Featured Broker: Core Spreads - Get the tightest spreads on FX, CFD & Spreadbetting (more info)
Compare brokers that offer Direct Market Access (DMA) who are authorised and regulated by the FCA. Use DMA to get inside the price and reduce your trading costs by getting better prices.
CFD trading carries a high level or risk and can result in losses that exceed your deposits.
The best CFD brokers that offer DMA (Direct Market Access) tend to be well established players with a mainly professional or institutional client base.
Trading CFDs via DMA gives a trader an edge over the more retail focused CFD broker because they can buy at the bid and sell a the offer. Trader buy and sell order go straight onto the order book and can be worked in a professional manner using order types such as iceberg, limit and market or limit stops.
It is particular important to use a CFD broker that offers DMA is you are a large trader dealing in over the normal NMS (Normal Market Size) on the main markets or in illiquid markets where you don’t want to show your entire order in one go. In smaller assets, big orders can move the market before you get a chance to get in.
The main DMA CFD brokers of note that offer Direct Market Access are:
- IG DMA CFDs
- Saxo Capital Markets
- Valbury Capital
- ED&F Capital Markets
- Sucden Financial
All these brokers are well capitalised and have experienced brokers to assist with account set ups and look after their customers well.
If you want to get inside the bid offer you need to be trading with direct market access (DMA). However, this is a tricky thing to do if you want a spread betting broker to provide direct market access.
The reason is quite simple. The mechanics just don’t work. Spread betting is OTC, in that it is conducted off exchange and structured as a bet. There is no exchange to access and the quotes provided by the spread betting brokers are based on the prices in the underlying exchanges.
However, ProSpreads will offer a form of direct market access. They will give you a trading platform and access to the markets, when you trade they hedge everything and convert it in to a spread bet post trade.
There are a few other spread betting brokers that provide Level-2 and Direct Market Access through CFDs, but then you lose the tax advantages.
You need a big account to trade with ProSpreads as your trade size needs to be the minimum one exchange lots size. In the FTSE it’s £10 per point for example.
In reality though, spreads nowadays are so tight. Especially with new brokers offering no frills trading like Core Spreads with FX spreads of 0.7 and FTSE spreads of 0.8. The real market is only 0.5.
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