IG Group First To Launch CFDs In US
IG Group is plotting expansion in the US after regulators reached a decision that has improved its chances of breaking into a potentially lucrative yet largely untapped market. Although retail investors in the US can trade futures and also engage in various gambling activities, regulators have balked at CFDs. Few individuals have even heard of them. Rather than seeking permission to trade CFDs per se, which are mostly traded over the counter, IG is in effect pursuing a work-around strategy.
The UK-based company wants to use Nadex, a retail-focused online futures exchange in the US it bought in 2007, to facilitate the sort of products for which the company is best known in other markets. In what IG Group says is a key decision, Nadex last week secured regulatory permission from the US Commodity Futures Trading Commission to make various technical changes. That will allow retail investors to trade binary options and spreads on equity index futures, forex and commodities through intermediaries.
IG says that from the clients’ perspective, the products it plans to offer in the US would in many ways be “to all extents and purposes the same as CFDs”, although one key difference is that they will not allow trading in individual stocks.
