Cfd Uk Equity Orders

[Tuffty]

Can anyone confirm that I am correct to say that when I enter an order for a UK equity they can either take on the risk themselves, or pass the order through to the market. Do all providers behave like this or are there some where you can always see your order hit the market?

 

[ed crane]

depends ...who are you entering the order through?

 

[Tuffty]

City Index. I'd imagine coming from a Spread Betting background they'd be happy to take on the risk themselves. However, I wondered if the traditional brokers would always automatically put the order through to the market as they wouldn't be used to netting punters off against each other.

 

[knorrie]

I asked E*Trade about this some time ago. With their new direct-access CFD service, which I don't use, then your orders go immediately on the order book (I saw this on one of their live online demos, which incidentally is very entertaining and informative, well worth having a look at).

However with their standard quote-driven CFD service, it's not so simple. I was concerned that E*Trade might be taking the other side of my trades, especially as (to me anyway) their T&Cs weren't clear on this. I was categorically told that this doesn't happen, that they only act as broker, and that the orders are routed to CFD market makers. When I asked who the MMs for CFDs were, and how they operated relative to the equity market, all I got was 'that's confidential'. Hmm, curious.

In practice though I *always* get instantly filled at the quoted price with order sizes of £5-£10K so I'm not concerned, although I would like to find out how it really works.

KenN