I have an account with PS and a few others, and to honest I don't care if they take the other side of my bets as long as I get the price I want. I prefer to use PS as the platform is super quick and I never get any requotes. What I do not like is the thought of an SB sitting on my order, seeing where the price is going before accepting or rejecting my bet.
With regard to market orders/immediate execution (only) I see three possibilities:
1) client trade is immediately, automatically hedged on an exchange
2) client trade is (when possible) matched against opposing client positions, residual risk being hedged on exchange as the need arises
3) dealer takes the other side of the deal, or has discretion to do so.
1 would tend to give me most comfort. I think 2 is also fine, provided that execution/confirmation is rapid, and achieved at the price seen. I think that most or all of the comments I have read regarding Prospreads indicate that market/immediate orders are executed quickly at the price seen.
3 would make me feel uncomfortable because it is (apart from dealer spread) a zero sum game between client and dealer. This can't last. Of course, my dislike goes away if I nevertheless always get fast exection at the price seen.
I am speculating that "automatic" and "strategic" hedging (terms used earlier by Prospreads contributor) correspond to 1 and 2 above - maybe Prospreads could confirm?
I am also very interested to hear from Rigordo/other clients with experience of market/immediate execution in very volatile periods.
Finally, I should make clear that I am not considering other order types - limit, stoploss etc nor the issues raised about order priority - which I imagine are more complex.