Volatility in global markets is a boost for IG

Spread bet firm IG Group has seen record levels of activity in the past few weeks as stock markets, shares and commodities have swung wildly.

The group, whose customers bet on which way markets, share prices and commodity prices will move, said the trading boom had taken place despite it being the holiday season in most countries where it operates.

The frenetic trading has sent revenues in excess of £94 million for the quarter ending August, 19 per cent higher than the £79.1m generated in the same period a year ago.

The market roller coaster over the past month has been driven by fear over the impact of the eurozone debt crisis and the possibility of the US economy grinding to a halt.

Costs have been kept in line with expectations, while the group is also keeping a tight rein on its customers who bet the wrong way.

IG said its credit management processes have proved robust and bad debts for the quarter will be less than 1 per cent of revenues despite the rapid swings up and down.

European authorities have banned short-selling of financial stocks in Belgium, France, Italy and Spain for 15 days to try to calm the activity, but markets remain very nervous with rumours continuing to drive sentiment.

Commodity prices have also been very active, also good news for IG and other spread bet firms.

Gold hit a new all-time high recently of over $1,880 per ounce, while oil has been weak due to fears over the global economic outlook.

IG shares jumped 4 per cent to value the group at £1.5 billion.