As the largest Australian forex broker, IG Markets is Australia’s largest retail CFD brokerage firm with a range of markets, low CFD trading brokerage, a range of forex trading platforms and positive reviews from those new to CFD trading and experienced forex traders.
In this guide, we review the company’s CFD brokerage services for Australians updated on 15/01/2021.
For Australian CFDs traders, IG is considered one of the top brokerage options. The broker has been operating in Australia for over 15 years. The following IG markets CFD trading review focuses on the key features offered by IG, costs and customer service.
One of the things that set IG apart is the impressive diversity of different underlying assets it offers traders the opportunity to trade as CFDs. In addition to the usual lineup of shares, indices, Forex and commodities, IG CFD trading let traders open positions on cryptocurrencies, bonds and even ETFs. Below is a basic overview of some products in major categories. Because of IG’s large asset list, however, these examples are far from comprehensive.
One of the main categories in IG CFD trading is shares. CFDs based on individual stocks are often the first category that new traders will enter into if they have previous experience in the traditional markets. Share-based CFDs are, however, great for any trader. A few of the stocks that IG bases CFD products on include:
These are just a tiny sample of the share CFDs that traders can access through IG. In total, the brokerage offers more than 8,000 worldwide shares as CFD products.
Complementing share CFDs are those based on broader stock indices. Though indices and individual shares within them will often move in the same way, an index represents a broader share of the market, giving it somewhat more stability and predictability than an individual stock. Major indices that can be traded with IG CFD trading include:
Moving away from the stock markets, IG also offers derivatives based on commodities. Though they require a somewhat more specialized knowledge base to trade, there is excellent money to be made in commodities trading for those willing to learn how to do it correctly. Often, commodities remain strong and steady in periods of higher stock volatility. Commodities that traders will find on IG include:
Though most CFD brokers do offer at least some commodities, IG offers a more diverse list than most. Agricultural commodities, for example, are less often included than precious metals. For traders who plan to work heavily with commodities, therefore, IG is a leading option.
Like almost all brokers including Saxo Capital Markets, IG provides considerable offerings in the Forex, or foreign exchange, category. Traders working in this market trade on the comparative value of pairs of international currencies. Since fluctuations are always occurring between the currencies of the world, there is always money to be made in Forex. Some currency pairs available on IG are:
Keep in mind when selecting currency pairs to trade that not all of them work in the same ways. More stable world reserve currencies, like the USD and the GBP, tend to be less volatile, leading to less risk in trades but also lower potential rewards. Highly volatile currencies, like the JPY, offer larger profits, but can also be quite risky under certain conditions. The best pairs for you when CFD trading in Australia will depend on your risk tolerance level and personal trading style.
IG CFD trading is somewhat unusual in that it offers traders access to bond market CFDs. In the traditional markets, bonds are prized for their reliability and relatively low volatility, a trait that carries over into trading them as CFDs. Though the selection of bonds isn’t huge, it does offer another facet of trading that few other major brokers and best CFD brokers do. Bonds that can be traded through IG include:
Rounding out the list are ETF CFDs. ETFs, or exchange-traded funds, are large trading funds, often built on indices, that are themselves traded on the open market. In more traditional investment, ETFs are usually used as tools for retirement and savings investment. As discussed in our what is CFDs page, they offer more short-term potential as CFDs. Though ETFs will probably not be a major component of your trading, having them available is useful as a means of diversification.
IG Markets Limited is ASIC regulated holding the Australian Financial Services License 220440. A requirement of this regulation is to for IG markets CFD trading client funds to be segregated in a separate bank account. This ensures that IG doesn’t use your account for hedging purposes. While the bank used isn’t specified by IG, all bank accounts are AA-rates. Another added benefit related to unrealised profits. These are also segregated in a separate providing added security for clients.
In any CFD trading context, leverage is an important component. Few investors have the capital resources necessary to profit from CFDs without leveraging their trades, meaning that the leverage ratios offered by a brokerage will have a direct impact on the risk and reward levels that traders will see. Leverage on IG as discussed in our detailed comparison with easyMarkets varies by an asset but runs around 20:1 on shares, 200:1 on Forex and indices and 50:1 on commodities. Unfortunately, leverage does put IG at a disadvantage to other brokers, which will often offer ratios as high as 500:1 on Forex and indices.
When you open an account with IG, you must select your base currency. Most Australian traders will choose the default, which is the AUD. The minimum deposit is AUD 450 and an inactivity fee is charged if no activity occurs over two years. There are four main funding methods for an account.
Our IG Markets CFD trading review recommends choosing debit cards to minimise brokerage fees while minimising processing times. If you prefer using a Credit Card of PayPal, then other online brokers may be recommended.
IG CFD trading offers traders access to one of the broadest lists of assets available on any brokerage. Despite its somewhat low leverage ratios, traders shouldn’t write IG off their lists. IG has had years of experience in providing traders with excellent service, including share trading. This has made them one of the most reliable and customer-oriented digital brokerages available in the Australian market.
Due to the lower leverage ratios, our IG review also found them a good fit for less risk-tolerant traders, who may not be comfortable with higher leverage in the first place. Like any other decision in the trading world, whether IG CFD trading is right for you will depend heavily on your personal investment preferences.
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You can make money from CFD trading because Contracts for Difference allows retail traders to speculate on both rising and falling markets using leverage. However, due to the risky nature of the CFD instruments, which are leveraged products, most retail traders lose money when trading CFDs.
To better understand the risk involved with CFDs, check our CFD Trading Guide.
IG is considered to be a safe forex broker by all industry standards. IG is the world’s biggest CFD provider with over 17,000 markets, +80 currency pairs, spreads starting from as low as 0.6 pips, industry-leading trading platforms and professional customer support service along with top-rate trading academy.
To better assess IG’s strengths and weakness, check our full review here: IG Markets Review.
USD 300 is the minimum deposit to open a live account at IG. Supported payment methods include debit/credit cards, bank transfer, PayPal and MoneyGram. Your money is kept safe in segregated accounts with tier-one banks so you are protected in case the broker becomes insolvent.
Justin Grossbard has been investing for the past 20 years and writing for the past 10. He co-founded Compare Forex Brokers in 2014 after working with the foreign exchange trading industry for several years. He also founded a number of FinTech and digital startups including Innovate Online and SMS Comparison. Justin holds a Masters Degree and an Honours in Commerce from Monash University. He and his wife Paula live in Melbourne, Australia with his son and Siberian cat. In his spare time, he watches Australian Rules Football and invests on global markets.