Jump to content

Recommended Posts

I was recently thinking about market impact when trading with IG and came to the conclusion that there probably is not any since our orders are never routed to an exchange but we are trading always against IG.

Also trading volumes don't have the same importance in comparison to trading on a real exchange since IG is always taking the other side of a trade. So one gets always filled even when this would not have happened on an exchange. Here I'm thinking for example about mini futures contracts. Those can have really nasty slippage because of low volume when trading on an exchange but that should not be the case when trading against IG.

Can someone confirm that I'm thinking correctly.

Link to comment

yes and no.

as with all things in life there are positives and negatives for each, including IG. in theory you can get far better 'synthetic liquidity' (in that it's kinda 'fake' liquidity as you're not getting anything, you're just getting filled at that level) which works well for opening orders and also closing deals at exact levels using the guaranteed stop option. For example the other day i traded some uk mid-caps and was filled at the offer in a size greater than there was on the book at that exact time. One trade i was filled nearing the daily traded volume at that exact time for a single price with no slip! I would have been pushed up maybe ~1% if i was on the LSE.

when it comes to futures its a little different, but yes your small simple trade on it's own isn't having a market impact. HOWEVER IG will need to trade on exchange when there is a significant volume in any one direction. For example your 1 lot plus any number of the hundreds of other clients trading at that time. For example if theres 500 people trading Wall Street one way and each hold a lot, IG will probably have to trade some of those 100 lots in the exchange. 

 

EDIT: have you ever used the DMA for shares option? 

Edited by cryptotrader
  • Like 1
Link to comment

Just to add to this, I was under the impression that IG do not take opposite positions from our trades, instead they simply broker them?

A slight concern is that if IG are taking the position in the opposite direction, and they control the software... there clearly would be a high level of conflict of interest.

Maybe @JamesIG can elaborate a bit on this?

  • Thought provoking 1
Link to comment

As far as I am aware (from IG staff) IG does not trade in opposition to its clients (unlike some I believe?).  They take positions in the market place to mirror clients net positions so that they are net even and make their corn on spreads and other fees from clients so it is in IGs interests for their clients to be more successful that others.  The reason traders cannot put a position on from time to time is certain markets is, essentially, because IG cannot get a mirror position in the market place and therefore cannot manage their risk.  This may be frustrating in the moment but overall is a comforting thing.

@JamesIG can you confirm/elaborate?

 

Link to comment

Whilst there is a certain level of complexity in what we offer, the basic premise is this: We take the underlying market data streams and present them to our client base in the form of CFD and Spread Bets. We have nearly 200,000 clients, and because of this it means we don't need to hedge or replicate every trade in the underlying market, because statistically it's likely that opposing views on the market direction will be met by our clients.

For example, if someone trades £10/pt long on the FTSE, there's a high likelihood that someone else will trade £10 short on the same market within a few minutes meaning that we don't need to hedge or replicate each and every trade directly in the market. We therefore have a specific risk profile which we are happy to accept in any one direction for a specific amount of time before hedging those cumulative trades. We therefore have no opinion on market direction, we don't know or mind which way the market moves, and therefore we are impartial bullish or bearish market movements as long as we can replicate and hedge those trades. An absolute priority is to fill each individual client's position at the best possible price via best execution policies, and therefore by a very rough analogy we act as an intermediary "broker" giving our client base access to the markets in a leveraged fashion. 

Hopefully this clarifies? 

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      20,104
    • Total Posts
      88,179
    • Total Members
      69,098
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    Protato
    Joined 04/10/22 18:59
  • Posts

    • Stocks: AAPL, AMZN, NVDA, TSLA, GOOGL, BRK.B, SQ, META, NFLX, ENPH, MSFT, BAC, JPM. Elliott Wave  SP500 US Stock Bear Market: AMZN, AAPL, NVDA, TSLA, GOOGL, BRK.B, SQ, META, NFLX, ENPH, MSFT, BAC, JPM, GS. Elliott Wave Technical Analysis  Stock Market News: Stocks rise, however the move up continue to move up on lower volume, divergence and corrective bear market rally, that should complete in the next trading session Stock Market Summary Elliott Wave Count: Elliott Wave Analysis - (iv) of c) of 4 of (1) Analysis US Stocks: Tesla TSLA, Amazon AMZN, Nvidia (NVDA), Apple AAPL, Microsoft MSFT, Berkshire Hathaway (BRK/B),Block, Inc (SQ), Meta Platforms, Netflix (NFLX), Enphase (ENPH), Alphabet GOOGL. XFL Finance Sector ETF, JPMorgan JPM & Bank of America BAC, Goldman Sachs Group Inc (GS) Stock Market Trading strategies: Looking to short the top and turn in the trading session Video Chapters 00:00 SP500 06:58 Apple (AAPL) 12:22 NVIDIA (NVDA) 14:40 Amazon (AMZN) 18:35 Meta Platforms (META) 20:17 Netflix (NFLX)  21:41 Enphase (ENPH) 24:14 Tesla (TSLA) 27:59 Alphabet (GOOGL)  30:35 Microsoft (MSFT) 31:31 Berkshire Hathaway (BRK.B) 32:33 Block Inc. (SQ)  33:38 Banks JPM, GS 36:14 End. Thanks for supporting! US Stocks: Basic Elliott Wave Counts Apple AAPL  Elliott Wave 4  Corrective rally Amazon AMZN  Elliott Wave 4 Nvidia (NVDA) Elliott Wave  ii) Berkshire Hathaway BRK/B Elliott Wave 4 Alphabet GOOGL  Elliott Wave 4 Meta Platforms FB Elliott Wave iv) Netflix (NFLX)  Microsoft MSFT  Elliott Wave 4 Tesla TSLA  Elliott Wave iii) Square SQ /Block Inc. Elliott Wave 4 JPMorgan Chase (JPM) Elliott Wave 4 Analyst Peter Mathers TradingLounge™ Australian Financial Services Licence - AFSL 317817 Source: tradinglounge com  
    • US DOLLAR TALKING POINTS: The US Dollar has dropped by as much as 3.3% from the high that was set last Wednesday and many are asking if the USD has topped. Given how aggressively overbought the greenback had become, this retracement looks to be a correction in the trend with no evidence yet of anything larger. However – price is approaching some major supports and performance around those levels will be key for determining near-term strategy. Of particular importance is the fact that the US Dollar is a composite of global currencies so the bigger question is when sell-offs in EUR/USD or GBP/USD might return and, in a related item, how will USD/JPY hold up with the pair pegged to the 145 level thought to be the line-in-the-sand for Japan’s Ministry of Finance? Oct 4, 2022 | Full article on DailyFX James Stanley, Senior Strategist
    • EUR/USD and GBP/USD edge up while USD/JPY falters at ¥145.00 again A pause in the dollar rally sees USD/JPY stuck below recent highs, but both the euro and sterling have made gains in early trading against the greenback.    Chris Beauchamp | Chief Market Analyst, London | Publication date: Tuesday 04 October 2022  EUR/USD rebound continues After falling to a twenty-year low last month, the euro continues to rebound against the US dollar with EUR/USD. This still looks very much like a counter-trend bounce that sees the price head back to the 50-day simple moving average (SMA), currently $1.1018 and then begins to falter. This would be in line with previous bounces since April, all of which have found it impossible to hold above the 50-day SMA. This move could see the price head back to $1.01. Further targets lie at $1.02 and then $1.0374. Source: ProRealTime GBP/USD recovers $1.13 The GBP/USD continues to defy the doomsters with a recovery above $1.13. Its own counter-trend bounce remains intact, and if previous bounces are any guide there is still some potential for upside, even if it only reaches the 50-day SMA. Like EUR/USD, the pound is still making lower highs and lower lows against the dollar, with the previous peak at $1.176 marking out the initial target for this bounce. Both stochastics and moving average convergence/divergence (MACD) have room to move up to support this move, but selling the rallies still appears to be the approach here for this downtrending market, although it looks like for now there is still a desire to push the pair higher in the short-term. Source: ProRealTime USD/JPY stalls below ¥145.00 It does look like ¥145.00 is the ceiling in USD/JPY for the time being – repeated attempts to break higher have come to naught, despite the continued strength of the US dollar. Indeed, it is perhaps precisely that we need a pullback in order for the trend to revive. The pair rallied hard from the August-lows, and now sits at some distance from the 50-day SMA (currently ¥139.15). A pullback towards this level might ‘clear the air’, create a higher low and provide a springboard for fresh bullish momentum. Source: ProRealTime
×
×
  • Create New...