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FTSE 250-listed trading platform IG Group (LSE: IGG) is red hot right now. It was warming up nicely when I looked at it in October, and I declared I would buy it the following month, then didn’t.
That was a costly oversight because since then, events have played into IG’s hands.
Markets have been unpredictable again, with Donald Trump’s tariff threats making investors twitchy. But where some see chaos, IG sees opportunity.
This stock loves volatility
Unlike mainstream investing platforms, IG thrives on instability. It specialises in complex instruments such as contracts for difference, spread betting, and derivatives. This means its clients can do well whether markets rise or fall, so long as they’re going somewhere. Ideally, quickly.
That might sound like a high-risk business model, but IG has been in the game for nearly 50 years. It kept dividends going during the pandemic and has a great record of rewarding shareholder loyalty.
It struggled in the first half of 2025, when lack of volatility across a series of asset classes hit profits by more than 20%, forcing the board to cut jobs. Volatility is now back with a vengeance and so are profits.
On 13 March, IG reported that third-quarter revenue rose 12% year on year to £268m due to stronger market activity. Trading revenue climbed 15% to £235.3m, while the number of active clients grew 2% to 272,700.
It also sounded upbeat about the final quarter as “strong market conditions” continued. IG said it expected to meet full-year forecasts of £1.03bn revenue and £494m adjusted pre-tax profit.
Growth, income, and value
On 12 May, another update confirmed that it was on course “to exceed the upper end of consensus forecasts” for the full year, as Trump’s so-called ‘Liberation Day’ tariffs on 2 April sparked another surge in client activity.
The recently acquired Freetrade also appears to be performing well.
Over the past 12 months, the IG share price has climbed 45%, much of that coming since Trump got going. The rally hasn’t made the stock expensive, either. Despite recent gains, shares still trade at a price-to-earnings ratio of just over 12. That looks reasonable to me.
There’s a solid income stream too. The forecast dividend yield is now 4.3%, nicely covered 2.2 times by earnings. Operating margins of 43.3% are forecast to improve further, to 45.1%.
Caution still required
There are risks. Profits jump around depending on client behaviour and market movements. And while IG does a good job bringing in new customers, some inevitably drop out when the reality of leveraged trading kicks in. I dabbled in spread betting myself, and quickly decided it wasn’t for me.
The eight analysts serving up one-year share price forecasts have produced a median target of just 1,263p. If correct, that’s a modest increase of around 12% from today. So the excitement may ebb from here.
Of the eight analysts giving one-year stock ratings, six name IG a Strong Buy. None suggests selling.
After such a strong run, I think the IG share price could slow. But I still think this solid business is worth considering today. I only wish I’d bought it six months ago.
