A reader asks: Can I trade AIM stocks with IG?
The short answer is yes you can trade AIM (Alternative Investment Market) stocks through IG.
The main advantage of trading AIM stocks via spread betting with IG is that the profits are tax-free. This is particularly relevant as AIM stocks are less liquid than main market stocks and there more volatile. Also, companies on AIM are less established than the firms listed on the larger stock exchanges, meaning there is more potential for growth.
However, there are downsides to trading AIM stocks through IG, or other spread betting brokers.
The main downside is that you have to deal at the broker’s bid/offer rather than the straight through the market. As AIM stocks are less liquid than large-cap stocks, the bid/offer spread is often wider.
If you are buying or selling AIM stocks through a traditional stockbroker, you can request a quote on their online platforms and a market maker may give you a better price inside the spread. If you have a large order you can also give your broker a call and they can have a little ring around to see if there is any cheap stock going. Often illiquid AIM stocks will have resting sell orders with market makers than are not shown on the screens.
One other thing to consider is that if you are planning on holding an AIM spread bet or CFD position for a while the financing costs can add up.
IG also has stock brokerage accounts, so if you would rather pay in full for the AIM stock, then you can use an IG investment account to buy and hold AIM shares with IG.
Richard founded the Good Money Guide (previously Good Broker Guide) in 2015 and has been a broker for 20 years most recently at Investors Intelligence and previously a multi-asset derivatives broker at MF Global (Man Financial). Richard started his career working as a private client stockbroker at Walker Crips and Phillip Securities (now King and Shaxson) after interning on the NYMEX oil trading floor in New York and London IPE in 2001 & 2000.