Spread betting firm backing a winner on market volatility
Spread betting firm IG Group enjoyed a record month in August as punters flocked to take advantage of huge swings in stock markets and currencies.
Revenues surged by 26% to £100m in the quarter that ended last month with the number of active clients rising by a fifth and the average amount spent by each customer up by 8%.
Stock markets have fluctuated in recent weeks due to concerns over eurozone debts, a US double-dip recession and global growth fears generally.
IG, whose customers bet on which way markets, exchange rates and commodities will move, said business grew in June, July and August and is up again above normal levels in September.
The group's UK arm saw revenues jump by more than a fifth to £51.8m, though activity at the Australian and European offices was more frenetic with revenues over 50% higher in both areas to £17m and £19.2m respectively.
Singapore saw a huge surge in activity by its existing customers, with the average amount wagered up by 61%, though the number of active clients only rose by 3%.
Japan was the one weak spot with revenues a third lower at £4.4m due to the imposition of new trading restrictions.
Profit margins eased back towards levels seen last year due to marketing and IT spending, but overall the firm remains "confident" on its prospects.
Financial spread betting involves taking a punt on movements in the stock market. Unlike fixed odd betting, where the stake and the potential losses or gains are known in advance, with spread betting the profits or losses are not known until after the stock has moved. In essence, the amount you can make is limitless, as is the amount you can lose, although most spread betters insist punters have a big enough deposit to cover potential losses.