IGMarkets Review

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IG Markets Review

IG Markets is the biggest spread betting provider in the UK but everywhere else they do CFD business, in fact IG Markets is the second largest CFD provider in Australia.

I’ve been using IG Markets for a number of years now and find them to be good. I use the Level 2 system now and when I place a trade, within seconds they match your order in the depth, which is a plus as it helps the price in your direction, maybe only a slight help but we need all the small advantages we can when using CFDs.

How IG Markets works

I can only comment on how IG Markets works, so here goes -:

With their basic platform let's say you buy 20,000 shares as a CFD in company XYZ. IG only quote the exact same prices as in the underlying share. So you buy 20,000 at the ask which is $1.00, neither you nor IG have bought any shares in XYZ, you are merely entering a contract with them. How they hedge against this I don't know, when I asked they said they try and match buyers with sellers.

So in the above example you have not influenced the underlying share price one bit.

Now with their L2 dealer system (direct market access). Same scenario. You buy 20,000 shares in XYZ as a CFD, difference is this time as soon as you press the buy button they will put an order for 20,000 shares in XYZ, so you will see a buy order for a dollar in the buy depth. Obviously this now effects the share price directly.

So having used in IG platform in conjunction with DMA I can say it is very good, used CMC very briefly once, but if the market moved I would often get re-quoted and lose a few points when closing a position- not always a biggie if you don't trade often but if you do it can be.

General Points

1. Over 7000 shares worldwide are offered, plus forex, indices, commodities and options, with margin rates from just 5%-10% on blue-chip shares. IG Markets are continually adding new markets and now offer the offers the main European and Asian indices. In currency pairs, some of its more unusual offerings include ‘a broad range of Scandinavian, Australasian and exotic currency crosses’. In metals, IG offers the usual suspects plus three-month bets on aluminium, lead, nickel, tin and zinc. Recent additions include the Indian ‘nifty fifty’, the Johannesburg Stock Exchange Top 40, Taiwan and Tokyo futures, a Singapore (MSCI) tracker, the Toronto Stock Exchange 60 and carbon emissions futures.
2. IG markets offers both the market maker and direct market access pricing models. Direct market access offers you the advantage of allowing you direct access to the stock exchange order book and is particularly relevant to short-term traders as it allows more control on the price you get. Take the case of a company issuing its quarterly trading update ahead of the opening session, this is likely to lead to a significant move, a DMA trader could look to place an order in the auction so as to get in at the official opening price for the day. This facility is only offered to cfd traders and is not available with the spread betting product.

Good Points

1. Trading platform is easy to use and has a good support desk.
2. Compatible with most operating systems including Mac. PDAs and smartphones can also gain access.
3. Once logged in you are presented with a series of windows that are fully customisable to display watch lists, charts, news and analysis.
4. Share CFDs at transparent market prices from just 0.1% commission. IG Markets CFD equity/share prices are the same as the underlying market. They charge a commision to buy or sell rather than adjust the prices.
5. With IG Markets, dividends are credited to your account on the ex-dividend date, just like a normal share holding except that the payout is quicker. They also give you a free L2 dealer screen.
6. One real positive about IG Markets is they're always improving their service on a regular basis, advanced tick charts for one.

Bad Points

1. Web based platforms are slower than application platforms (platforms you download in your pc) in terms of updates, price feeds, feeling positions and server response.
2. PureDeal (the market maker platform) only displays Level 1 data so no market depth or course of sales can be found for share CFDs and some of the charting package and analysis isn't as detailed as some other providers.
3. Shorts are not listed - you either have to try and Short a stock to see if it's accepted or ring them up - even if a stock is listed on the exchange as being a acceptable SHORT it may not be accepted by IG.
4. Spikes in prices & charts are usually errors that IG don't hold you to e.g. if it did take you out of the trade a phone call usually fixes it (and the chart).

Commissions

What is the commission charged for:

UK Stocks SETS? UK Stocks non-SETS?

For UK stocks the commission is taken as a percentage, with a minimum commission per trade. All UK shares look like they are commissioned at 0.1%...regardless of where they are placed in the FTSE...

UK Stocks SETS: 0.10% £10 minimum.

UK Stocks non-SETS: 0.10% £15 minimum.

For US stocks the commission is in cents per share, again with a minimum commission. This amounts to 2cent/share with a minimum of $15.

For European and Australian stocks, it is also percentage based.

European stocks: 0.20% €15 minimum.

Australian stocks: 0.20% AU25 minimum.

Funding rates that apply will be the inter-bank offered rate for the currency that the trade is denominated in, plus/minus 2.5%. For example, a funding rate of LIBOR +2.5% will apply to long positions in UK stocks.

Personal accounts include following data feeds free:

LSE Level 2 data

NYSE Level 1 data

AFX News