When do liquidity problems occur?

[SanMiguel]

At what point would you expect liquidity problems to occur in a CFD or spread betting account, ie what levels of trade?
I've often seen a compounding theory that 20 pips per day with a 1k account can be traded up to £1m within 1 year but to do that it would be above the £700 per pip mark by the last few trades, not an amount that someone should expect to get filled very quickly or at least not in one go...?

 

[Jaydee]

Depends a lot on the specific market you are trading. Eurostoxx Fut is more liquid than FTSE Fut, for example. You would have to work out the average daily dollar liquidity of a product over a month to work this out.

 

[Dubai]

I think you'd have to scale your position in by building up your position over a few ticks. Could easily do with on a broker forex broker but not sure about spread betting.

 

[arabianights]

Absolutely entirely depends on market. £700/pip on stoxx ain't gonna be a problem.

As an extreme example, I can see a market now where I can put on £403 637.50/pip in the underlying if I scooped the enitre offer.

(Needless to say that market doesn't move much)