Jump to content
  • 0

DMA for shares possible in an ISA?


Guest EdMiller

Question

Guest EdMiller

As I understand it, Direct Market Access for shares with IG does not allow me to place orders directly onto the London Stock Exchange electronic order books. Instead with IG, I would actually be buying (assuming I qualify as a 'Professional client' and am granted DMA) a CFD based on the underlying price of the share itself. Therefore I would not be able to use DMA in a stocks & shares self-select ISA (though I would be able to see the Level 2 price data if I paid the L2 data fee) because CFDs are not allowed in ISAs.

Have I understood this correctly?

Link to comment

5 answers to this question

Recommended Posts

Hey @EdMiller - just to confirm, when you are in your CFD account and executing DMA you are buying and selling directly on the LSE (or whichever exchange you are looking at). We hold the stock as a CFD on the back end, but for the execution side of things you are dealing directly in the market. As stated above, for ownership rights you wouldn't be eligible. 

If you are in a share dealing or ISA account type then you can also deal DMA. The stock is then held in your account via a nominee account format. 

Link to comment
42 minutes ago, EdMiller said:

As I understand it, Direct Market Access for shares with IG does not allow me to place orders directly onto the London Stock Exchange electronic order books. Instead with IG, I would actually be buying (assuming I qualify as a 'Professional client' and am granted DMA) a CFD based on the underlying price of the share itself. Therefore I would not be able to use DMA in a stocks & shares self-select ISA (though I would be able to see the Level 2 price data if I paid the L2 data fee) because CFDs are not allowed in ISAs.

Have I understood this correctly?

Hi @EdMiller, that doesn't sound right, as I understand it DMA can be used with a cfd account and/or a share dealing account. A cfd account is leveraged while a share dealing account is non-leveraged so with share dealing you are buying the underlying while on cfd you are buying a derivative of the underlying.

Also you do not need to qualify as a 'professional' to use DMA, I think to only requirement is to have at least £1000 in you account. 

https://www.ig.com/uk/l2-trading-platform

https://www.ig.com/uk/shares/shares-dma

image.thumb.png.b23ecfbd6a707580dfd87e00c98e353f.png

Link to comment
Guest EdMiller

Hi @Caseynotes, thanks for your reply. Though I hope you're right, I think I'll call tech support or send them a message then because on the 'Dedicated DMA platform' page: https://www.ig.com/uk/l2-trading-platform if you scroll down the page it says this:

"How does DMA work?

Our DMA service allows you to trade on underlying market prices and depth, but what you’ll actually receive on placing a trade is a CFD from us. It works like this:

  • DMA displays the best bid and offer price available for a particular market, plus further prices on either side of the order book
  • You place an order, and we instantaneously conduct a margin check to ensure you have sufficient funds to cover the margin on your proposed trade
  • If the margin check is satisfied we place an order in the market and, at the same time, create a parallel CFD between you and us

So while you’re trading at market prices, you won’t gain any ownership rights over the equities or currencies that form the subject of your CFD." --------------------------------------------------------------

But there is no mention of you just owning a CFD (which are not permitted in ISAs), rather than the underlying share when you click the 'Shares DMA' page, as you have seen.

Thanks again.

Ed

Link to comment

Hi Ed, of course you should speak to IG but if ever margin is mentioned you are automatically talking about a leveraged account (cfd) and not a share dealing account. If you have a share dealing account you can trade on DMA but will never have access to leverage. The link in your post is the link I sent you, the second link I sent was specific to shares DMA and there is no mention of cfd or margin.

 

Link to comment
Guest EdMiller

Thanks for clarifying @JamesIG, the 'How it Works' section on the L2 trading ('Dedicated DMA Platform') page:

https://www.ig.com/uk/l2-trading-platform

left me with the impression that DMA for share accounts would not involve buying actual shares but only trading in their underlying prices via CFDs (I understand some trading platforms offering 'DMA for shares' operate this way) and hence DMA would not be available in IG's self-select share ISA (since CFDs are not permitted in ISAs). You have confirmed that this is not the case: actual shares CAN be bought via Direct Market Access and held in such an ISA in nominee format. 

Many thanks,

Ed

 

Link to comment

Archived

This topic is now archived and is closed to further replies.

  • image.png

  • Posts

    • Commodity Market Elliott Wave Analysis for Bitcoin, Bonds, Yields, USD/ DXY, Gold, Silver, Iron Ore, Copper, Uranium, Crude Oil, Natural Gas, Corn, Wheat, Soybeans, Coffee, Cocoa. Commodity Market Elliott Wave Analysis Update: Identifying the crucial turn in the USD is paramount in our analysis. However, the challenge lies in interpreting the upward movement of the USD DXY, as it can be construed in multiple ways. To gain clarity on the DXY, I examine the 10-year Yields, which indicate further upside potential. Concurrently, TLT Bonds suggest continued downside momentum. Consequently, Gold, Silver, and base metals remain susceptible to selling pressure. Additionally, the Crude oil market exhibits an upward trajectory, aligning closely with the movement of the USD DXY. Notably, Forex pairs, particularly the AUDUSD, demonstrate a direct correlation due to the interconnectedness of commodity dollars. In summary, the market pivot necessary for trading has yet to materialize and may not occur until mid-March 24. Bitcoin: Wave iv) has concluded, and Wave v) appears poised towards 55k. Dollar: Expectations point to an increase in both the Dollar and Yields, with Bonds likely to decline. Gold and Silver: Currently experiencing a corrective rally. Crude oil: Favorable for long positions in crude, while shorting gas remains advisable. Video Chapters 00:00 Bitcoin (BTC) 03:28 US Dollar Index, DXY / TLT Bonds. US Gov Bonds 10 Yr Yields 05:51 China 15:23 Precious Metals: Spot Gold XAU /GDX ETF / US Spot Silver XAG  16:20 Base Metals: Iron Ore, Copper XCU/USD. Uranium URA ETF 19:59 Energy: Crude Oil WTIOIL / Natural Gas NG 22:22 Softs and Grains, Cocoa, Coffee, Wheat, Soybeans 25:31 End Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817 Source: tradinglounge. com  Join & Learn Elliott Wave from Experts Stay ahead of market movements and make informed decisions with our comprehensive analysis.  
    • Yeah, I think it's the mechanism behind the BGB price trend. This could go farther than one would expect. So I'll be trying to add it to my pf to help boost its healthiness in the future.
    • I don't think we can still take part in the airdrop but buying it could be the best option particularly as the market seems to be helping to create a good entry price.
×
×
  • Create New...
us