Spread Bet Execution.

[Guest BackyardCursor]

Newbie here, so please bear with me with regards to the naive questions. I'm sure they have been asked several times before.

I have been wondering about how long it takes to execute a spread bet, or even CFD for that matter? Be it opening or closing of your position.

Given that you don't actually own the asset, so market liquidity  shouldn't really be a factor, would the position not be executed immediately?

 

[CharlotteIG]

1 minute ago, BackyardCursor said:

Newbie here, so please bear with me with regards to the naive questions. I'm sure they have been asked several times before.

I have been wondering about how long it takes to execute a spread bet, or even CFD for that matter? Be it opening or closing of your position.

Given that you don't actually own the asset, so market liquidity  shouldn't really be a factor, would the position not be executed immediately?

 

Hey @BackyardCursor, thanks for your first post

Most client positions will be executed immediately. The way that we operate is making sure we hedge the same way as clients. Ideally we would have 50% long and 50% short meaning when one is losing the others are winning and they cancel out each others profit/ losses. Of course most of the time this isn't the case. 

So say 60% are long and 40% are short IG have to hedge that additional 20% long. Because we are hedging trades we have to sometimes ask client, who are trading large sizes, to use advanced orders or call us to hedge their positions directly with us. 

This is why you may occasionally see that some markets become 'unborrowable' (no short positions) or 'unlongable'( no long positions) because we're unable to hedge anymore in that market and we wouldn't take on client positions that we can't hedge. 

I hope this helps

[Guest BackyardCursor]

5 minutes ago, CharlotteIG said:

@CharlotteIG Thanks for the prompt response!

 

[CharlotteIG]

3 minutes ago, BackyardCursor said:

 

No problem at all. If you need me for anything just '@' me 

[LeoTrader]

On 27/11/2019 at 08:33, CharlotteIG said:

Because we are hedging trades we have to sometimes ask client, who are trading large sizes, to use advanced orders or call us to hedge their positions directly with us. 

Hi @CharlotteIG, 

Out of interest, what would constitute 'large size' on a market with deep liquidity like the FX majors? 

By advanced orders, do you mean accepting partial fills and/or using market orders over the default 'current price or better'?

[CharlotteIG]

6 minutes ago, LeoTrader said:

Hi @CharlotteIG, 

Out of interest, what would constitute 'large size' on a market with deep liquidity like the FX majors? 

By advanced orders, do you mean accepting partial fills and/or using market orders over the default 'current price or better'?

Hey @LeoTrader, thanks for the post. 

With major FX pairs it would normally be about £500 per point. 

And yes, advanced orders are the partial fills and market orders. 

[LeoTrader]

Thanks for your reply, @CharlotteIG. That's good to know.