IG Review.
Akhilesh Ganti is a forex trading expert who has 20+ years of experience and is directly responsible for all trading, risk, and money management decisions made at ArctosFX LLC. He has earned a bachelor's degree in biochemistry and an MBA from M.S.U., and is also registered commodity trading advisor (CTA).
Updated January 07, 2021.
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Overall Rating.
Fast Facts.
Account Minimum : $250 Fees : Spread cost; Overnight financing costs; Inactivity fees Best for : U.S. Traders.
Disclosure.
Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 81% of retail investor accounts lose money when trading spread bets and CFDs with this provider. You should consider whether you understand how spread bets and CFDs work, and whether you can afford to take the high risk of losing your money. Professional clients can lose more than they deposit. All trading involves risk.
IG Group (IG), founded in 1974 by Stuart Wheeler "as the world’s first spread betting firm," is part of IG Group Holdings Plc, a publicly traded (LSE: IGG) conglomerate that "empowers informed, decisive, adventurous people to access opportunities in financial markets."
With over 178,000 clients across five continents, an extensive product catalog, competitive fees, longstanding business operations, and an excellent industry reputation, it is not surprising that IG is a global leader in online trading and currently ranked as the world's top CFD provider. Given that most established online forex brokers shy away from the U.S. market, due in large part to regulatory requirements, the fact that IG has re-entered this region in 2022 speaks to its commitment to becoming a truly global presence.
IG (U.S.) offers U.S. clients leveraged access to over 80 currency pairs. A well-organized and navigable website with fully disclosed services and fees, intuitive platform offerings, an unwavering dedication to client education, and useful research tools coalesce to make IG a clear threat to the other forex brokers in this region. Investopedia's ranking algorithm factored in these characteristics in recognizing IG as the Best Forex Broker for U.S. Traders in 2022.
Key Takeaways.
Rated our Best Forex Broker for U.S. Traders. IG offers clients access to a wide range of markets, superior research, and comprehensive client education. IG accepts U.S. clients, though only for forex, and is registered with the CFTC (U.S.), NFA (U.S.), and FCA (U.K.).
Who IG Is For.
Globally, IG is for anyone wanting to trade CFDs. In the U.S., it's for clients who want to trade the foreign exchange markets. It's as simple as that. To deliver on this successfully, IG has decided to adopt the time-honored adage, "go big or go home" because, well, it can. Low spread costs, emphases on customer service and education, actionable research, and functional user interfaces make this broker well-suited to compete in the online broker market. The ultimate beneficiary of this increased competition should be the American customer who desires to trade retail FX (unless they're from Arizona or Ohio, where residents are not permitted to open IG accounts).
Extensive range of offerings Accepts U.S. clients Regulated by FCA (U.K.) & CFTC, NFA (U.S.) Emphasis on education and research Offers protection for U.K./E.U. client accounts.
No account protection for U.S. clients No guaranteed stop losses for U.S. clients No copy trading or back-testing integration on IG platform High share-CFD fees.
Pros Explained.
Globally, IG offers clients access to an extensive range of offerings that spans a multitude of asset classes. Clients have access to forex, indices, shares, commodities, cryptocurrencies, bonds, ETFs, options, industry sectors, and interest rates. IG accepts U.S. clients, though only for forex, which enlarges its already considerable global footprint. IG US LLC is registered with the CFTC and a member of the NFA (#0509630). Additionally, both IG Markets Ltd (#195355) and IG Index Ltd (#114059) are authorized and regulated by the FCA in the U.K. These are widely considered to be the preeminent regulatory entities in the world. Simply put, being regulated by a reputable, government-backed agency goes a long way towards establishing the credibility of a firm. Traders accept the risk that is inherent in markets but they would like the peace of mind knowing that their funds are not subject to risks outside of the ones that they are taking, such as counter-party risk. Additionally, U.K./E.U. client funds are held in segregated accounts at Tier 1 banks. IG's educational tools are head and shoulders superior to any of the other online brokers that Investopedia has researched, and its commitment to providing clients with timely and informative research is noteworthy. IG offers "negative balance protection," which has become a fairly important feature that most online brokers are offering these days, for its U.K./E.U. clients. The catalyst was most likely the SNB event of January 15, 2022 that roiled the markets, especially the highly leveraged retail FX market. Plus, IG (U.K.) also offers guaranteed stop loss orders (GSLO) (for an additional charge), which protects the trader from market gap risk.
Cons Explained.
IG does not offer "negative balance protection" for U.S. clients. This means that a client can lose more than their account balance and end up owing money to the broker. IG does not offer guaranteed stop loss orders (GSLO) for U.S. clients. IG does not offer social (copy) trading through its web-based interface. Furthermore, back-testing and automated trading capabilities are only available through third-party applications. IG's fees for trading share CFDs (for U.K. clients) is higher than the industry standard.
Costs.
Globally, IG's costs (spreads, commissions, and fees) are very competitive, and that holds true for U.S clients, as well.
The spread is how IG makes money, specifically through customer trades that "cross" the bid/ask spread. There is a "commission" charge that comes into play when one is trading CFDs, but it is added to either side of the market spread, and there is an actual commission for every share-CFD trade. Additionally, IG (U.K.) charges a premium for guaranteed stop loss orders that kicks in only if that order is triggered, and there are other extras and third-party charges that are clearly documented on the U.K. website.
The minimum spread for the majors on IG's U.S. platforms starts at 0.8 pips, and the advertised average spread ranges between 0.9 (EUR/USD, USD/JPY) to 5.4 (GBP/CAD).
As is the norm in the FX industry, clients will be charged swap fees, using tom-next rates, on positions that they hold overnight, which may be subject to currency conversion charges if they trade in a currency other than the account's base currency. Furthermore, there is an inactivity fee of $12/month if there has been no trading activity for 24 months. There is also a charge of $15 for wire withdrawals. IG provides a transparent and detailed explanation of forex trading costs on its website.
250 units in the base currency is the minimum account deposit globally, which translates to $250 for U.S. accounts and, per CFTC regulations, the highest leverage available to U.S. clients is 50:1. Traders meeting certain volume thresholds are eligible for rebates. There are three rebate tiers, ranging from 5% for at least $100 million in monthly trading volume to 15% for $500+ million in monthly trading volume.
Trade Experience.
Globally, IG offers a variety of platform choices and API interfaces, starting with its proprietary web-based offering that is customizable and easy to navigate. This streamlined trading platform is stable and easy to access from any browser, though IG recommends Google Chrome. There is a simplicity to it, especially the U.S. version, that belies its functionality. There aren't all the bells and whistles that competitor interfaces may offer, but what it lacks in quantity is more than made up for in quality. This, along with the industry standard MT4 (downloadable) platform and functional mobile and tablet applications, comprises IG's entire online offering to the U.S. customer.
U.K. clients can access what their U.S. counterparts can, and can also upgrade to the downloadable, fee-based ProRealTime advanced charting platform, which is free as long as certain modest monthly trading activity requirements are met. Additionally, technologically savvy clients can attach their own software or a Bloomberg terminal through a well-developed API interface.
IG (U.K.) also offers clients with larger accounts the capability of trading CFD shares and forex through L2 Dealer, which provides direct market access (DMA) that bypasses IG's dealing desk. The Forex Direct service on that platform requires that clients have professional designation under ESMA rules. There's no additional charge for this service other than exchange fees.
The web-based IG (U.S.) platform features basic risk management tools, including price alerts and stop losses. It also streams Reuters news, and clients can split charts into multiple time frames to facilitate their trading experience. Autochartist, a third-party signals provider, is integrated into the platform.
The interface offers three basic order types with the option of attaching "take profit" and/or "stop loss" orders to them. What is a bit surprising is that neither "trailing stop loss" nor "guaranteed stop loss" orders are available on the web-based platforms.
Market - The simplest order where a trader signals that their trade request should be executed at the prevailing market rate. Limit - A pending order where the entry is at a predetermined point below or above the prevailing market rate depending on whether it's a buy or sell. The trader also has the option of selecting the expiration time of this order. Stop - A pending order where the entry is at a predetermined point above or below the prevailing market rate depending on whether it's a buy or sell. The trader also has the option of selecting the expiration time of this order.
IG Web Platform.
IG provides home-grown mobile apps for iOS and Android that can also be loaded on tablets. Basic features include customized watchlists, price alerts, and technical charting. The indicator list is adequate but omitted from the menu structure, reducing accessibility. The Trade menu lacks sophisticated conditional orders but U.K. clients can place guaranteed stop losses. All apps lack customization but they offer Face & Touch ID security and are more advanced than the industry standard MT4 mobile app.
The IG Community site has active forums and numerous trade picks through forum entries and blog posts. @IGSquawk on Twitter contains thousands of tweets from IG dealers sharing news and client sentiment. There's no dedicated or third-party social platform and the broker site contains no client positioning data for CFDs, forex, or spread bets. However, IG Client Sentiment at DailyFX.Com provides useful forex positioning data, updated in real-time. It would be beneficial to clients if this information was integrated into the broker site.