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How Order is filled when trading CFD on IG


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Hi Guys, I have a doubt, when trading equities/options/futures, if a trader places a buy or sell order to a broker, it goes to an exchange and if someone is ready to buy or sell at the that price order gets matched and the order is filled.

What happens when we are trading only CFD, are we trading against the broker, our order is filled by the broker (IG), meaning if I am buying some equity CFD so IG is selling that CFD? If that is the case, can the price be manipulated to kick out the trader ?   

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3 hours ago, Talwar said:

Hi Guys, I have a doubt, when trading equities/options/futures, if a trader places a buy or sell order to a broker, it goes to an exchange and if someone is ready to buy or sell at the that price order gets matched and the order is filled.

What happens when we are trading only CFD, are we trading against the broker, our order is filled by the broker (IG), meaning if I am buying some equity CFD so IG is selling that CFD? If that is the case, can the price be manipulated to kick out the trader ?   

Hi, all brokers are market makers to some extent. If you are trading on the Direct Market Access (DMA) platform then you are dealing on the exchange through IG but if using any other platform then IG looks to match those trades inhouse matching shorts to longs. Any excess they hedge on the exchange themselves. 

So IG aren't taking the other side of your trade, they are covered whether you win or lose and they make on the spread from both parties. If they need to hedge they still win because they get a better spread than what they pass on to you.

 

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