What is a 30 point spread?

[imaginator]

Why do they have such a spread?

I was trading RIO(UK) last week, and suddenly there was a 30 point spread.
Bid price was 2625, and offer wad 2655. I dodnt know what the current price was because CMC's platform doesn't show it.

Say I waanted to buy at 2630, what bid should I put it? I tried putting 2630, but when the price went up to 2635, my order still didnt trigger!

 

[Bobby]

Why do they have such a spread?

I was trading RIO(UK) last week, and suddenly there was a 30 point spread.
Bid price was 2625, and offer wad 2655. I dodnt know what the current price was because CMC's platform doesn't show it.

Say I waanted to buy at 2630, what bid should I put it? I tried putting 2630, but when the price went up to 2635, my order still didnt trigger!

Imaginator,

Learn what is a MM & DMA.

Bob.

 

[Milk Man]

Imaginator,

Learn what is a MM & DMA.

Bob.

i.e. Macquarie and E-Trade use Direct Market Access, not Market Maker set-up.

 

[imaginator]

what does IG Markets use? Is it same as CMC?

 

[scsl]

what does IG Markets use? Is it same as CMC?

IG Markets’ default trading platform is a market maker model. They also have DMA available through their L2 Dealer platform. I use IG’s MM model and am happy with it because it always follows the underlying market i.e. there is no widening of spreads.

CMC uses its trademark MarketMaker platform. Despite the tell tale name, I’m not sure whether it is a MM or DMA model, although I’m leaning towards DMA because at their seminar, I was told to watch out for the depth/volume of orders. Also because I have to pay about $40 per month to access the ASX market.

Basically a DMA model means that every CFD order is placed as a share trade through the ASX – appearing in the bid/ask queue. Under a MM model CFD trades aren’t always hedged in the underlying market, but instead a synthetic market is created by the provider – you are a price taker and so you cannot move the market.

There are pros and cons to both. For example, you cannot participate in the pre and post-market price auctions of the ASX. But a MM has the capability to offer more liquidity than the underlying market and there are more tradeable securities offered.

Using the DMA model usually means that traders have their orders filled before market maker traders. But it can also mean exchange fees payable to the ASX and less CFDs that you can short.

Hope this helps!

Cheers,
scsl

 

[Porper]

IG Markets’ default trading platform is a market maker model. They also have DMA available through their L2 Dealer platform. I use IG’s MM model and am happy with it because it always follows the underlying market i.e. there is no widening of spreads.



There are pros and cons to both. For example, you cannot participate in the pre and post-market price auctions of the ASX. But a MM has the capability to offer more liquidity than the underlying market and there are more tradeable securities offered.

Using the DMA model usually means that traders have their orders filled before market maker traders. But it can also mean exchange fees payable to the ASX and less CFDs that you can short.

Hope this helps!

Cheers,
scsl

With IG Markets you can participate in the auction with their DMA platform.This is free, so apart from setting the odd buy stop etc., I don't see any advantage using the basic platform when we have access to DMA.

Also, it is very handy if trading patterns to be able to place an order 30secs before close, I do this quite often if I see a strong breakout from a pattern looming.

 

[Ageo]

Yep, just in the process of switching from CMC to IG