Spread Betting at IG Index

IG Index is an international market maker in financial derivatives such as spread betting and CFDs, offering traders and investors the ability to trade on over 7000 stocks and shares listed on global markets, along with indices, forex, commodities and treasuries. IG Index is part of IG Group (IGG.L), which employs more than 800 people and has offices in 14 countries worldwide. As an established member of the FTSE 250, IG has a market capitalisation of over £1.6bn (August 2012). The ‘Investment Trends 2009 UK Spread Betting and CFD Report’ listed IG Markets as the largest single provider of CFD accounts in the United Kingdom.

IG Index is a well-known name in the spread betting community, and for good reason. It sets a standard to which most other brokers aspire. It has been around since 1974, making it the longest established spread betting firm, and in research by Investment Trends it came first for the trading platform, choice of markets, charting facilities, and range of orders. It is also the 2010 Spread Betting Provider of the Year in What Investment magazine, and has received other accolades from the industry in the past.

Tradable markets
Stocks: UK, US, European, Asian and International Shares.
Indices: UK (including sectors), US, European, Chinese, Asian Stock Indices.
Currencies: All Major Currency Pairs, including Scandinavian and Australasian and Exotic Currency Crosses.
Commodities: Oil, Gold, Grains and a wide range of other Engergies, Metals and Commodities.
Options: Call and Put Options on Shares, Indices, Interest Rates and Currencies.
House Prices: Trade On The UK House-Price Index.
Binary Bets & Bungee Bets (exclusive to IG).

What’s their pitch? IG Index has been responsible for pioneering several types of financial spread betting products, including the innovative Binary and Bungee Bets, which offer clients yes/no and bounceback propositions. All this is available on its PureDeal trading platform which features Price Improvement technology and one-click dealing.

Anything for newbies? If you are new to spread betting make sure to enlist in the TradeSense programme from IG. This is made up of 6 training modules and designed to be worked through during your initial first 6 weeks as a client. What is particularly good about it (apart from the training modules) is that it allows you to trade at 50% of the normal minimum trade sizes for the initial two weeks to try your hand without putting too much money at risk.

IG offers two types of account: the Limited Risk Account will cost a few points in terms of the spread, but it means you’ll have risk management in place and won’t lose more than your deposit. The Plus Account has tighter spreads and options on order types including Limited Risk orders and Trailing Stops.

Seminars on spread betting available: Wide range of seminars predominantly in London. Good archive of online seminars as well as webinars hosted by chief market strategist David Jones covering trends in the financial markets and educating traders via questions and answers sessions.  Seminars introduce attendees to Spread Betting and the IG trading platform ‘PureDeal’. More advanced seminars are available for existing clients.

Guides: IG Index offers new clients a decent spread betting guide called ‘TradeSense’. One of the main attactions of trade-sense is that it allows you to trade from as little as 10p per point for your first two weeks of trading, 20p for the following two weeks and the up to 50p per point. This gives you a great chance to get comfortable with spread betting without having to risk larger amounts of money if the market moves against you. In addition, you get to work your way around the live platform and charts whilst putting some of your trading capital to use thus helping traders move away from the sometimes easy decisions of demo account trading.

Credit spread betting accounts available?: Yes, but available only to UK clients and cannot be opened online. Also requires evidence of funds (£5000 min).

Limited Risk Accounts: Yes. Limited risk spread betting IG account available

Research & charting tools available: Reuters news, technical commentaries on equity, index, fixed income, forex and commodities markets provided by Trading Central. Excellent charting developed by IT-Finance, gives users the ability to drag and drop opening and closing orders (i.e. trade from the chart) with the new ‘DealThru’ charts. (Hint – IG Index provides a specific ‘charting seminar’). IG clients are able to deal directly off a chart which can show important trading information such as price target and stop loss levels. Level 2 Market Data also available while Autochartist, a pattern-recognition tool automatically scans a trader’s chosen markets for technical chart patterns.

Downsides: Only downside is that occasionally they limit some options – for example I couldn’t short Ocado stock the other day as they were up to their borrowing limit. I don’t like their frequent adoption of the £5 minimum £s Per Point (when combined with their frequent minimum Guaranteed Stop Loss of 12.5% for many shares). I also feel that sometimes they freeze their platforms momentarily in certain market conditions. As far as quoting smaller caps go I only had an issue once where they don’t deal, but they said the company was too small and not liquid enough, so I thought fair enough, in that case not sure I want to be there – I believe they will quote companies up to 10 million market valuation. Not so long ago IG Index have increased their margins via a tapered margin system…but if you can’t control your own margin/risk then it’s simple don’t touch spread betting with a barge pole and for that matters don’t T trade as you will lose a lot of money. But in general no major complaints although I don’t like the way that instead of requotes they hold the order for a few seconds and I don`t get the option to cancel.

Update on Downsides (August 2014): IG – not too happy with them any more. Faultless platform – but higher margins now, bigger minimum positions required, wider spreads, far fewer guaranteed stops allowed, less shorting allowed. All imo. I don’t really care, as I hardly use them. But, seems a retrograde step and a pity.

We give IG Index a Rating of: 4.5 for range of markets, margins, spread sizes and general client satisfaction. They have simply the best and most sophisticated spread betting platform of all the major UK providers.

Spread Betting Beginner: ‘I read the first batch of IG Index’s TradeSense stuff (emailed pdf) Sunday and Monday evening. Today was just getting a feel for how it all works, will be taking it carefully one step at a time but the 10p per point does make life easier. My plan is to visualize the 10ps as either £1s or £10s when making my decisions just to give me an idea as to how fat things can move if they go against you. I have also (almost finished) been reading ‘The Financial Spread Betting Handbook’ by Malcolm Pryor which I have found a useful read.’

You can trade with IG Index over the Internet or even via your mobile phone/PDA. IG offer a number of trading platforms allowing traders and investors investors fast and inexpensive access to over 7,000 financial products worldwide, from index to share and oil to gold. The divisions of IG Group include -:

• IG Index: IG’s flagship financial spread betting brand, offering a wide range of markets including indices, stocks, forex and commodities.
• IG Markets: Contracts for Difference (CFDs) in the United Kingdom, Europe, US, Australasia and the Far East.
• Nadex: a retail-orientated US exchange.
• FXOnline: Commission-free forex trading and CFD provider in Japan.

IG Index initially setup shop as a financial spread-betting bookie, originally offering spreads on gold futures, hence its name. IG Group now is a world-leading provider of financial spread betting and CFDs with headquarters in London and offices across Europe, the US, Japan, Singapore and Australia. They have over 120,000 clients globally and handle millions of transactions each month.

IG Index Trading Platform Reviewed

When spread betting, apart from having tight spreads the most important aspect is the usability of the trading platform. IG Index offer a browser-based trading platform called PureDeal. A version is also available for the iPhone and mobile phones. It offers live streaming news from Reuters, research and technical analysis, and real-time charts from which you can enter trades directly.

The interface is customizable, and you can click and drag the windows to your preferred arrangement. The charting package is comprehensive, including many technical indicators and providing the facility for back testing your strategies. There is even a pattern recognition tool that will alert you to the opportunities when particular chart patterns occur. IG’s DealThru Charting facility is so sophisticated that it even allows you to place trades direct from a plotted chart. This means that you can enter your orders, stops and limits all while you are checking technical levels on an IG Index’s chart – with the opening, stop and limit being displayed as horizontal lines displaying how far they are from the spot price.

Some of these features are only available on the Plus Account, which is the regular spread betting account; the Limited Risk Account, which is designed for beginners and helps them limit their exposure to risk, wisely misses out some of the more advanced features which could only confuse.

IG’s charts through IT-Finance are pretty good – you can have multiple timeframes open and at the click of a button all charts changed to a new instrument – although it took a while to work out how to get it how I wanted it! My experience is that their prices and charts are quite good. Not exact, but extremely close to the underlying market for the exchange-traded markets – slippage is rare and it goes both ways.

Recently,  I have discovered IG Index’s Advanced Charts  and trade by chart.  Wow, where have you been all my (trading) life!  I can place a trade, stop or limit directly on the chart and drag them up and down to where I want them.  Fantastic and revolutionised my trading!

In a further effort to help beginners, IG Index also offer the TradeSense training package for those who are new to spread betting. This programme is made up of six training modules which are designed to be worked during your first six weeks as a client. In addition to providing six practical training modules which include such topics as using orders to deal, leverage and margin, risk attitude, financial markets and trading discipline, membership of this program also allows novices to bet only 10 pence per point for the first two weeks, in order to limit losses. Over the course of the first six weeks this amount rises gradually, until after six weeks the spread better is required to pay the standard minimum of £1 per point. The possibility to open small spread bets is quite useful and helps you to overcome the fear of placing your first spread trade. A demo account may familiarise your with a trading platform but it doesn’t tell you anything about the the psychology of trading.

Of course, as well as being of assistance to the novice, this helps IG Index sign up more real money accounts. Given the competitive spreads and the easy-to-use platform, once people start trading with IG Index they are quite likely to continue and it’s estimated that 50% of the active spread traders in the UK have an account with IG Index. IG is helpful in providing training for beginners. There are several sets of online videos which cover the basics of spread betting, using the PureDeal platform, applying technical analysis and strategies, and other types of market such as Forex and options. The company runs regional and office seminars covering the basics, for those who learn better face to face.

There are two types of trading account on offer, one of them designed for beginners. The regular account is called a Plus Account, and promises the tightest spreads and flexibility, including trailing stop orders. This account allows you to lose more than your initial deposit if you hang on to a losing position. The Limited Risk Account is designed for the novice, has wider spreads, but has built-in risk management which means you cannot lose more than your initial deposit. With IG Index, you do not need to send any money to open an account However, if you are applying for a ‘Credit Account’, you should send evidence of funds, as described in the Application Form.

Why choose IG Index? IG Index is one of the premier Online CFD Brokers/spread betting firms in the United Kingdom

Their unbeatable package includes PureDeal, a huge range of markets and highly competitive spreads. There are a number of other compelling reasons to go with IG Index -:

• Recognised market leader – In a survey by Investment Trends last year, most spread bettors reported reliability as one of the most critical factors in choosing a provider. The same survey showed that almost 60% of the country’s active financial spread betting population have an account with IG Index, and 88% of all respondents rated PureDeal as ‘good’ or ‘very good’.
• Pure Deal Platform – cutting edge technology with Direct Market Access & Price Improvement system, whereby IG passes on a better price to their clients if it becomes available while the client order is being executed and – unlike some other providers they claim to never fill a client order at a worse price than that requested by the client. IG Index also sources prices from and route execution for equities into Multi-lateral Trading Facilities, allowing their clients to benefit from greater liquidity and narrower market spreads as a result.
• Trading platform also available on your mobile or iPhone. IG invests heavily on technology having 40 people just working on its mobile platforms. IG is rumoured to have spent some £23.5m to develop its mobile platforms for Apple, BlackBerry and Android-based devices
• Live Prices – the IG Index website shows real-time live prices for thousands of markets. You can trade on any of these streaming prices at the click of a button. IG Group itself declared in its annual statement that in May 2011, 99.93% of internet deals were automatically processed, with no human intervention and no requotes. At peak load in that month IG were processing 347 client orders per second.
• Account Information – You can check your account details online, including second-by-second valuations of all your open positions.
• News, Research and Charts – Free access to data, charts and analysis from award-winning sources, and a live market news feed.
• Full range of Markets
• More market orders, including Trailing Stop Losses – You can place a wide range of orders to open and close positions based on future market movements.
• Tight spreads
• Low commission – 0.1% commission on UK blue-chip shares.
• Low Deposits
• Risk Management including email alerts for when you need to top-up your margin.
• Free SMS, sound or e-mail alerts so that you are alerted when a market hits a pre-determined level.
• Client Money Protection
• Complete flexibility – deal by telephone, online, or on a wide range of mobile phones.

In any case if you’re looking for a wide range of markets, IG Index probably has the largest range available, with about 10,000 different financial instruments listed. This means that it covers small-cap shares, and many worldwide shares. While trying to trade too many different markets may mean that you do not get expert at any of them, it is nice to have such a wide choice of markets for your initial selection.

Additionally, the PureDeal platform connects to multiple trade execution venues to help ensure that clients get the best possible quotes. The system is setup to source the best prices (best selling and buy prices) which in practice means that the best buying or selling price might originate from two completely different venues. This increases the available liquidity and narrows the on exchange spreads. IGIndex also offer binaries and custom bets allowing clients to make money even in periods of low market volatility. Binary bets are essentially a simple yes/no bet, and therefore more akin to gambling than financial spread betting. For instance, you can bet on whether the FTSE 100 will move up or down by the end of the day, and you win a set amount if you’re right, or you lose all you bet if not. These can be very short term in nature covering, say, the next few minutes to a medium term perspective over the next few weeks or so. Custom bets on the other hand are fixed odds bets that permit clients even more control. For instance, a client may choose to place a bet that makes £500 if the FTSE is just 5 points higher than it is at the moment, in 90 minutes.

IG Index offers great margin rates and competitive bid-offer spreads which are not associated with an equivalent cut in features, as IG Index still offers extensive charting and research options as well as dynamic trading which is normally reserved to higher-cost platforms. For straightforward 250 stocks I personally think they are one of the best although if you want guaranteed stops etc. you do pay for it. They are generally more user friendly and their trading and payments platforms beat everyone else I’ve used as does their telephone customer service.

While IG Index do not offer a free demo account with which to practice spread betting, you can open an account without funding it in order to play around and try out the PureDeal platform. IG Index is one of the industry leading spread betting providers, and as a FTSE 250 company with almost 40 years trading history in the sector, IG Index enables traders and investors to trade with confidence and it is well worth including on your shortlist if you are currently considering opening an account.

IG Index Insight: IG has recently launched a new platform dubbed as IG Index Insight which basically allows clients to get a feel for how other clients are trading particular markets. The interface is now even easier to use with each market in your watchlist having a quick link to pertinent news, chart and insight section that shows how other clients are currently trading it.

According to a company’s spokesman IG’S INSIGHT CENTRE allows one to:

• Access unique market insight: See how over 140,000 IG clients are dealing on the markets – including whether they’re going long or short on your chosen asset.
• Identify potential deals: Use interactive charts and pattern-recognition technology to analyse and predict current and future trends.
• Keep your finger on the pulse: Access breaking Reuters news, expert market analysis, and live updates from the IG dealing floor.
• Identify game-changing economic events: Plan your strategy around major market triggers using IG’s detailed economic calendar.
• Develop your dealing strategy: Inform your future decisions by keeping notes on positions you’ve opened.

How insightful is it though? Out of 10 people 9 may be short at £1/point and 1 person long at £10000/point. IG would tell you 90% are short. If we know that the majority of their accounts lose money, regardless of size, does it hold any value as a contrarian indicator of what the “average retail investor” is thinking? If over 78% of IG’s clients need convincing that the trend is upwards, does that mean there is still significant room for people to be taken out? But then most traders don’t lose because their stock picks are inherently wrong. If it’s down to bad position management, running losers and cutting winners, then the majority of people could still be right on the direction of their bets but still be losing money. In short insight doesn’t give enough info to make an analysis!

Another thing IG Insight gives us no insight into is traders’ time frames, nobody knows whether the herd are trading from the 3 min or daily. Two traders can be trading in opposite directions on the same instrument and both can exit with a profit. In any case I’d generally be happier going against the IG crowd than with it, knowing that 80%+ of clients lose 90% of their accounts in 90 days. Index punting will be a large portion of that I’d guess.

IG trade positions by matching a buyer with a seller so if i was long the Dax £100pp they might match me with 20 people short the Dax at £5pp,it would be more of an insight if we knew the size of positions something like £500k long Dax £300k short, to me that would tell me a lot more than just what a % of the positions are directed, and anyway what I want to know is what are 90% thinking of shorting this market, in short insight doesn’t give enough info to make an analysis!

Mobile Trading: Yes! IG’s mobile apps repertoire is especially strong and includes applications for the Android, BlackBerry and Windows 7 phones along with the iPad and iPhone – apparently the company has as many as 20 IT people working on their various apps. The PureDeal mobile platforms allows spread traders to sign up for an account using their mobile device as well as open, close and edit existing positions and orders. Traders can also use the mobile version of PureDeal to view (charts) and change chart settings. In June 2011 almost 14% of all client–initiated deals were done using mobile devices; around 30% of IG’s active clients used mobile devices to place some of their trades; and over 10% of account applications are made using mobile devices.

Just to get things into perspective, in the last market update, IG Group declared that nearly 40 people work on IG’s mobile platforms alone, which the group noted was ‘a level of investment which few of our competitors can match’. You can use the applications to open and close trades as well as the placing of stops and limits to manage trading positions. The mobile trading apps also come with a customisable charting package with numerous technical indicators and a live news feed from Thomson Reuters. In practice about a third of IG’s active clients presently use mobile devices to place some of their trades, while more than a tenth of account applications are made using these gadgets.

I use IG and find the app very useful particularly when away from a computer – it is definitely sufficient be able to trade in the spread account. For myself I’ve spread bet profitably (albeit in a small account) for over 3 years now with IG Index. I’d say they are trustworthy competent, very fast platform.

Your aggregate position in this market will be margined in the following tiers:

Tier Position Size (GBP): Deposit Factor

• 0 – 100: 25.0%
• 100 – 600: 40.0%
• 600 – 2100: 75.0%
• 2100+: 75.0%

All in all IG Index is a great site with extended trading hours, but with a minimum bet of £1/point on the Wall Street Index it is a bit expensive to start as a beginner – although admittedly if you are a beginner you could always take the TradeSense training package and bet from just just 10 pence per point for the first few weeks. In any case it is very easy to operate. Recommended.