IG Finance, in the context of online trading and investment, refers to the financial services offered by IG, a global company providing access to a wide range of financial markets. It’s important to understand that “IG Finance” isn’t a standalone entity, but rather a convenient shorthand for the financial products and services accessible through the IG platform.
At its core, IG empowers individuals and institutions to trade and invest in various markets without directly owning the underlying assets. This is primarily achieved through derivative products. Key offerings include:
- Contracts for Difference (CFDs): CFDs are a popular derivative allowing traders to speculate on the price movements of assets like stocks, indices, forex, commodities, and cryptocurrencies. Users don’t own the asset itself; instead, they enter into a contract to exchange the difference in price between the opening and closing of the trade. CFDs offer leverage, which can amplify both potential profits and losses.
- Spread Betting: Similar to CFDs, spread betting allows users to speculate on price movements without owning the underlying asset. The main difference is that profits and losses are calculated per point movement, and in the UK and Ireland, spread betting profits are often tax-free. Like CFDs, spread betting also utilizes leverage.
- Share Dealing: While IG primarily focuses on derivatives, it also offers traditional share dealing, allowing users to buy and hold actual shares in publicly listed companies. This is more of a long-term investment strategy compared to the short-term speculation often associated with CFDs and spread betting.
- Options Trading: IG provides access to options trading, where users can buy or sell contracts that give them the right, but not the obligation, to buy or sell an asset at a specific price on or before a specific date. Options can be used for hedging, speculation, or generating income.
- Turbo24s: These are listed, limited-risk securities that allow trading on indices, forex and commodities. They have a built-in knockout level, limiting the potential losses.
The IG platform is designed to provide users with access to real-time market data, charting tools, and news feeds to inform their trading decisions. They also offer educational resources, including webinars, articles, and courses, to help users understand the complexities of financial markets and improve their trading skills.
Leverage is a prominent feature of IG’s offerings, particularly with CFDs and spread betting. While leverage can magnify potential gains, it’s crucial to understand that it also significantly increases the risk of losses. A small initial deposit can control a large position, meaning losses can exceed the initial investment. Therefore, risk management is paramount when using IG’s services.
In summary, “IG Finance” encompasses the range of trading and investment opportunities provided by IG, primarily through derivative products like CFDs and spread betting, alongside traditional share dealing and options trading. Users gain access to global markets, sophisticated trading tools, and educational resources. However, understanding the risks associated with leverage and implementing effective risk management strategies are essential for success.