IG Group develops stockbroking platform by allowing collateral to be used as trading margin

British electronic trading giant IG Group has launched a collateral service allowing clients to use existing shareholdings on their stockbroking platforms as margin to open new contracts for difference (‘CFDs’) or financial spread bets.

At a time when FX and CFD companies are exploring other asset classes, in particular methods of developing stock trading facilities, IG Group’s new offering means stockbroking clients can use the value of their investment portfolios as margin on over 10,000 markets that IG Group offers, without needing to sell their shares. Clients will be able to use up to 95% of the value of their shares to cover the margin required to fund leveraged trades. This opens up the opportunity for traders to take more active positions or reduce risk without needing extra capital.

For example, if a client holds a longer-term position in a particular equity which has an earnings announcement pending, they can now use a shorter-term leveraged trade to increase or decrease their exposure to the equity, by going long or short, without having to put additional cash on their account to cover the initial deposit.

To open a spread bet or CFD, traders need to put up an initial deposit – a margin which traditionally is paid from cash funds available on the trading account. Now, an IG Group client with a stockbroking account can use their shares as margin to open a spread bet or CFD.

In its interim management statement in March this year, IG Group detailed that despite being at the time in the grip of a global slowdown in volumes, the company was committed to innovation and expansion into new areas. One of which was the corporate decision to obtain a Swiss banking license, a milestone that the company has since passed, and another was to ensure enough resources were committed to technological and product innovation, which led to the launch of the company’s stockbroking platform recently.

The introduction of a collateral service within the new stockbroking platform, and the recent offering of Bitcoin trading which allows clients to trade the price movement of bitcoin without actually owning it,are just a few examples of how the company is continuing to innovate to deliver its aim to become the default choice for active traders.

Tim Howkins, CEO of IG Group, comments, “Throughout 2014 we have taken some significant and exciting steps in expanding our product range. I am proud that after 40 years IG continues to innovate to address the needs of active traders. Our continued investment in technology and focus on improving the experience for traders, has enabled us to launch this new product that we believe sets us further apart from the competition.”

For the official announcement from IG Group, click here.

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