How are CFD prices determined?
There are two distinct models by which CFD prices are offered by the various CFD providers: Some CFD providers act as a market maker where they offer synthetic CFD prices which have the potential to be different to the underlying market price. Investors trade at prices determined by the provider – which gives the provider the flexibility to offer CFDs based on security prices which are higher or lower than the prices in the underlying market. Other providers offer Direct Market Access (DMA) where they offer CFD prices and liquidity that are identical to the underlying market. Investors enter into CFDs at the underlying market price. Wealth Within support the DMA model as we consider this model offers the most transparent pricing and cost structure to clients.
