IG Markets

Submitted by Share Trading on 29 January, 2010 - 15:55

IG Markets, part of IG Group, was the first company to offer CFDs in Australia, expanding their UK-based operations to the Australian market in 2002. The Australian operations now account for around 10 per cent of the group’s turnover. IG Markets has at least 10,000 private customers in Australia and 75,000 active clients worldwide making more than 1 million transactions a month, over 95% of them online. IG Index is Britain's leading financial spread betting firm, offering prices in a huge range of indices, currencies, commodities and options, as well as thousands of individual shares. Financial spread betting has grown exponentially in the last decade because it offers traders and investors a unique combination of flexibility and speed of execution across a comprehensive range of markets.

IG Index and IG Markets are authorised and regulated by the Financial Services Authority (FSA). IG Markets is a member of the London Stock Exchange (LSE). The group's Australian operations are regulated by the Australian Securities and Investments Commission (ASIC).

IG Markets’ CFD services

IG Markets offers CFD trading on Australian and international shares, foreign exchange, stock indices and other markets like spot metals and energies. IG Market’s standard CFD commission rate is a low 0.1%, with a $1 minimum charge. They also offer a discounted commission for trading large volumes of CFDs. As with other CFD providers, the deposits start at 5% of the CFD on Australian shares, so you have the potential to leverage up to 20 times your initial capital. Of course leveraging to that extent comes with a huge degree of risk.

IG Markets call their stop loss orders Guaranteed Stops and you can use them by paying a service charge starting at 0.3%. Unlike some other CFD providers, IG Markets allows you to change your stop loss order (or Guaranteed Stop) at no extra charge. IG Market’s online platform is free to use, and includes live market data direct from the exchanges.

The company also host open evenings in most of the capital cities that allow new and prospective clients to meet some of the dealers and talk about CFD trading. IG Markets also use incentive promotion such as a free bottle of champagne or investment guide book for referring a friend to open an IG account. Some analysts feel that this kind of practice promotes CFD trading amongst inexperienced investors.

IG Index Spread Betting

IG Index is the spread betting arm of IG Group. Their website features a set of dice rolling across a market data screen, and the caption “the easy way to play the markets.” Spread Betting is a more controversial product than CFDs, being seen as much more akin to gambling than CFD trading. IG Group has been involved in legal disputes about the status of spread betting, including successfully suing the NSW government for defamation over comments about their spread betting advertisements.

Spread bets are defined as a derivative under the Corporations Act. In March 2006 the Victorian supreme court ruled that spread betting was a valid financial service under federal law, and therefore IG do not need to hold a gambling licence in order to offer spread bets. It also means that spread betting at this stage doesn’t benefit from the tax implications of being defined as gambling.

In the UK spread betting is and has been regarded as gambling for around 40 years, and IG in the UK has both a financial services licence and a bookmaker’s licence. The difference between CFDs and spread bets basically rests on the period they last – spread bets have a fixed time limit, whereas CFDs don’t. With spread betting the provider quotes a two-way future price for the security or index and the buyer speculates on whether the price will go up or down over the defined period.

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