Trading on inflation
Inflation is one of the most heavily discussed economic metrics in financial markets. Discover how to trade inflation using our US Inflation Index.
Start trading today. Call +44 (20) 7633 5430, or email sales.en@ig.com to talk about opening a trading account. We’re here 24/5.
Contact us: +44 (20) 7633 5430
Start trading today. Call +44 (20) 7633 5430, or email sales.en@ig.com to talk about opening a trading account. We’re here 24/5.
Contact us: +44 (20) 7633 5430
What is inflation and why should you trade it?
Inflation is, essentially, the increase in the price of products and services in an economy – it’s measured using a consumer price index (CPI). Keeping inflation levels down is typically the responsibility of a central bank, such as the US Federal Reserve or an equivalent body. Inflationary changes can have a huge impact on the value of a currency, consumers’ purchasing power and banks’ monetary policies.
US inflation is set to be a hot topic for the year ahead as the long-term effects of the pandemic continue to play out and the Federal Reserve looks to pull their key policy levers to manage inflation targets throughout 2022.
By trading our US Inflation Index you can speculate directly on the movement of the inflation, or you can trade inflation as a hedging strategy against assets impacted by it, such as stocks and bonds. Hedging is the act of strategically placing trades so that a profit or a loss in one position, is offset by changes to the value of another.
How to trade inflation
You can now get exposure to US inflation with our unique US Inflation Index, which you won’t find anywhere else. With us, you’ll take a position using a CFD, which means you can go long or short and trade on leverage.
Go long or short
Trade on leverage
Get tax benefits1
When trading CFDs, you’ll never take ownership of an asset, and will instead take a position on the price of the index rising or falling in value. Learn more about how to manage your risk.
To trade inflation with us, follow these steps:
1. Learn about trading on inflation
2. Open a CFD trading account
3. Search for the US Inflation Index
4. Select your deal size and take steps to manage your risk
5. Open your position
Our inflation indices
Our US Inflation Index contains a selection of TIPS ETFs that have a correlation with our 5-year US inflation-linked bond yields, a commonly used benchmark for forward-looking inflation expectations. The index is provided by BITA and priced according to the weight of its constituents.
| INXG | 45%* |
| VGOV | 20%* |
| IGLT | 15%* |
| GLTS | 15%* |
| IUKP | 5%* |
* Figures are approximate
Our US Inflation Index contains five TIPS ETFs. The current index composition is:
| TIP | 20%* |
| SCHP | 20%* |
| VTIP | 20%* |
| STIP | 20%* |
| SPIP | 20%* |
* Figures are approximate and subject to change.
Why trade inflation with us?
Trade the movements of the only US inflation index in the world
Get direct exposure to US inflation rates
Trade key ETFs that benchmark inflation with a single position
Get the best execution on your trades with our industry-leading tech
Open a trading position with spreads from just 1 point
Trade with the No.1 CFD provider*
Costs and charges
- CFD trading costs
CFD trading is a form of leveraged trading.
Margin |
Minimum margin requirement of 20% for retail clients trading the US Inflation Index |
Spread |
From 1 point on the inflation indices. We don’t attach our own spread to share CFDs |
Overnight funding |
Overnight funding applies to positions held overnight on cash (spot) positions only. Forwards do not incur overnight funding charges. Learn more about overnight fees |
Open an account now
Open an account now
Fast execution on a huge range of markets
Enjoy flexible access to more than 17,000 global markets, with reliable execution
Deal seamlessly, wherever you are
Trade on the move with our natively designed, award-winning trading app
Feel secure with a trusted provider
We have over 45 years of experience offering a truly market-leading service
*IG Group’s total markets
Open an account now
Open an account now
Fast execution on a huge range of markets
Enjoy flexible access to more than 17,000 global markets, with reliable execution
Deal seamlessly, wherever you are
Trade on the move with our natively designed, award-winning trading app
Feel secure with a trusted provider
We have over 45 years of experience offering a truly market-leading service
*IG Group’s total markets
Trade inflation on a live account
You can open an account with us in three steps.
Fill in our online form
Answer a few questions about your trading experience
Wait for approval
We’ll verify your identity before processing your application
Fund your account
Start trading or continue practising on a risk-free demo account
FAQ
How can I trade on inflation?
You can trade on inflation with us thanks to our unique inflation indices – a first, which you won’t find anywhere else. You can trade both UK and US inflation with a single position. Our inflation indices track benchmark gilt and TIPS ETFs listed on major exchanges.
To get started, open a spread betting or CFD trading account. You can use both to trade our inflation indices on leverage, which means you only need to put down a deposit to open your position. You’ll still get exposure to the full value of the trade – and profits and losses will be based on this amount, not your deposit.
It’s very important to note that trading is a high-risk activity. Your losses can significantly outweigh your deposit, as well as any profits that you make along the way. So, while trading gilt and TIPS ETFs give you possible inflation protection, the risk of losing money is still high. Always take care to manage your risk using our in-platform tools.
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*Based on revenue excluding FX (published financial statements, October 2021).
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