What is spread in forex IG?
Our forex spreads are variable depending on underlying market prices. In most conditions we can usually offer our minimum spread, but when market prices go wider, our spread will increase. Market prices can get wider at illiquid times of day, or when major news or economic data is released.
Does IG have fixed spreads?
*IG commodities costs are based on our fixed spreads, with a trade size of £1 per point.
Why are IG spreads so large?
As market volatility rises, so the bid and offer spreads widen. This is a function of a normal market and IG aims to ensure, where possible, to deliver competitive pricing to all its clients.
Why are spreads so high?
A higher than normal spread generally indicates one of two things, high volatility in the market or low liquidity due to out-of-hours trading. Before news events, or during big shock (Brexit, US Elections), spreads can widen greatly. A low spread means there is a small difference between the bid and the ask price.
Why are tighter spreads better?
When trading forex, or any other asset via a CFD trading or spread betting account, you pay the entire spread upfront. This compares to the commission paid when trading share CFDs, which is paid both when entering or exiting a trade. The tighter the spread, the better value you get as a trader.
Why do spreads widen?
Because bond yields are often changing, yield spreads are as well. The direction of the spread may increase or widen, meaning the yield difference between the two bonds is increasing, and one sector is performing better than another.
Does IG hedge?
We are just acting as another market-maker,” says Bole. However, in less liquid markets, such as spread bets on single stocks, IG Index cannot rely on investors taking both sides of the market. Instead, it hedges its exposure using futures on the underlying stock.