Find out how we aim to consistently achieve the best possible result when handling your orders and executing your trades.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Options and turbo warrants are complex financial instruments. Trading these financial instruments involves the high risk of losing money rapidly.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 74% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money.
Options and turbo warrants are complex financial instruments. Trading these financial instruments involves the high risk of losing money rapidly.
Best execution
What is best execution?
Best execution refers to our responsibility to take all sufficient steps to achieve the best possible result on a consistent basis when executing orders on our clients' behalf, for financial spread betting, CFD, share dealing or Smart Portfolio orders.
As part of out policy to achieve best execution, there are a variety of factors that we consider:
- Fairness of price
- Speed and likelihood of execution
- The size and nature of the order
Our intelligent execution technology has been designed on the basis of our order execution policy to take into account these and any other relevant factors, such as the nature of the underlying markets and any specific instructions you have given us, so that we can consistently deliver what we consider to be the best possible results.
It’s important for those who want to trade with us to understand how we treat your orders and execute them for you. You can find important information within our customer agreement, summary order execution policy and from the information about the quality of our execution on this page.
How does this differ for professional clients?
Getting the best price for our retail clients and minimising the total cost of the transaction takes precedence over all other factors. For professional clients, in certain circumstances we may prioritise other factors, such as the speed and probability of execution, if we determine that these have equal or greater importance compared to overall price.
Learn more about best execution at IG
Price
Price is the most important factor for our retail clients when considering best execution, and we source our prices from multiple venues. These venues are constantly reviewed, and we will always try to add liquidity venues that improve the integrity of our price and reduce the transactional charges to our clients.
Markets can move in milliseconds, meaning the price you click to trade on may have changed by the time your order reaches us. Our order management system will never fill you at a level worse than the one you requested – however, your order may be rejected.
A symmetrical tolerance level is set a certain distance either side of your requested price – if the market stays within this range by the time we receive your order, your order will be executed at the level you requested.
If the price moves outside this range, we will do one of two things:
- If the market moves to a better level for you, our price-improvement technology will ensure you receive it.
- If the price moves beyond our tolerance in the opposite direction, we'll reject the order and ask you to resubmit at the current level.
We do these checks to ensure the price your order is filled at is consistent with the current price that is available to our clients.
If you submit a market order it will be filled in the size and price available when we receive it.
Spreads
As getting the best price for clients is our number one best-execution consideration, reducing the spreads and transaction fees our clients face is a priority for us.
We’re clear and transparent about our spreads and commissions for all asset classes, and you can see full product details -– including minimum, time-weighted average and out-of-hours spreads where applicable – at any time. For more information, follow the links below:
Over recent years we have charged our clients less and less for trading with us. For example, we have reduced our minimum EUR/USD spread to 0.6 and our oil spread to just 2.8. We have also introduced a more cost-effective way to add guaranteed stops to positions, so you’ll only pay a premium if your stop gets triggered.
Rejection rates
At IG we constantly monitor client rejection rate to ensure your likelihood of execution is as high as possible. Below are our order rejection rates for all spread bet and CFD asset classes, per quarter, over the last two years.
Why do clients orders get rejected?
The main reasons why clients get rejected are price changes and issues with liquidity. We have two order types that enable you to take more control over your rejection rate and help you increase the likelihood of your orders being accepted:
- 'points through current' (this helps with price rejections), and
- 'partial fills' (this helps with liquidity issues).
Find out how to use these features and how they could help reduce your rejection rate and improve the likelihood of your orders being accepted within the price parameters you define.
Slippage
Slippage is the term for when the price at which your order is executed does not match the price at which it was requested.
- Slippage on stops is of negative value for the client
- Slippage on limits is of positive value for the client
Therefore comparing slippage rates on stops and limits should be a vital execution metric when comparing brokers; clients should be seeking lower stop slippage and higher limit slippage. IG has asymmetric execution logic to make this happen.
Below is IG’s slippage performance from the last quarter:
Summary
Most popular currencies
| Markets | Stops - Zero slippage1 | Stops - Negative slippage | Limits - Positive slippage | Average negative slippage (in pips) | Average positive slippage (in pips) |
|---|---|---|---|---|---|
| AUD/USD | 96% | 4% | 22% | 0.061 | 0.078 |
| EUR/USD | 91% | 9% | 25% | 0.136 | 0.119 |
| GBP/USD | 83% | 17% | 44% | 0.490 | 0.474 |
| USD/CAD | 88% | 12% | 19% | 0.315 | 0.301 |
| USD/JPY | 95% | 5% | 14% | 0.081 | 0.072 |
Most popular indices
| Markets | Stops - Zero slippage1 | Stops - Negative Slippage | Limits - Positive Slippage | Average negative slippage (in pips) | Average positive slippage (in pips) |
|---|---|---|---|---|---|
| Australia 200 | 78% | 22% | 47% | 0.167 | 0.181 |
| FTSE 100 | 93% | 7% | 55% | 0.088 | 0.195 |
| Germany 40 | 78% | 22% | 58% | 0.240 | 0.351 |
| US 500 | 74% | 26% | 92% | 0.108 | 0.166 |
| Wall Street | 55% | 45% | 92% | 0.674 | 0.871 |
1 This is based on global data for the IG Group on non-guaranteed stops only.
Maximum automatic size
Another important metric to consider is maximum automatic size which ensures a client’s order is executed automatically without being rejected for too large a size. If the order is rejected, the resulting delayed execution is effectively a form of slippage.
Below are IG's maximum automatic sizes:
Most popular currencies
1 This is the minimum liquidity a client should usually be able to receive per trade during main market hours. A client may be able to receive more depending on broker exposure.
Active orders handled manually
The absence of manual orders increases the speed of execution you receive and improves the likelihood of us being able to execute your order at the specified price.
In instances where a greater period of time has elapsed from the order being requested to it being filled, there is an increased likelihood of the price deviating from the one requested.
Margin policy
If you don’t have enough funds in your account to keep your trades open, you’ll be put on margin call.
This refers to when the total capital you’ve deposited - plus or minus any profits or losses - drops below your margin requirement.
At this point, your positions will be at risk of being automatically closed out.
Order execution policy
When we execute orders or your behalf, we will act in a fair and consistent manner in accordance with our order execution policy.
This policy outlines the factors we consider and the steps we take when handling and executing your orders. You can see a summary of that policy below, along with a list of the execution venues, exchanges, liquidity providers or brokers we may rely on to execute or price your orders.
- Summary order execution policy (PDF, 728KB)
- Execution venues (PDF, 98KB)
PDFs require Abobe Reader, which is available free from Adobe.
Out-of-hours markets
We offer two-way quotes on a variety of markets outside of their traditional trading hours. This enables us to offer continuous, fair trading opportunities, even when the underlying market is shut. However, in these circumstances we cannot draw on the current market price as a reference, so will instead create our own prices to reflect our view of a market’s prospects.
For example, we might price an out-of-hours index by taking into account the performance of other indices around the world that are open. We might also account for our overall clients’ trading activity on the out-of-hours market, or factor in news stories that break outside of the trading session. Since our out-of-hours prices are market made, automatically priced off of moves in correlated markets, you’ll find that our spreads are generally wider than during normal trading hours. This is all done with our clients' best interest in mind.
Remember, out-of-hours prices may be very different to those available when the market opens next, so trading on them could lead to a profit or loss that would not have otherwise been incurred if you’d waited.
Digital 100s
To trade digital 100s, you’ll need to qualify for an IG professional account.
Digital 100s enable you to trade on whether statements about the future behaviour of a market will be true or false. For example: ‘EUR/USD to be above 11446.1 at 4pm’ or ‘Silver to be below $14.00 per ounce at the close of trading’.
Each digital 100 is priced between 0 and 100. The closer the price is to 100, the more likely it is the statement in question will be true. The closer it is to zero, the more likely it is it will be false.
Our digital 100 prices are based on the behaviour of an underlying market, but set by our dealing desk according to four factors:
- time to expiry
- the underlying market’s current value
- our expectation of future volatility
- client business
If the statement you trade on does indeed end up being true, the digital 100 would close with the price settling at 100. If on the other hand the statement turns out to be false, the digital 100 price would settle at 0.
FAQs
What is best execution?
At its heart, best execution refers to our obligation to take all sufficient steps to consistently obtain the best possible result when executing orders on our clients’ behalf.
Best execution is a requirement of the EU Markets in Financial Instruments Directive (MiFiD) and the Financial Conduct Authority (FCA), and applies to all firms regulated in Europe who execute orders on behalf of retail and professional clients.
What do you consider when executing my orders?
When executing your orders, our intelligent execution technology will automatically consider your individual request and the characteristics of the underlying market, including the fairness of price and likelihood of execution.
We offer over 17,000 markets to 313,000+ active clients (July 2020) across the globe. With more than 40 years’ experience of interacting with and learning from the markets, we have taken great care to determine the best approach when executing orders for every product we offer.
What is an OEP?
An OEP, or order execution policy, is a document produced by each regulated financial services firm in the EU. It details all the execution parameters that a firm deems important to obtain the best possible result for its clients.
This includes the steps taken to achieve best execution – taking into account the nature of the client’s order, the priorities the client gives in filling that order and the market in question.
How does best execution affect me?
All financial services firms in the EU that execute orders on behalf of retail clients are required to offer best execution. However, it is up to individual firms to install systems and procedures that deliver, review and monitor this. Best execution will therefore vary between firms, and an order executed by one could achieve a different result to another.
We aim to be transparent in our approach and provide you with information that enables you to assess both our execution practices and their results. You can find this information within our customer agreement and summary order execution policy. You’ll also be able to see details of our execution quality over time, and understand how our practices can benefit you.
If you’d like to see full details of all our products, please visit the individual ‘product details’ pages on our website.
Has best execution always been important?
Delivering best execution has always been important, and we monitor our execution statistics each month to ensure we’re doing all we can to achieve the best possible result for our clients. By publishing these statistics, we’re being completely transparent about our performance.
How do you monitor best execution?
We monitor a variety of execution performance metrics through a monthly report. In the report, we focus on monitoring the execution factors that are deemed the most important for achieving the best possible outcome for our clients. You can find these execution factors in our summary order execution policy. On an annual basis we also provide you with information on our quality of execution (RTS 28).
For more information on best execution, please refer to our regulatory disclosures updated on a regular basis under MIFID II reporting obligations.
1 An 'active' order, submitted through our platforms, is where you give us an instruction to execute an order immediately. As opposed to 'passive' orders where you give us an instruction to execute an order later, subject to the price moving to a specific level.
