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. Learn about how brokers are ranked...
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
- Interactive Brokers
- ED&F Capital Markets
- Sucden Financial
If you are looking for an institutional account you can find a prime broker here.
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.
Where to find DMA brokers UK?
If you are looking for UK DMA brokers we've highlighted some of the major ones above. The only DMA UK brokers we feature on this site offer direct market access and are good standing and properly regulated by the FCA.
Direct market access trading platforms advantages and disadvantages
The main advantage to a direct market access trading platform is that you get clean pricing direct from the exchange order book. You can place your DMA orders direct on the exchange and get in between the bid and offer price.
The main disadvantage of direct market access trading platforms is that if you are used to spread betting or using a CFD broker that widens the spread rather than charging a commission there is an added layer of administration because you have to include commission in your P&L calculations.
Where to find a list of direct market access providers?
If you are comparing direct market access providers we have provided one here. Direct market access providers will cater for larger private and institutional accounts. Generally it's only worth using a direct market access provider if you are trading with over £50,000 and are a regular and experienced trader.
Where can you trade with and find DMA Forex brokers?
Most forex brokers don't offer DMA because you have to be trading in significant size. However, if you want a DMA forex broker you need a futures broker because the Forex market does not operate like the stock market with order books and centralised regulated access. There are some platforms that offer DMA for forex brokers. But if you really want to work forex orders through DMA you can trade CME currency futures with a futures broker.
Direct market access UK stocks, futures, fixed income and so on...
There are many UK brokers offering direct market access, but not all are the same. Choosing a direct market access UK broker is really dependent on your relationship with the broker and the commission rates you'll receive. If you are a start up hedge fund looking for direct market access in the UK you will need a prime broker. You can compare prime brokers using our interactive prime broker finder here.
DMA providers: Three things to look out for...
When comparing DMA providers these are the things you need to look out for:
- Commission rates: If you are a big retail or institutional trader looking for a DMA provider you should be able to negotiate on DMA commission rates. DMA trading is different for every trade and whilst brokers will publish their commission rates online you should be able to get a high volume discount or rebate if you are putting enough business through. After all, there are many DMA providers in the UK so a broker will want to keep you DMA business, rather than lose it to another direct market access provider because of excessive commission rates.
- Leverage and margin: If you are trading with a DMA providers, it's assumed that you are a sophisticated trader. And as such you should get better margin rates than retail traders. However, for DMA trading on futures the underlying exchanges will have their overnight margin rates they will charge the broker. It's unlikely you will get better rates than this. However, you may have to pay more. So when comparing DMA margin and direct market access leverage rates you can check what your broker charges against the exchange websites. If you are trading stock CFDs with DMA access your margin rates are at your brokers discretions and depend on a lot of things like single and multiple position exposure, derivatives hedging and trading experience.
- Market access: Not all DMA brokers provide access to ever market. So when you trade with a direct market access provider make sure you double check that you can trade everything you want beforehand. Opening a DMA account with a broker if not as simple as opening a spread betting account so get it right the first time.