IG booms on GameStop trading frenzy

IG is riding a stock market trading wave as new clients race to bet on “meme” stocks such as AMC and GameStop.

In the last quarter alone the City trading house saw revenues jump 65% to £230 million, with “active” client numbers up 60% to 230,100.

There has been concern that some of these new investors, driven by online chatter on Reddit and other forums, don’t understand the levels of risk they are taking.

IG just bought US broker tastytrade as part of its expansion plans.

CEO June Felix said there has been “an unprecedented spike in new client demand, largely in response to heightened news flow relating to certain listed US stocks”.

At the height of the GameStop saga, IG was forced to halt some client activity as volatility went through the roof.

In January IG spent $1 billion to buy Chicago based tastytrade,its largest ever acquisition. The price was described by analysts as “very punchy”.

Felix added: “The Group is continuing to grow the size of its high quality and loyal client base which represents a long-term asset.”

Not all market observers are sure that the new investors will survive a stock market plunge, with at least some of them highly leveraged.

IG shares today rose 36p to 848p.