IG Index - What's on offer online -:

IG Index is the largest and longest-running spread betting firm, established since 1974, and offering prices in a huge range of indices, currencies, commodities and options, as well as thousands of individual shares.

Corporate History

IG Index, the original IG Group company, was founded by Stuart Wheeler in 1974. 'IG' originally stood for 'Investors Gold' (this was because IG Index catered to people who wanted to speculate on the gold price but for whom it was difficult to do so because of exchange controls). 'Index' refers to the underlying index upon whose movement the customer speculates (the original index being the price of gold). In 2000 IG Group was floated on the London Stock Exchange. In 2003 the group was de-listed following a management buyout led by Nat le Roux, the current CEO, and backed by CVC Capital Partners. In May 2005, IG Group Holdings plc was floated on the main list of the London Stock Exchange. Since then it has been promoted to become a member of the FTSE 250 and currently has a market capitalisation of around £1 billion.

The business is a spread betting operation that allows its clients to bet on a large range of financial markets, including stock indices, shares, currencies and commodities, and sporting events. IG Index claims to be the world's leading online and offline spread betting firm by both profitability and turnover. The spread betting side of the company is pretty innovative (being one of the first to offer 'binary bets' on a lot of financial markets), and the dealing platform gets updated quite regularly. The Company was the first to offer bets on the FT30 in 1982, the first to offer spread bets on individual shares in 1995 and the first in the UK to offer an online dealing platform.

IGINDEX Today

IG Index is a long established company listed on the London Stock Exchange (as IG Group Holdings plc, IGG.L), valued at about £1.2bn and are the 167th largest listed company in the UK. At present IGIndex enjoys an extremely healthy financial position; as at 30 November 2007, on the latest published balance sheet IG Group had total assets of £833 million, no debt and own cash of £109 million.

General Points (we will strive to keep this review up-to-date)

1. Recently launched the TradeSense six-week training package for those new to spread betting which reduces dealing sizes for new clients. In the first week of the TradeSense programme, clients can bet a minimum of just 10p a point, which rises to 20p by week two. By week five, spread betters can bet 50p a point until week seven, when the course is over and traders are expected to pay the minimum £1 a point for their deals.
2. Initial Account Size can be zero. You can have a credit account with IG (if you show them evidence of sufficient liquid funds) so don't need to have funds on account. Less hassle than having to constantly make margin payments.
3. The IG platform allows you to build up a watchlist of the markets you wish to bet on. The watchlist shows you the real time prices being offered for buy, sell +/- on day...etc Sometimes the price may not exactly match the underlying market, although in my experience IG are always pretty close. If you use quarterly bets the prices drift further away from the daily price as the spread increases to incorporate a financing charge. The additional spread or charge that IG adds to any trade is shown when you click on the deal button in the watchlist.
4. There is no inactivity fee on accounts you can leave money idle in the account for as long as you wish.
5. All stops and limits are based on the MIDDLE price not their bid or offer price.
6. The daily rollover time is 8pm UK time, 2 hours earlier than most other firms.
7. Trailing stops or limits are not offered but you are able to edit your stop whilst the position is open.
8. Stop and limit orders are now based on the bid or offer of IG Index's quotes (as opposed to the market price as they were in the past...)
9. Currently you can spread bet on the average house price in Greater London and the UK. IG Index now offers prices just two quarters ahead, compared with four originally, reason being that it is harder for IG to make a price for longer periods and they are not able to hedge the underlying risk.
10. They offer binary bets. These are starting to be offered by all the spread betting firms now, but IG Index still have a very good range. These are basically bets which can either be right or wrong, e.g. FTSE 100 will be up on the day - this either happens, in which case you win a fixed amount of money, or it goes down, in which case you lose your stake. It's based upon the use of options, but made much more user-friendly. Try it if you want, but it's more like betting to me than investing.

Good Points

1. As I stated above you do not need to deposit funds into your IG Index account to use the full features of the platform! You can just open a limited risk account, which isn't too much hassle, and see the platform for yourself. If you want to trade, call them up and have them upgrade your account to a standard account, register your card details, make a deposit, and trade.
2. IG Index offer lots of small caps (quote prices on nearly all UK stocks with a market capitalisation of over £10 million).
3. Wide range of companies, indices, sporty-stuff and other exotic bet-types. Only spread bet company that handles emerging markets (and not many others even handle iShare futures).
4. Low spreads (0.1%) on major shares (platform -> market list -> UK Major shares and US Major shares).
5. They do lots of far months, e.g. now you can trade March, June, Sept. (some spread betting companies don't offer the Sept far month).
6. IG will allow you to open a March short and a Sept long in the same instrument (CMC do not allow this). You can also do the same for a position which is the same. For instance you could place £5 a point going long in a March contract and £5 a point going short in a March position. To do this, you will have to make sure the 'force open' button is selected on the deal ticket.
7. Like CMC, IG Index offer sector bets on UK shares which are great to avoid the annoying predicament of believing in a group as a whole, yet trading just one stock that happens to underperform against its peers. These can be found on the dealing platform at Indices -> UK Sectors.
8. Reduced margins for the top 20 UK shares which is now just 5%, so a spread bettor wishing to go long on Unilever Plc at 1,612p for £10 per point would pay an initial margin of 5% of 1612 x £10 = £806.
9. Sophisticated online, mobile and PDA platform. IG’s dealing screen is simple, very clear and easy to use/navigate. Overall, a great platform when it works the way it should... Platform works better on faster computers.
10. No charges for credit card deposits unless they reach £1,000 (or equivalent) in one day, in which case an administration fee of 1.75% of the amount deposited that day will be deducted from your account.
11. Interest: IG index offer Libor minus 2 per cent on deposits over £10k and Libor minus 1.5 per cent on deposits over £50k on the funds held on your account that you don't use. However, these are not default options and you need to contact your account manager to negotiate the rate which is variable and dependent on the amount of cash held. The interest is paid on cash less running losses plus running profits. Contact your account manager to discuss the possibility of discounted commissions if you are a frequent trader.
12. IG are open 24 hours a day from when the markets in the Far East start trading (Sunday evenings London time) through to when the New York Stock Exchange shuts (Friday 9pm London time).
13. IG Index accept rolling cash bets without expiry dates (not all companies support this), allowing you to refresh a position (without incurring a new spread) for a small daily charge. Effectively a rollover charge is a concession as it is cheaper for the client to use a roll over rather than close out a position and then re-open it the next day. An example for you of a rollover concession on a bet on the FTSE with a guaranteed stop is: close at official closing price and re-open with 1 extra point spread.
14. IG Index have launched a new platform dubbed PureDeal which is no longer Java-based, making it easier for people to access. Clients using the new platform can choose whether they view price in the ‘Pairs’ format – how real traders view prices – or in the current way they are presented in the firm’s existing platform. Tim Hughes head of sales trading at the company says that the PureDeal platform includes a price improvement technology. ‘One of the checks that every trade goes through compares the selected trade with the current market level at the time that we receive the order. If it is outside a certain range, such as in a fast-moving market, for instance, the trade is automatically rejected. PureDeal will, when the market movement favours the client, accept the trade at the improved price rather than rejecting it. No other spread betting firm does this,’ he says. A comment on IG’s price improvement - I suppose it is better than being filled at the original price but this is a big claim we will have to see in the coming months whether IG Index lives to its promises. An analogy would be when you get foreign currency to go abroad and they shout "we buy your unused currency back off you for ZERO commission"...yeah right, you don't charge me any commission but your buy back exchange rate is enough to make me projectile vomit over your cubicle… I feel it would be much better if they simply reduced their spreads!
15. Good Customer Service - I used to email them quite often in my early days as a client of theirs, and they were always excellent in their response.

Bad Points

1. They usually do not have the best spreads but they make a market in more companies than the rest so sometimes I use them. For the bigger cap stuff there are definitely narrower spreads out there...
2. No virtual "play" trading account.
3. May only let you have a controlled risk account (instead of the ordinary one), the controlled risk account comes with increased spreads. However, the limited risk (i.e. controlled risk) account isn't much good. Unless you are trading shares or commodities, you don't really need a guaranteed stop, which is a form of insurance (which you pay through the nose for). You can still use a GSO when required on a Standard Account. On a Limited Risk account, you must use it each time, which is ridiculous for indices or currencies which are liquid enough. If you don't qualify for a Standard Account, try elsewhere…
4. Platform unstable during news times or times of high volume meaning you could get caught up in a negative wave without having access to your position.
5. Recently increased the deposit requirements on certain shares, for instance IMG is a favourite of mine, IG have raised the deposit from 10% to 25%. The margins on most banking shares have been increased with some volatile ones like Anglo Irish and Alliance & Leicester to 15%. Margins on commodities have also been increased somehow due to wild fluctuations in prices. In any case it does look as though all firms are upping their margins at the present time.
6. Even if a stock is listed on the IG site as being a acceptable SHORT it may not be accepted by IG. Also, do not forewarn you if they are unable to accept any further bets on a particular stock (this is normal but its annoying to find out that you can’t deal...). Happens usually with small cap but ruins your mental capacity before a trade.
7. Looking at margin requirements, you need a lot more margin for IG trades (than for CMC for instance). It reduces if you place stops, but you still need to keep more money in the account to cover the trades. I take income, rather than upping my stakes, but have to leave quite a bit more in the IG every time.
8. Reports of clients put on manual execution.
9. Fills on stops and limits can take ages to come through (e.g. 5 minutes). But they do say that as long as their quote touched that price then that's the price you get.
10. You can get substantial slippage in a fast moving market, primarily because if between you clicking a price and it getting filled the price has moved, then it takes you to a new screen saying 'sorry but...', and by the time you get back to the trade screen you've missed out. Note though that slippage can also occur on a limit order whereby you would obtain a more favourable place.
11. The spread charge for using a guaranteed stop varies depending on what market it is one is betting on but isn't what one can refer to as 'cheap'. For example the guaranteed stop spread charge for betting on the daily FTSE is 4 points while the guaranteed stop spread charge for betting on GBP/USD is 18 points. Check the online dealing handbook to view all their spreads: http://www.igindex.co.uk/content/files/dealing_handbook.pdf
12. I'd like more transparency up-front on each trade in terms of minimum/maximum bet size and minimum stop loss distance. I've had lots of trades rejected because I miscalculate these.

Generalities

IG is one of the leading suppliers of speculative investment products to retail and professional investors here in the United Kingdom, and in Australia whilst expanding its footprint into Spain, Germany, France, Singapore and the United States. Arguably IG Groups' main rival is CMC Markets, which is number two in the UK, and is market leader in Australia.

Two years ago the company was on average, opening 650 U.K. spread betting accounts and 350 CFD accounts worldwide per month. Both figures have increased progressively and over the last quarter it averaged more than 1,900 spread betting accounts and around 1,400 CFD accounts opened per month. In the six months to Nov. 30, 2007 IG Group recruited 10,100 financial spread betting clients in its U.K. business, up almost 100% on the corresponding period last year.

In December the company completed its acquisition of HedgeStreet Inc, which is a U.S. exchange regulated by the Commodity Futures Trading Commission ("CFTC"). The first step in the development of that business will be to re-open the exchange with its existing, relatively limited, offering of binary options.

'Market volatility undoubtedly played a part in the growth that we have seen in the last six months,' Chief Executive Officer Tim Howkins said in the statement. IG is opening about three times more new accounts for so-called spread bets every month on average compared with two years ago, he said.

Sales have tripled in four years as IG has signed up more customers in Britain, its main market, expanded elsewhere and taken more online bets. Financial-market bets generate 93 percent of revenue, and the rest comes from sports wagers, the CEO said.

IG's average customer is a professional male aged between 35 and 45 who typically spends about 250 pounds per trade, giving control over about 5,000 pounds worth of shares because of leverage, according to Howkins. Most clients are not traders, who are barred from making bets by workplace compliance rules, he said.

Regulation

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).

Verdict: IG Index are fine (at least for modest size, even if not the best spreads), a good platform (I notice in IG's annual accounts that they spend an absolute fortune on new IT equipment and support) and a nice easy combination of finance and sports.

If you are located in the UK you can request a free no obligations brochure from some leading spread betting companies and the products and services they offer by clicking here

Please note that here we are only giving an account of our experiences and readers comments/contributions, please do not take this as advice to open/close/avoid any firms - your experience might be different! Send us your comments by filling in the form below.

Comments	Date
By Marti	2008-04-22 12:30:03
New to the SB field and still pitching small and slow as I learn. Changed to IG from CMC as the CMC software was just too confusing and added too great a risk of error. Excellent CS with most queries answered quickly except the issue of a clash with Trend AV (skip the Quick Charts - Use advanced) Trade Sense was basic, even for a total beginner.
By Mario	2008-04-13 09:06:42
IG Index and IG Markets have the best customer service of all the Spreadbetting compnaies i've used much better then CMC. Their platform and dealing lines are very good. overall i think the best broker around for CFD and SB.
By Jay	2008-04-12 20:26:46
Lovely system, but messers working there. They never bothered to send me the TradeSence after 2 requests, and they wouldn't give me a standard account after i showed twice what they require in the bank, even though it says clearly that you don't have to show proof of any funds unless you're looking for a credit account. Plenty of other firms that don't talk rubbish.
By Daniel	2008-03-10 17:26:10
they have good spreads for index trading but wider spreads and largish margin requirements for stocks - one advantage is the web platform although you do of course need to beware of 'keyloggers' if not using your own pc.
By Ian	2008-03-04 04:46:09
I use IG. It's a server based system so you can access it from anywhere. No need for funds, as far as I know, but very good graphs and indicators. Only downside is that when everyone's in a rush to trade it becomes obscurely slow (probably programmeed to protect IG's cash flow!).
By Shanil	2008-02-18 17:49:23
My personal experience of IG index has been poor. I feel that their Customer Service policy is that they acknowledge your concerns but they don’t care. There have been a number of occasions where they have adjusted my opening price to my detriment and have not suitable informed me. They also need to formulate a better margining policy for option trading such as call spreads, put spreads risk reducing trades but are penalised by charging margin on both legs.
By Dave	2008-02-15 16:14:51
IG Index is good for shares as they offer trading on smaller market cap companies. I used to get the ‘Trading Central’ Technical advice/recommendations from IG which were excellent. It was a bit like an upmarket trader Tom that worked. Gave good buy sell guidance on a range of shares, currencies and index...overall if you have IG I would stick with it.
By Jim	2008-01-19 08:45:44
I.G...good platform for indices, open for 24 hours, pays interest on your balance (not much), very quick execution even on a large volume. Fixed +/- 0.1% spread in FTSE 100 shares.

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