So I’m using a spread-betting company, and they are the market-maker right. Meaning they set the bid/ask price, which is some way related to the real exchange prices. I’m wondering if it makes sense to pay for level 2 access to get live price data, and presumably volume info to get a better edge over what is otherwise just their price and nothing else? This is good/bad idea?
Yes, they are the market maker so when you trade, theoretically they are your counter-party and you will be trading against them and not the market. They will however have to provide pricing based on what the underlying market is doing and cannot simply quote a price out of thin air as they will end up with no business, so for instance if you are trading with the trend in a liquid currency pair, though you will be slightly disadvantaged by the spread, if you are right you will still make money. Also different spread betting providers may provide different spreads based on the flow of business they have but most should provide similar spreads for any given currency.