How does IG make money?

Where does IG’s income come from?

The main way we earn money on our leveraged products – eg spread betting and CFDs – is through the spreads that we wrap around the market price.

The costs of any given trade are factored into the offer (buy) and bid (sell) prices – so you’ll always buy slightly higher than the market price, and sell slightly below it.

If the FTSE 100 is trading at 6545.5 and has a one point spread, for example, it might have an offer price of 6546 and a bid price of 6545.

You might also need to pay some additional fees when trading with us:

• Share CFD commission
• FX conversion fees
• Overnight fees

You can find out all about these on our charges page.

For share dealing, you’ll pay commission when you buy or sell stocks or ETFs. There’s also a quarterly custody fee depending on your trading activity. Share prices are offered in local denominations, and our fee to convert to your chosen base currency is just 0.5%. You can change your currency conversion settings which influences the amount of commission you pay. Our team reviews these changes on a monthly basis, so it may take some time to update your account. Please be aware that changing conversion from 'instant' to 'manual' means that you'll no longer qualify for commission-free trading.

Does IG aim to profit from client losses?

No. Our business model is based on providing individuals with the opportunity to trade the world’s financial markets, in exchange for fair and proportionate transaction fees. It’s a well-known fact that trading successfully is difficult, and most speculative traders tend to lose. However, we don’t typically benefit from trading losses that an unsuccessful client may experience.

Mostly, our clients offset each other’s positions. For example, if client A buys one lot of the DAX and client B sells one lot of the DAX, both sides of the trade are covered. This means we’re not exposed to the profit or loss of either client. Instead, we make our money via the spread (ie the transaction fee) that each client pays to trade.

Sometimes, a large majority of clients will trade in one direction. When this happens, we’ll protect our exposure to risk by hedging in the underlying market. For example, if client A and client B both buy the DAX, we may buy actual DAX futures. This then covers the amount we’ll pay out if both clients are successful.

Resources to assist your trading

We’ve invested in plenty of resources to ensure we offer the right balance of educational tools and personal support for your trading.