IG Expert Review: The Original & Still One of the Best Brokers

Is IG a Good Trading Platform?

Yes, IG provides an excellent all-round trading and investing brokerage service. IG pioneered online trading and financial spread betting for private clients and remains not only one of the largest online trading platforms, but also one of the best. IG stands out through deep liquidity, high market range and excellent added value such as trading tools and analysis.

First up, I must disclose that IG is my default broker. When I review brokers, I ask: “Why would you trade here rather than at IG?” It was my first trading account – I’ve had it for about 20 years and I remember the first online trading platform when it was basically a messaging system through to the dealing desk. When I was interning on the NYMEX and IPE trading floors in London and New York as a ticket checking clerk, I’d tap away on IG on my Ericsson R380. Along with Trading Places (my dog is even called Winthorpe #notobsessed) I hold IG accountable for the path my career has taken.

Who is IG?

Stuart Wheeler, IG’s founder, basically invented financial spread betting in the attic of a Chelsea townhouse in 1974. It was first called Investors Gold Index, then IG Index and then just IG. As the product range grows, the name shortens.

His biography (Winning Against the Odds, My Life in Gambling and Politics) makes clear IG was founded for the love of the business (that business being gambling and investing).

One of the things that makes IG stand out is that it’s good at what it does, and seems to want to be the best.

I certainly gathered from my interview with the former IG CEO, June Felix, that the company wants to be on the client’s side, believing it’s better to try to help the client win, and give them good service, so they’re still a client 20 years later, rather than the churn and burn approach.

Index & Forex Trading

IG was one of the first brokers to let private individuals trade the financial markets, and IG clients can now trade a market-leading 80+ indices.

You can also trade forex on the platform. But unlike most other forex brokers, which see the largest percentage of their volumes in the forex markets, IG’s most popular asset class is indices, followed by currency trading.

Quality Service

IG has always taken the view that clients trade with it because of the service it offers, rather than because of any incentives.

No B-Book

One draw for big clients is that whilst IG does internalise orders, it has symmetrical exposure limits, so it doesn’t take a view on the markets. This means that IG is not betting against you with a B-Book. And, if you’re a big trader, because of IG’s liquidity there may actually be bigger volume on IG’s bid and offer than there is in the underlying market. You get positive slippage, so if you place a limit order and the market suddenly moves in your favour you get filled at a better price than your limit.

Spread Betting & CFD Trading

With IG you can trade CFDs or spread bet 24 hours on major indices, forex and commodities markets. There are extended hours on global equities, where some fairly significant volume goes through, particularly on US equities when company announcements are made after the main market shuts.

IG is one of the few brokers to allow trading during the weekend, so you can still take a view or limit your exposure if something big comes out politically.

IG is one of the best CFD trading platforms as it offers a huge range of markets to trade and DMA access for more sophisticated traders. Also, because IG offers CFDs globally (with the exception of the US) it has a huge amount of volume and liquidity meaning that sometimes you can place bigger orders via IG’s order book than you could do on the underlying exchanges like the LSE or NYSE. Because of the sheer volume of CFD trades, IG is able to internally match up orders for quicker and larger fills.

One key disadvantage of trading CFDs through IG is that you have to pay tax on profits. However, CFDs are not the only product that IG offers. You can also trade financial spread bets, where you do not have to pay capital gains tax on profits as this is classed as gambling.

IPO Grey Market

One feature that’s now unique to IG (lots of other brokers used to do it) is the “grey market”, where it will offer you a price in unquoted stocks that are due to come to market. You essentially take a bet on what the market cap will be of a company when it lists. Or you can just apply for shares in the IPO through PrimaryBid, which will deliver them to your IG account.

Global Differences

IG is good at knowing what customers in each region want. The UK, for example, is the only country that is offered financial spread betting, and the rest of the world trades on margin with CFDs. That’s with the exception of the Americans, who trade on margin by taking out a loan to buy stock (from their broker) or trade options, which are much more popular on equities. Japan has knockouts and Europe has barrier options and Turbos Warrants.

What Does the Trading Platform & App Look Like?

IG’s trading platform is DIY online, but still with phone support if you need it.

IG is keen to push its added value; the platform tries to integrate as much as possible. IGTV is based on the platform analytics of what people are trading, and IG creates programmes around what markets and assets traders are looking for information on. The news and analysis comes from Reuters, with snapshot videos and a series of IG market commentary videos.

We rate IG’s trading app as extremely safe because of IG’s regulation and reputation. However, it’s important to note that while trading on the app itself is financially secure, the products on offer are high risk and IG does offer investments that are not safe for capital preservation. IG offers financial spread betting and CFDs which are high risk, potentially high reward products.

High Net Worth Accounts

If you are a high-volume trader, you can also trade DMA with ProRealTime, and you can get level 2 pricing and trade directly on the exchange order book. This can be done on the IG trading app or by downloading the L2 dealer software. There is a cost, of course, but if you do a few trades that is rebated back. Brokers have to pay the exchanges for providing level 2 data to their clients, so the charge is there to dissuade everyone signing up without trading. If you are really clever and have developed your own trading algorithm, you can plug that into IG’s platform too. Or MT4/MT5 which it also offers, if you’re into that sort of thing.

Sticky Clients

A problem all brokers are desperate to address is people losing money. It’s always been the case that only around 20% of people made money.  A few brokers have implemented post-trade analytics, to help their clients try and win more. IG’s Trade Analytics tool does just that. Its sole purpose is to try and help traders win more by getting a better understanding of where they profit and lose in the markets. It’s been developed in-house by IG, based on analytics and to provide clarity.

James Perry, a former IG Client Experience Manager, told me “We desperately want our clients to win, as the more they win, the longer they are going to be a client, and the more they are going to trade.” And the more commission IG will make.

I know this to be true from my own trading, when you’re on a winning run you trade more, and when you can’t call the market right you step away until another day.

Investing, ETFs & Share Dealing

IG also offers longer-term investing products, where you can buy and hold stocks, ETFs and funds in a stocks and shares ISA, or IG Smart Portfolio. It has a trading academy so you can learn through video and interactive courses. IG can see from its analytics that clients that use these become better traders. IG bought DAILY FX (for $40m) and offers live webinars to provide analysis and trading strategy.

You can invest and trade ETFs with IG. You have the option of either investing in the long term by buying ETFs in the general investment account, SIPP or ISA. Or you can speculate on them going up or down by going long or short via CFDs or financial spread bets.

IG is not the cheapest place for investing in ETFs, (that is probably Interactive Brokers) but it does have very good customer service and is a really easy-to-use ETF platform.

Ratings Explained

• Pricing: Industry leading spreads and with DMA you can get inside the bid/offer.
• Market Access: Best around for spread betting and CFD trading.
• Platform & Apps: Loads of added value, signals and execution features.
• Customer Service: IG is very big, but still managed to score well here.
• Research & Analysis: Superb, news, analysis, social feeds, plus free premium subscriptions for active clients.

Overall, if you are going to trade, I would be surprised if you didn’t have an account with IG.