Why is liquidity so important? Is it integral to keep a tight bid-ask spread?
Nick Ramsbotham: We believe it is important that liquidity is made available both on and off the exchange order books. When dealing with Winterflood liquidity can be accessed in different ways, we can offer clients two alternatives. Firstly clients can take advantage of our ability and appetite to make risk prices and trade with us away from the order book but within the rules and regulations of the London Stock Exchange (LSE) at prices equal or better than that obtainable on the underlying exchange order books. Secondly, through our low latency electronic trading platforms we offer the ability to interact with the exchange order book which is known as Direct Market Access (DMA). This is classified as trading on exchange and on order book. Liquidity, and therefore the bid-ask spread, is dependent on the underlying ETF. So for example an ETF trading in the Eurostoxx 50 will have a much tighter bid ask than one in, say, Vietnam due to the underlying stocks enjoying a much higher level of
