IG Profits from Turmoil in Financial Market

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IG Index, a leading spread betting company in the UK, recorded a sharp rise in its profits in the first half. According to company representatives, the key reason behind this profit increase is Europe’s debt crisis driven turmoil in the financial market. IG claims itself to be UK’s biggest spread betting firm. It recorded a 28% rise in its profit. Currently, the company’s profit is at 103.2 million pounds.

The Bigger the Spread Betting Market, the Better the Profit

Spreads betting involves placing bets on the movement of foreign exchange, prices of commodities and stock indices. The bigger the movement in the market, the better is the gain. Traders aim at taking advantage of the current market volatility and making money. Spread betting companies like IG reap the benefits.

According to the chief executive of IG, Tim Howkins, big markets are beneficial for the company and so is heavy flow of news out of Europe. The CBOE Volatility Index reached as high as 48 in August, 2011.

Spread Bettors Badly Hit when Traders cut down Activity

Spread bettors like IG are hit badly when the financial market scenario is not favorable for their clients and they cut down their trading activity. However, the present market scenario had been quite favorable for spread bettors, according to Howkins.

The VIX’s record for this year is quite low compared to last year. However, VIX profits recorded a rise last Friday. The key rivals of IG reported an increase in their half year dividend by 9.5%. The major market rivals of IG include CMC Markets and City Index. Their stakes increased to 5.75 pence per share.

Howkins added that IG is in a strong profit position at present. The revenue earned by the company in December was a little more than what it earned around the same time last year. IG customers were quite busy trading at the beginning of this year.

IG Getting Clients after the Fall of MF Global

IG continued to get clients even after the fall of MF Global, an American trading firm. It was filed last year for bankruptcy protection, Chapter 11.

 

 

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