability)

I speculate that the cause of such difference of vulnerability to market reaction between L1 and L2 traders, is likely to be from the level of access to the market, where L2 traders could place the deal with the group of deals that has less impact to the market index movement during the match making process, where L1 traders have no choice but can only place the deal with the group (i.e. the IG group) that can bring impact to the market index movement during the match making process.

 

I think the L2 traders should be more experienced and should know how to select and place the deal directly in the market (i.e. outside of IG deal group if necessary) that has minimum impact to the market index movement, in order to avoid the immediate adverse reaction...

 

Secondly - I think what you said below Re.: overnight funding fee is nil for ASX 200 Index trading, is incorrect:

>> On indices we offer Future contracts and Cash contracts. The price data feed of a future contract is coming directly from the exchange and we just adjust it for the spread (that's how we make money!). On future contracts you don't pay any overnight funding as the spread is wider.

 

As I have been trading ASX 200 Index in all different sessions throughout the day, when my trading slips past from the day session into the night session, I will have to pay overnight funding fee and more to pay to cover the whole weekend overnight funding fees, if my trading session slips past Friday cut-off time.

 

Thanks

 

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4 hours ago, manafull said:

Hi @Administrator,

Thank you for your reply.

There are two points I wanted to bring up here:

Firstly:

With what you said "The main difference between L2 and our web platform is that on L2 you can trade shares using DMA (only shares!). " - my question:

Does it mean there is no DMA for ASX 200 Index trading for Pro L2 traders?

With my further observation/experience being a retail trader below, would you please clarify the major difference between Retail and Pro L2 Trades, ONLY for trading ASX 200 Index, if DMA is not applicable to both as you mention?

Please also note that, being only a retain trader on IG, my current experience  told me that there have been **immediate  reaction** from the market against the deal I placed (i.e. the market immediately moves to the opposite direction right after I placed the deal), despite the fact that all my indicator modellings agree and supporting the trend of the deal I placed (short term windows).

But if I did not place the deal, then the market would continue towards the trend that my indicator modellings agree and suggest.

And in order to get over the above situation, I have to force myself not to trade as per short-term windows suggested, but all short and long term windows must agree. However, by doing this I am actually restricted myself to maybe 1x or maximum 2x trades a day, in order to avoid being attacked by the market sudden trend reversal immediately after I place the deal for ASX 200 Index trading.

I think, the degree of market reaction against me right after I place the deal on IG, may become the tricky point of difference of being between the Retail Trader (L1), Or Pro L2 Trader (L2) on IG.

I suspect that, in summary: the Retail Trader (as proven by my current experience) may be **more vulnerable to suffer from immediate adverse Market reaction (right after placing a deal)"  than Pro L2 Trader, during the ASX 200 Index trading. (At least, the fact that I observed from being a retail trader, demonstrated this vulnerability)

I speculate that the cause of such difference of vulnerability to market reaction between L1 and L2 traders, is likely to be from the level of access to the market, where L2 traders could place the deal with the group of deals that has less impact to the market index movement during the match making process, where L1 traders have no choice but can only place the deal with the group (i.e. the IG group) that can bring impact to the market index movement during the match making process.

 

I think the L2 traders should be more experienced and should know how to select and place the deal directly in the market (i.e. outside of IG deal group if necessary) that has minimum impact to the market index movement, in order to avoid the immediate adverse reaction...

 

Secondly - I think what you said below Re.: overnight funding fee is nil for ASX 200 Index trading, is incorrect:

>> On indices we offer Future contracts and Cash contracts. The price data feed of a future contract is coming directly from the exchange and we just adjust it for the spread (that's how we make money!). On future contracts you don't pay any overnight funding as the spread is wider.

 

As I have been trading ASX 200 Index in all different sessions throughout the day, when my trading slips past from the day session into the night session, I will have to pay overnight funding fee and more to pay to cover the whole weekend overnight funding fees, if my trading session slips past Friday cut-off time.

 

Thanks

 

Hi, if you tag the person you are replying to they will get a notification they have been mentioned in a post as in @JakubIG.

The admin account you tagged is an old dead client handle, IG staff always have IG at the end.

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Thank you @Caseynotes for suggestion.

As I am unable to edit my last post, I am re-posting my last questions/comments here below:

Hi @JakubIG,

Thank you for your reply.

There are two points I wanted to bring up here:

Firstly:

With what you said "The main difference between L2 and our web platform is that on L2 you can trade shares using DMA (only shares!). " - my question:

Does it mean there is no DMA for ASX 200 Index trading for Pro L2 traders?

With my further observation/experience being a retail trader below, would you please clarify the major difference between Retail and Pro L2 Trades, ONLY for trading ASX 200 Index, if DMA is not applicable to both as you mention?

Please also note that, being only a retain trader on IG, my current experience  told me that there have been **immediate  reaction** from the market against the deal I placed (i.e. the market immediately moves to the opposite direction right after I placed the deal), despite the fact that all my indicator modellings agree and supporting the trend of the deal I placed (short term windows).

But if I did not place the deal, then the market would continue towards the trend that my indicator modellings agree and suggest.

And in order to get over the above situation, I have to force myself not to trade as per short-term windows suggested, but all short and long term windows must agree. However, by doing this I am actually restricted myself to maybe 1x or maximum 2x trades a day, in order to avoid being attacked by the market sudden trend reversal immediately after I place the deal for ASX 200 Index trading.

I think, the degree of market reaction against me right after I place the deal on IG, may become the tricky point of difference of being between the Retail Trader (L1), Or Pro L2 Trader (L2) on IG.

I suspect that, in summary: the Retail Trader (as proven by my current experience) may be **more vulnerable to suffer from immediate adverse Market reaction (right after placing a deal)"  than Pro L2 Trader, during the ASX 200 Index trading. (At least, the fact that I observed from being a retail trader, demonstrated this vulnerability)

I speculate that the cause of such difference of vulnerability to market reaction between L1 and L2 traders, is likely to be from the level of access to the market, where L2 traders could place the deal with the group of deals that has less impact to the market index movement during the match making process, where L1 traders have no choice but can only place the deal with the group (i.e. the IG group) that can bring impact to the market index movement during the match making process.

 

I think the L2 traders should be more experienced and should know how to select and place the deal directly in the market (i.e. outside of IG deal group if necessary) that has minimum impact to the market index movement, in order to avoid the immediate adverse reaction...

 

Secondly - I think what you said below Re.: overnight funding fee is nil for ASX 200 Index trading, is incorrect:

>> On indices we offer Future contracts and Cash contracts. The price data feed of a future contract is coming directly from the exchange and we just adjust it for the spread (that's how we make money!). On future contracts you don't pay any overnight funding as the spread is wider.

 

As I have been trading ASX 200 Index in all different sessions throughout the day, when my trading slips past from the day session into the night session, I will have to pay overnight funding fee and more to pay to cover the whole weekend overnight funding fees, if my trading session slips past Friday cut-off time.

 

Thanks

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There is a big confusion here. 

@manafull you are an AU trader and someone from the UK mentioned the L2 platform on this post.

The L2 Pro level is a client status in Australia, L2 dealer is a platform we offer to experienced traders who want to trade SHARES DMA (only shares).

Professional Australian clients can't trade the ASX200 Index value directly in the market (this benchmark is not even trading in the underlying market, the futures contracts on it are!). All the clients are trading the same instrument over the counter. 

As you can see, we offer 2 type of contracts, CASH and FUTURES.

FUTURES: The price of the Futures are coming directly from the exchanges and we just adjust it by making the Spread wider (this is how me make money at the end of the day!). You never pay overnight funding on Futures.

CASH: The Cash contract price is the Futures price adjusted by the Fair Value  which is taken directly from Bloomberg and updated throughout the day. It consists simply in readding the dividends and substracting the interest to the price of Futures. 

You mentioned that you are paying the overnight funding, it means that you are trading the cash contract which doesn't have an expiry date.

The reason why traders prefer the Cash contract over Futures is because spread is smaller and it doesn't have an expiry date. 

image.png

 

I hope this helps. If you are still unsure about this maybe consider calling our Dealing Desk in Australia and they will explain this to you over the phone.

@Caseynotes thanks for tagging me! I couldn't see this post 

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Hi @JakubIG

Thank you for your reply.

This is indeed the land of confusion...

When you mention the following for ASX 200 Future and ASX 200 Cash:

Quote

FUTURES: The price of the Futures are coming directly from the exchanges and we just adjust it by making the Spread wider (this is how me make money at the end of the day!). You never pay overnight funding on Futures.

CASH: The Cash contract price is the Futures price adjusted by the Fair Value  which is taken directly from Bloomberg and updated throughout the day. It consists simply in readding the dividends and substracting the interest to the price of Futures.

The above gives me the impression that the FUTURES is direct / as same as the ASX 200 Index currently displayed from the Exchange, where the CASH is a derived figure from the Future.

 

So if my above impression is correct, then please read on:

When you go to IG client home page, you will see the following "Australia 200" Index live, i.e. like below:

image.thumb.png.feba3ca453af5f0752f0cadd6116a010.png

And also from my IG "ASX 200 Cash" on the Deal (real time) trading dashboard, it shows the same as above "ASX 200" index displayed on the IG client home page:

image.png.7130e4825faa901cd26d1c68e7b56326.png 

 

However, on the "ASX 200 Future" trading dashboard section (below), it shows the following (sorry I am unable to copy paste quickly enough right after the other copy-paste so the figures below may be slightly different from the real figure):

image.png.79c1602d94691bc2dc233232aba4bb25.png

 

Now the question:

From the above, does it mean that: When "ASX 200 Index" or "ASX 200" is commonly mentioned by IG (as above on client home page), or commonly mentioned in financial news update by wider media channels and communities, is it the same as "ASX 200 Cash" ?

 

If the above is correct i.e. if "ASX 200 CASH" is indeed the same as "ASX 200 Index" that people normally talk about on the daily basis, then Why the "ASX 200 CASH" or "ASX 200 Index"  is NOT directly from ASX Exchange, but rather a derived figure from the Future that you said "are coming directly from the exchanges ", where the Cash is only derived from the Future ?

 

So please clarify.

 

Cheers

 

 

image.png

image.png

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Edited by manafull
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@manafull We are talking about 3 different things: ASX200 Cash contract (IG), ASX200 Futures (IG), ASX200 Index. 

ASX200 Index: This is the value you normally hear in the news, radio, TV. It is not a tradable asset, it doesn't trade in the underlying market. It is just a representation/value/benchmark designed to measure the performance of the 200 largest Australian stocks. 

image.png

ASX 200 Futures: The ASX200 Futures contract is the benchmark equity index futures contract in Australia, based on the ASX200 Index. It is a tradable asset in the underlying market, a future contract with different expiry dates. The price you see on IG platform, is taken directly from the Exchange and we wide the spread.

This screenshot is taken from Bloomberg:

image.png

 

ASX 200 Cash contract: This is the price shown on your screenshots. We derive the 'cash' price from a tradeable future by adjusting it for the "Fair value". It doesn't have an expiry date and the spread are significantly lower than a Futures contract.

The Cash contract is mainly used by short-term traders as the spreads are lower. On Germany 30 i.e. the spread on a Cash contract is 1.2 points vs 6 points on Futures contract. 

This is our Indices business model and it allows us to hedge in the underlying market with Index Futures contracts.

Once again the Index value you hear in the news doesn't trade in the underlying market.

If you try to compare that value with what you see on the IG platform than of course you will notice a small difference. The trend and the % is usually the same between the Futures contract and Index value. 

I hope this helps.

Jakub

 

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Hi @JakubIG,

Thank you for further explanation. I am sorry I could not make my question clearer during typing my post...

In my last post as I pointed out that, in summary, I observed that the following figures that being displayed, and they are always true as everyone can check anytime:

ASX 200 Cash (IG trading dashboard)  SAME value as  ASX 200 (Index value on IG Client Home Page)

ASX 200 Future (IG trading dashboard)  NOT as  ASX 200 (Index value on IG Client Home Page)

ASX 200 Future (IG trading dashboard)  NOT as  ASX 200 Cash (IG trading dashboard)

But in your reply below, you indicated something that is not what I observed from above:

ASX 200 Future (IG trading dashboard) usually the same as ASX 200 (Index value on IG Client Home Page)

11 hours ago, JakubIG said:

If you try to compare that value with what you see on the IG platform than of course you will notice a small difference. The trend and the % is usually the same between the Futures contract and Index value

 

So please clarify.

 

Thanks.

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Hi @JakubIG,

Let's say that if the ASX 200 (Index value on IG Client Home Page) is actually the "ASX 200 Cash" but NOT the "ASX 200 Index value", which you earlier pointed out not tradable, then please:

Ignore my above posts, but can you please answer my question below instead:

Where can the general public go and find out the "ASX 200 Index value" in REAL TIME? If not in REAL TIME, what is the limitation of its availability and when/where it is available to check?

 

Thanks

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3 hours ago, manafull said:

Hi @JakubIG,

Let's say that if the ASX 200 (Index value on IG Client Home Page) is actually the "ASX 200 Cash" but NOT the "ASX 200 Index value", which you earlier pointed out not tradable, then please:

Ignore my above posts, but can you please answer my question below instead:

Where can the general public go and find out the "ASX 200 Index value" in REAL TIME? If not in REAL TIME, what is the limitation of its availability and when/where it is available to check?

 

Thanks

just to help try and clarify, the prices on the IG welcome page are IG's cash prices so is same in the 2 side by side pics.

The cash and the futures are 2 separate markets, cash is designed for short duration hold and the futures for longer term and so both have different spreads and therefore different prices.

The ASX exchange price (the underlying market IG derives it's futures price on) can be found on the ASX exchange web site but remember you can't trade directly on the exchange, you need to go through a broker who will add their spread so the prices between the exchange and the broker will be different.

hope this helps.

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