Ig Share Discussion Threads

[deanroberthunt] 08/12/2016 14:53

thought he was busy with a little heavy oiler in Kansas?

[lydnem] 08/12/2016 14:44

its been a long time since buffoon chris oil aka undervalued assets, made a profit.!! He is now an expert in making losses!!!!

[finess] 08/12/2016 14:37

Many times I have logged on early in the morning looking at the JPY/USD or AUD/JPY thinking I would have a tidy profit , only to find I had been stopped out with either a spike up or spike down. If stop losses are in place you do preserve your stake.
The whole system requires a good understanding of the risks involved and few do understand the leverage.

Took my profit on my average at £475 and now waiting to clear my initial £5.24 purchase.

[undervaluedassets] 08/12/2016 14:36

hmm not true.

Maybe other outfits do that - IG do not (Which is why they have not blown up)

When I was caning it with Ig a few years back they used to take me out for lunch. (they want their clients to win and make a fuss of winners)

Longs and shorts are netted off one against tother and the net long or short exposure to IG is hedged elsewhere.

other outfits who do not do this come unstuck

[deanroberthunt] 08/12/2016 14:27

nearly time to add a few more....

[diggedy2] 08/12/2016 13:44

dangersimpson

the idea that IG does not trade against their clients is effectively a fallacy.

The reason why they 'make the spread' is because they take on all the risk from the clients. Over the course of time the effective profit is 'the spread' because IG is the market maker in all instances and they have huge numbers of clients trading in both direction. Eventually the average is the spread

IG is rather better at it than the competition simply because they are bigger and will rarely ever have to go into the market and hedge.

A better way to look at the profits supplied by IG is to see that they report a £400m profit with client inflow of £490m but the total client money on deposit only goes up by 100m

Virtually all of IG's profits are client losses. Indeed the 'average' loss per client at IG is actually slightly higher than the industry average.

So whilst the FCA might look kindly on IG for their regulatory strength they are exactly the type of company in their rifle sights.

[deanroberthunt] 08/12/2016 13:30

all short term noise, fear and bluster that will ultimately come to little wrt to IG Group.

[deanroberthunt] 08/12/2016 13:29

590p target and what is imvho a harsh revenue slash, considering it's just a consultation paper which in itself isn't likely to progress until the back end of 2017 at the earliest....

[deanroberthunt] 08/12/2016 13:24

buy IG sell CMCX is it's view

[undervaluedassets] 08/12/2016 13:21

buy from Numis it would seem.

[dangersimpson2] 08/12/2016 13:12

Unlike a lot of other SB firms IG don't trade against clients. They make all their money on the spread. So people taking smaller positions due to increased margin positions may have a short term impact on volume but since these traders are far more likely to be successful when they are not over-leveraged they will make more trades in the long run. Some other SB firms want to attract the type of clients who lose all their money so they can take the other side of their trades. They are incentivised to encourage high leverage as a means of wiping out client positions. IG wants traders to be successful so they maximise the volume that those traders execute and capture the spread on that volume.

This is why I think the drop for IG is overdone but the drop for some other companies may not be high enough to reflect the new regulatory environment.

[weemonkey] 08/12/2016 12:39

The big players never use all their margin anyway.

That is precisely what wipes you out - big or small

Numis articulating alot of what has been said here:

www.proactiveinvestors.co.uk/companies/news/170184

[bolador] 08/12/2016 12:29

deanroberthunt,

Oh well they will have to think something else up to help placate the FCA ! Perhaps more novices could be persuaded to use guaranteed stop losses and hang on to their GBP2400 a bit longer.

[tsmith2] 08/12/2016 12:20

What's too stop IG opening up through those very jurisdictions? Wouldn't take long at all and could simply transfer accounts if they really wanted to - not least when the clients seen v happy with IG's service..Any changes not until back end of next year too - so plenty of time 40% fall ridiculous imo

[diggedy2] 08/12/2016 12:13

I am sorry to annoy everyone but I actually worked (really) for one of the big spread betting companies. So I know rather more about where the revenue comes from than others on this thread.

It might be noticeable that there is no leap into buying from the senior management (director buying).

if you look at the minimum funds required to place a bet. As of now on IG you can place a £1 bet on the EUR/USD with £54 quid in your account. When the FCA rules come in a beginner (i.e. the majority of new accounts) will require £428 for the same risk.

i.e 8 times more money.

Whilst a few clients may deposit more cash the reality is that
a) fewer people will bother
b) those that do bother will trade in sizes far smaller than they did before.

Spread betting/cfd companies make money because clients run their losses and take their profits ... in the end the average client just gets into a position that starts losing .. they do not cut it.. and it eventually wipes out their trading resources.

This is unlikely to change for the majority BUT it will take far, far longer for each client to actually lose AND with the increased margins the probablity is that a far larger number of clients will actually start to win as they will have enough margin to support losing positions... giving the market time to turn in their favour.

People are also ignoring the fact the FCA wants a prominent risk warning placed on the site and in the application process (like Cigarette packets) stating that 82% of clients lose money .

What do you think that will do to the applicant numbers?

This is a very, very bad initiative from the FCA.

IG are slightly different to most of the SB companies in that a few years ago they stated that 50% of their revenue came from just 1% of their clients. But in those days clients could be designated as 'professional' or 'retail'. Now nearly all clients are designated as retail (and I believe that IG made a statement a while ago that they had designated all clients as retail) so the new margins will be attributable to all.

IG makes a profit of around £2,400 per client, if I remember correctly, but the majority of clients (the 99%) will be in the £500 to £1000 bracket. The new rules will make this revenue stream harder to maintain.

But more importantly ... If IG has to apportion the new margins to the 1% of heavy hitters then these clients may well move their business elsewhere. There are perfectly respectable cfd brokers in Turkey, Malta, Asia who will be more than pleased to pick up the business.

I am not short and never will be but if investors think 40% fall is overdone I think they should think again

[mikeja] 08/12/2016 11:06

Is there any reason they should not just move abroad ?

[deanroberthunt] 08/12/2016 09:40

you can get guaranteed stops on cfd's. you pay a small premium.....

[bolador] 08/12/2016 09:37

If I was going to have a bet about the future of this company I would bet that with its usual ingenuity the City will come up with new products like modified cfds with insured stop losses and all sorts of other weirdo options that entice the usual bold and carefree to have a go. Meanwhile the serious business of providing a high stakes table for the hedgies will continue not much uninterrupted. Buy..

[deanroberthunt] 08/12/2016 08:57

it's all about the BOTs at the moment, doing their HFT antics....pip pip

[weemonkey] 08/12/2016 08:51

Day traders are all over this (and will be for a few weeks) so going to have a high beta for a while

If you are an investor - lots of opps to accumulate

For me it seems obvious - for all the reasons spelt out above - IG will ultimately benefit from proposals

[kmann] 08/12/2016 08:02

Agree, all the above. BUY 700p

[deanroberthunt] 08/12/2016 07:49

ostensibly, Tuesday allowed you to forward accumulate 4 years worth of share price gains in a day

[undervaluedassets] 08/12/2016 07:43

quite right catsick.

I understood the thinking that had IG hit the most on Monday as IG is the biggest CFD provider in the uk.

What was not properly calculated is that IG has the client base which least needs protection as it is the most experienced and sophisticated. some 80-90% of IG's income comes from 10-20% of the client base; Many of these more sophisticated high net worth individuals will no doubt make representations to the FCA themselves to plead for things to be left more or less as they are.

Also, and perhaps more importantly, The consultation process by the FCA will bring into sharp Focus which CFD providers are playing the game with a straight bat and those that are frankly not

IG has always been scrupulous with its fairness to customers. A year or two down the track I think the biggest winner will be IG as it will attract new accounts as the dodgy practices of it's less scrupulous rivals are revealed

[deanroberthunt] 08/12/2016 07:39

ex div will be around 28.01...9p ish