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During a short period in late January and early February, London-based IG saw an “unprecedented spike in new client demand,” which was largely in response to “heightened news flow relating to certain listed U.S. stocks,” it said in a statement on Thursday.
The comments are the latest example of how the frenzy of interest in heavily-shorted stocks like GameStop Corp (NYSE:GME). by traders stuck at home during the pandemic has upended the retail trading market across the world.
For IG, stock trading is just a small part of the business, accounting for only 6% of its 230 million pounds ($321 million) of revenue in the three months to Feb. 28. The company’s core business is in contract-for-differences, or CFDs, which allow traders to speculate on market movements without owning the underlying securities. IG and a number of peers imposed restrictions on CFDs tied to a certain stocks due to the Reddit-fueled volatility.
IG shares (LON:IGG) were up 4.8% to 850 pence at 9:26 a.m. in London, extending a 12-month rise to about 33% as the retail trading boom continues. IG added 23,900 new over-the-counter leveraged clients in the quarter, up 81% year-on-year. The stock was hit in January, however, as analysts raised concerns over the $1 billion cost of acquiring U.S. derivatives group Tastytrade Inc.
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