When IG was founded in 1974, we were the world’s first spread betting firm. Now we’re a global leader in our industry, having won multiple trading and technology awards.1
We provide trading and investment opportunities to people worldwide, and have operations in 19countries across Europe, Africa, Asia-Pacific, the Middle East and North America. Our head office is located in London.
Products that power
We power the pursuit of financial freedom for the ambitious through our versatile trading and investment products.
We’re widely known for our original and core offering – leveraged trading. Traders in the UK and Ireland use our state-of-the-art tech and platforms for spread betting; go-getters in the UK, Europe and many more places trade contracts for difference (CFDs). In fact, we’re the No.1 CFD provider2in the world.
Our clients can access around 19,000 global financial markets including shares, forex, indices, commodities and other instruments via our market-leading platforms and apps that provide lightning-fast and secure execution.
We also have an ever-growing suite of non-leveraged share dealing and wealth-management products, designed to help the financially ambitious no matter what their risk appetite. These longer-term investments are available in the UK, UAE and Australia.
Finally, we have two brands specialising in exchange-traded derivatives: tastyworks in the US and Spectrum Markets in Europe.
CFDs
CFDs are derivative contracts that enable traders to take advantage of short-term changes in an asset’s price without owning the asset itself. Traders can take a position in a financial instrument, ‘buying’ if they think the price will rise or ‘selling’ if they believe it will fall, while only putting down a small percentage of the value of their trade as security – known as trading on margin. This can lead to amplified profits but also magnified losses. Our clients can use tools such as stops and limits to reduce their risk, though, while retail clients automatically have negative-balance protection on their accounts in the UK.3
1. Buy/sell
CFDs are quoted in two prices: the buy price and the sell price.
- The sell price (or bid price) is the price at which you can open a short CFD
- The buy price (or offer price) is the price at which you can open a long CFD
Sell prices will always be slightly lower than the current market price, and buy prices will be slightly higher. The difference between the two prices is knownas the spread.
Most of the time, the cost to open a CFD position is covered in the spread, meaning that buy and sell prices will be adjusted to reflect the cost of making the trade. The exceptions to this are our share CFDs, which aren’t charged via the spread. Instead, our buy and sell prices match the price of the underlying market and we charge a commission to open a position, making the experience more like trading in the underlying market.
2. Deal size
CFDs are traded in standardised contracts (lots). The size of an individual contract varies depending on the underlying asset being traded, often mimicking how that asset is traded on the market.
Silver, for example, is traded on commodity exchanges in lots of 5000 troy ounces, and its equivalent CFD also has a value of 5000 troy ounces. For share CFDs, the contract size usually represents one share in the company you’re trading. So to open a position that mimics buying 500 shares of HSBC, you’d buy 500 HSBC CFD contracts.
This is one way in which CFD trading is more similar to traditional trading than other derivatives like spread bets or options.
3. Duration
Most CFD trades have no fixed expiry – unlike spread bets and options. Instead, traders close a position by placing a trade opposite to the one they opened with. You would close a ‘buy’ position of 500 gold contracts, for instance, by ‘selling’ 500 gold contracts.
If you keep a daily CFD position open past the daily cut-off time (typically 10pm UK time, although this may vary for international markets), you’ll be charged an overnight funding fee. This amount reflects the cost of the capital your provider has, in effect, lent you to open a leveraged trade.
4. Profit and loss
To calculate the profit or loss earned from a CFD trade, you multiply the deal size of the position (total number of contracts) by the value of each contract (expressed per point of movement). You then multiply that figure by the difference in points between the price when you opened the contract and when you closed it.
Profit or loss
=
(no. of contracts x value of each contract)
x (closing price - opening price)
For the full profit or loss calculation of a trade, you’d also subtract any charges or fees you paid. These could be overnight funding charges, commission or guaranteed stop fees.
Say, for instance, you buy 50 FTSE 100 contracts when the buy price is 7500. A single FTSE 100 contract is equal to £10 per point, so for each point of upward movement, you’d make £500, and for each point of downward movement, you’d lose £500 (50 contracts multiplied by £10).
If you sell when the FTSE 100 is trading at 7505, your profit would be £2500
2500 = (50 x 10) x (7505 - 7500)
If you sell when the FTSE 100 is trading at 7497, your loss would be £1500
-1500 = (50 x 10) x (7497 - 7500)
Spread betting
Financial spread betting mirrors many aspects of a CFD; it enables traders to take advantage of changes in an asset’s price without owning the asset itself, and to use the same range of risk-mitigation measures. Available only in the UK and Ireland, it’s a tax-free4 alternative to trading, allowing traders to bet on an asset’s price movements. The size of the win or loss depends on the magnitude and direction of the price movement.
How does spread betting work?
Financial spread betting works using three different components. The spread, which is the charge you pay to open your position, the bet size, which determines the amount of capital you put up, and the bet duration, which dictates how long your position will remain open before it expires. Here’s an introduction to all three:
What is the spread?
The spread is the difference between the buy and sell prices that are wrapped around the underlying market price. The costs of any given trade are factored into these two prices (known as the offer and the bid), so you’ll always buy slightly higher than the market price and sell slightly below it.
If the FTSE 100 is trading at 6545.5 and has a one-point spread, for example, it would have an offer price of 6546 and a bid price of 6545.
The spread in spread betting is the difference between the buy and sell prices.
What is the bet size?
The bet size is the amount you bet per unit of movement of the underlying market. You can choose your bet size, as long as it meets the minimum we accept for that market. Your profit or loss is calculated as the difference between the opening price and the closing price of the market, multiplied by the value of your bet.
We measure the price movements of the underlying market in points. Depending on the liquidity and volatility of your chosen market, a point of movement can represent a pound, a penny or even one-hundredth of a penny. You can find out what a point means for your chosen market on the deal ticket in the IG platform.
If you open a £2-per-point bet on the FTSE 100 and it moves 60 points in your favour, your profit would be £2 x 60 points = £120. If it moved 60 points against you, you would lose £120.
What is the bet duration?
The bet duration is the length of time before your position expires. All spread bets have a fixed timescale, ranging from a day to several years away. You are, however, free to close them at any point before their expiry time, assuming the spread bet is open for trading.
Share dealing, ISAs and SIPPs
We use the same market-leading technology in our online execution-only stock-trading service that powers our leveraged OTC offering. Launched in the UK in 2014 and now available to Australian and UAE Yatırımcılar too, it enables self-directed Yatırımcılar to buy and sell over 12,000 global shares and exchange-traded funds (ETFs) with extremely competitive and transparent transaction fees. UK clients can even choose to trade within a tax-efficient ISA or SIPP wrapper.
IG Smart Portfolios
Launched in 2017 in partnership with BlackRock, the world’s largest asset manager, IG Smart Portfolios is a discretionary managed investment service. We manage and rebalance our Yatırımcılar’ portfolios for the entire lifetime of the investment.5
We set ourselves apart by offering low fees and full transparency on the total cost of ownership. By using our fully online platform – with support from our customer services team when it’s needed – Yatırımcılar get an intuitive interface that helps to power their pursuit of financial freedom.
Our portfolios are constructed from iShares exchange-traded funds (ETFs). These include a blend of commodities, equities and fixed-income assets designed to match the ambitions of any investor. You can take control of your financial goals and build a sophisticated basket of investments online, rather than only choosing specific stocks.
Exchange-traded derivatives
Exchange-traded derivatives are financial contracts traded on a regulated exchange. We give ambitious traders these products under our tastytrade and Spectrum Markets brands.
tastytrade is a high-growth, high-margin online brokerage and investor education platform, with a growing share of the US-listed derivatives market, primarily through options and futures. tastytrade combines fun and entertaining content with deep quantitative and probability-based analysis, offering traders something they’ve never seen before.
Spectrum Markets is our European multilateral trading facility (MTF), launched in 2019. It gives retail Yatırımcılar access to opportunities on global markets 24-hours a day through a powerful exchange – all with limited risk. Before we launched Spectrum Markets, there was a sizeable and well-established market for turbo warrants and other exchange-traded derivatives, and we’re already successfully taking on the challenge of conquering that market.