IG Group in spread betting accessibility drive
IG Group is a FTSE-250 company with a stock market valuation of £2.1 billion. It has nearly 140,000 clients, which is close to half of all the spread bettors in the UK. Brands2Life will be tasked with giving a simpler explanation of how spread betting works. The plan is to make IG Group’s services more attractive to people who had previously seen spread betting as too complex.
Brands2Life’s Guy Corbet said, “While spread betting may not be for everyone, many people have misconceptions about what is involved. We will be trying to aid in the demystifying of those misconceptions at the same time as showing that IG is one of the UK’s most forward-thinking companies.”
Spread betting involves placing a bet on whether a particular value will be higher or lower than a given spread. IG allow their customers to bet on currencies, shares, indices and commodities – see http://www.ig.com/uk/spread-betting. In the UK spread betting is taxed in the same way as other forms of gambling rather than being taxed like an investment. The gains from spread betting are therefore normally exempt from Capital Gains Tax.
A further attraction for spread bettors is that IG, like most spread betting companies, doesn’t charge commission. Instead it makes a profit from the spread between the price below which people bet a given stock/currency pair/etc. will fall and the price above which people bet the same stock/currency pair/etc. will rise.
As an example, if someone bets £50 per point on a commodity’s price increasing over 125p and it increases by 25 points to 150p then he will receive £1,250. Conversely, if the share drops by 50 points to 75p then he will lose £2,500. The ability to lose more than the original stake leads spread bettors to set stop losses that automatically sell their stake when the commodity they are betting on reaches a certain value. In this way they can limit their potential losses.
Commenting on the appointment of Brands2Life, IG Group’s Ali Hine said, “We were dazzled with Brands2Life’s handle on our business and the market. Working with them will help us to demonstrate the scope of products that make trading easily accessible to a breadth of different people and that we are the natural option for anyone looking to trade.”