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IG adds far fewer traders as pandemic volatility settles

09/16/2021 | 04:03am EDT

(Reuters) -The number of new clients signing up to trade on IG's platforms dropped by 37% over the past three months, the London-based firm said, while revenues also eased from levels seen last year when the pandemic caused extreme volatility.

The midcap company brought in 27,500 clients in June-August, its fiscal first quarter, compared to 34,600 a year earlier when it saw strong growth as people stuck at home due to pandemic lockdowns tried their luck on the stock market. The number of new traders in June-August last year was more than double the number seen in the same quarter of 2019.

IG, created by spread-betting pioneer Stuart Wheeler in 1974 to let people bet on the price of gold, has 287,200 active clients including those from its recently-acquired U.S. rival tastytrade.

Shares in IG, which have underperformed the wider index this year, were up 5% by 0723 GMT as the company maintained its medium-term targets, unlike rival CMC which cut its profit outlook by up to 80 million pounds ($110.64 million) earlier this month.

IG said its adjusted net trading revenue in June-August, excluding a foreign exchange hedging gain linked to the tastytrade purchase, dropped 4% to 200.9 million pounds.

Financial markets, which saw volatility levels peak in early 2020 when the coronavirus crisis took hold, have settled down this year as vaccination drives and government stimulus steps have calmed investor nerves.

The GameStonk retail trading frenzy on Wall Street, where amateur traders liaised on social media platforms such as Redditt to discuss strategies and invest in beaten-down stocks, has also begun to lose momentum.

The CBOE volatility index, often dubbed Wall Street's fear gauge, has come down to 18 from a peak of 85 last year.

($1 = 0.7231 pounds)

(Reporting by Muvija M and Chris Peters in Bengaluru; Editing by Rashmi Aich and Susan Fenton)

© Reuters 2021
Stocks mentioned in the article
ChangeLast1st jan.
CMC MARKETS PLC -3.13% 263 Delayed Quote.-30.56%
IG PORT, INC. 0.06% 1715 End-of-day quote.23.83%
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