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Spread betting - 5000 point spread on Facebook


Kazeko

Question

I've been using the IG platform since the begining of the year. This is the first time I'm seeing such a huge spread for Facebook, but possibly for any other instrument.

See attached screenshot from this morning. Can someone from IG please provide some explanation on what I'm seeing?

I'm always concerned about the wild swings in the spreads, because it adds an unresonable factor of risk in our trading, especially if you use orders for entry points.

Say I set up an order to place a £1 bet at 20998. If the order is fulfilled and the spread is 5000 points then I've technically just lost  £5000 which of course would trigger my stop loss and the position would be closed, leaving me with quite a hole in the pocket.

Has anyone else come across this before?

Facebook.PNG.545b7a27f6217872e943d2cddf87872a.PNG

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Guest senor

spread is wide on American stock before 2.30 market open. It's tightened up by now I would assume, and then it'll be normal at the open.

doubt limit/market orders would be filled

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Hi @Casseynotes - thank you for your input.

Apologies, the yellow font was my doing, as I highlighted the spread value before posting the screenshot.

I agree, the spread returned to a normal value shortly after.

I'm just curious as to why it was so unusually large and I'm also concerned about the implications of an order being filled while such a spread is in effect.

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Hi @Kazeko - I believe you would have been looking at this around 11am? At this time it's likely that the market is very illiquid and the spreads are quite wide - this is entirely due to the underlying market as the IG spread are a fixed percentage. As you get closer to the market opening 'main session' (as stated by senor) the spreads in the underlying would get narrower as the order book starts to fill with orders. 

Put simply, the spread was wide at that point because no one was willing to sell to you at a price lower than that.

https://www.ig.com/uk/shares/out-of-hours-shares 

When it comes to orders, you would only be filled if a sufficient numbers of shares trade at those specific levels in the underlying market. 

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