Investment Trends Report

January 18, 2014Andy No Comments »

Investment Trends is an Australian research firm which has been reporting on the UK’s online trading market for the last five years. Its report for 2013 emphasizes the growth in mobile trading and the continuing dominance of IG Group in the marketplace.

The report is heavy on the numbers, and compares the three trading spectrums of CFDs, spread betting, and Forex. It shows there is little doubt that IG has a strong hold on retail traders, with a slight decrease in market share on financial spread betting and FX, and a slight increase on contracts for difference. This is against a backdrop of a reduced number of active traders from 2012 to 2013.

The report puts the numbers at 93,000 traders for spread betting and CFDs, down from 104,000 in the previous year, and a smaller decrease from 74,000 down to 72,000 in Forex. This is the first time since report started in 2009 that the market has decreased, and it is thought to be mainly caused by a reduction in the number of people taking up online trading, with the number of traders ceasing activity each year remaining about the same.

The UK is by far the largest market examined by Investment Trends, which also reports on trading in Australia, France, Germany, and Singapore. As CFDs and spread betting are not permitted in the United States, this means that the UK clearly remains the leading market in the world for these financial instruments.

The report is based on a survey of 13,185 UK traders so is extrapolated from their answers, but as Investment Trends is experienced in research, I have no problem believing the numbers are correct. It’s interesting to note that IG rebranded itself last year, becoming simply IG rather than separate brands like IG Index and IG Markets. The company felt well enough off to spend several million dollars buying the website domain IG.com, so that bears out the optimistic report.

In fact, as a demonstration of the IG’s dominance in online trading, it was estimated to have 34% of the CFD market, 29% of the FX market, and 41% of the financial spread betting market, and no other provider had as much as 10% in any of those.

An interesting part of the survey is that the company Plus500, which was only founded in 2008, is rising up the charts and number five in the CFD market at 5% (Plus500 specializes in CFDs). Plus500 set itself the goal in 2012 of becoming the number one CFD provider, and it went public in 2013. While it still has a way to go to become number one, it put on a good showing in the last year.

It is great to see that many traders rated their brokers as good or very good, and this is consistent with 2012. It seems that the major players take customer satisfaction very seriously. On that note, 72% of spread betters use their smartphones or tablets for their trading, and this is up nearly 10% on the previous year. What is more, the report states that an additional 12% intend to start using their mobile devices in the coming year.

The providers have made sure that they are competitive in this market, according to Pawel Rockicki, the Senior Analyst at Investment Trends. ‘These days it is not enough to just let clients trade from their mobile or tablet. They want good functionality and all the bells and whistles available on the desktop platform. Brokers have been spending substantial amounts of money investing in mobile capabilities.’

He added that 90% of current “mobile traders” use their device to monitor their open positions, 60% open their positions and 70% close positions on their mobiles, as well as using them to keep up on the news and doing research.

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