Direct Market Access

 Market Maker

 Identical price and liquidity to the Exchange

 Artificial prices controlled by dealer intervention

 Straight-through processing (STP) – orders automatic flow into the underlying market without intervention from dealers

 Potential Requotes and possible slower  execution as orders must be authorised  by a dealer

 Real market liquidity

 Discretional liquidity

 No additional spreads – market price received

 Potential for additional spreads

 Potential to be a price maker or taker

 Price taker only

 Can participate in opening and closing market auctions

 Can NOT participate in opening and closing market auctions

 Trades 100% hedge

 Alternative hedging methodology

Trades with clients – Provider does not profit from client losses

 Trades against clients – Potential to profit from client losses

Direct Market Access (DMA)

DMA CFDs result in an order being passed directly through to the underlying physical market with no dealer or market maker intervention, resulting in real time execution and true market prices. DMA CFDs provide complete order transparency allowing clients so see their orders being hedged in the underlying market, join a bid or offer queue and participate into the opening and closing match out phases. When trading DMA CFDs you receive all the benefits of trading shares with the additional advantages that CFDs offer.

Market Maker 

Market Maker CFDs are not directly hedged in the underlying physical market; instead it remains the discretion of a dealer or market marker as to whether they hedge CFD position in the underlying market. As it is up to the discretion of the Market Maker as to whether CFD positions are hedged the provider can be exposed to a significant amount of market risk. This model results in slow order execution and lacks transparency as individual client hedge orders are not directly entered into the physical market. The queuing system is at the discretion of the CFD provider. Furthermore, Market Maker CFD providers are unable to provide partial fills, and will typically only fill client orders once the bid price reaches the offer price or offer price meets the bid price which means that you may be forced to pay a higher price when purchasing or a receive a lower price when selling.

Things to note when trading CFDs via a market making model are:
Synthetic prices – The market maker can decide the prices that you trade at.
Re-quotes at the discretion of the market maker
Customer is a price taker ONLY
No open and closing price auction participation 
Slower execution time as all orders must be authorized manually by a dealer