IG Markets connects to European Exchanges Chi-X and Turquoise

IG Markets, the contracts for difference division of IG Group which offers direct market access to retail clients announced Monday that it has upgraded its DMA product to include the ability for stock market traders to benefit from access to UK European equities via Chi-X and Turquoise, Europe’s leading two multilateral trading facilities (MTFs) – which compete with the London Stock Exchange for settlement of trades.

The news is remarkable as it highlights the increasing importance that alternative trading systems now represent as they gobble market share away from traditional exchanges like the London Stock Exchange, which reduces their liquidity. Launched in 2006, Chi-X has now secured up to 25% of FTSE 100 trades while 5% of FTSE 100 trades go through Turquoise. When one adds up all the trading systems the volume of transactions not flowing through the London Stock Exchange is now about 40%. The growth has been possible as such systems are typically much faster and significantly less expensive Europe’s traditional share exchanges. For instance Chi-X Europe distributes market data to clients directly and via third-party market data vendors at no cost, and trade reporting is available for a low monthly fee.

What does this mean for you?

PureDMA’s hyprid platform is now setup to search all three systems; in this case the London Stock Exchange, Chi-X and Turquoise, locate the best prices and include them in the order book you see in PureDMA. Clicking on one of these prices will route your order to the venue with the better execution. On your Level 2 screen you can either view all prices in a ‘hybrid’ format which includes all the best quotes from the different exchanges listed in one order book or you can view the single order book from any chosen exchange.

IG Markets L2 now includes trades executed on Chi-X and Turquoise

Increased possibility of getting your trade filled

The Smart Order Router is designed to route orders to the exchanges offering the better execution which may mean that stock orders may be split across multiple exchanges but the execution will still count as a single trade. If the requested price or volume is not available in the current order book and your order cannot be immediately filled, it will be directed to the primary exchange where the greatest level of liquidity is usually available.

Free live feeds

Traders who don’t want to pay the live data exchange fee from the traditional exchanges will now be able to check live prices from the free multi-lateral trading facilities. This means free live date on over 1450 European and UK shares. Moreover, should an order be placed using the free prices, and a better quote exists on a fee-liable exchange, your order will be processed at the better price, whether you are a paid subscriber or not to the main feed.

For IG Markets clients the move is great news as now they have the ability to directly interact with the order books of Chi-X and Turquoise – two alternative systems to the LSE. This means access to more liquidity on over 1450 UK and European equities and better prices on share CFDs as IG’s technology works in the background sourcing the best price, and displaying its findings on their Level 2 screen.

IG Group stated that the move is likely to benefit around 80,000 of its clients, out of a total of 133,000. The move is also beneficial to Chi-X as it provides the system with additional liquidity in a fragmented market.

‘We are delighted that IG Group is the first retail CFD provider to connect to Chi-X Europe,’ stated Hirander Misra, Chief Operating Officer of Chi-X Europe. ‘We consistently represent 25% of all trading in FTSE 100 stocks and over 15% of the leading European indices.’

‘Trading on Chi-X Europe delivers measurable price improvement and we are pleased that IG Group’s clients will now be able to trade on our MTF.’

Comments: Particularly notable is the fact that just days ago, clients at IG Markets were limited to prices offered only on the London Stock Exchange and other traditional exchanges in Europe. As a result of this latest move, clients will now be able to see greater liquidity and get even better prices when they trade with either IG Markets or IG Index. IG Group keeps innovating and with one clean sweep has just made the CFD marketplace more competitive while upping the ante for rivals in the industry.

Tags: CFDs, contracts for difference, Direct Market Access, DMA, IG Group, IG Markets

This entry was posted on Tuesday, November 17th, 2009 at 12:05 am and is filed under Broker News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.