CFD providers mirror the market action on the actual exchange. But how good is the mirroring? Do they try to match both the bid-ask prices and the bid-ask sizes exactly? Is it possible that the liquidity provided by CFD be nearly as good as that of the actual exchange?
It depends if you are with a direct market access provider or a market maker.
With direct market access you are basically trading based on the liquidity of the under security.
With a market maker the provider will try to match the liquidity of the underlying in most cases, but may differ from one provider to another.