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More online traders betting on options and futures, IG says

IG Group reports slower rise in interim profit as market volatility eases
IG Group reports slower rise in interim profit as market volatility eases   -   Copyright  Thomson Reuters 2022
By Reuters

By Sinchita Mitra

– Online traders are increasingly turning to options and futures amid high stock prices, dealing platform IG Group said on Thursday, as an easing in market volatility slowed its half-yearly profit growth.

Chief Executive June Felix also told Reuters that more people were trying their hand at other asset classes such as oil and other commodities.

While client activity and trading volumes have eased from highs seen during the peak of the COVID-19 pandemic, retail investors flush with savings are still looking to make money.

“People are getting more self directed, in terms of taking control of their own money, the people are younger, the platforms are better, there is a sense that they want to control their own destiny,” Felix said.

Amid concerns over the bets being taken by some individuals, IG withdrew a number of riskier equities products in February last year after a buying frenzy of so-called “meme stocks” triggered huge swings in some share prices.

Felix said options and futures were popular among younger traders, and IG had seen in the last three years a 44% jump in client activity around options and futures in the U.S. market, versus 18% growth in equity trading over the same period.

Options volumes soared 32.2% to a record 9.87 billion contracts in 2021, data from Options Clearing Corp showed.

The S&P 500 index, which tracks the biggest U.S. stocks, gained roughly 27% in value in 2021, but has slipped about 9% since.

IG was created by spread-betting pioneer Stuart Wheeler in 1974 to let people bet on the price of gold.

The London-listed group posted an 8% rise in pretax profit to 245.2 million pounds ($329.2 million) for the six months ended November, compared with 227.8 million pounds a year earlier, sending its shares more than 5% higher by 1010 GMT.

($1 = 0.7448 pounds)