Research firm Investment Trends has recently published its 2015 UK Leveraged Trading Report, which monitors the attitudes and investing habits of UK spread betters and CFD/FX traders. The study, based on a survey of more than 11,000 traders and investors, concluded in July 2015.
Key highlights include:
- UK leveraged trader numbers increased during 2015 in the face of the turmoil that followed the Swiss Franc Crisis;
- The study identified new criteria for choosing leveraged product providers, a consequence of the Swiss Franc crisis which benefited market leader IG Group Holdings plc (LON:IGG) in the past year;
- Switching activity grows. Competition will be heated to capture the growing number of traders who are searching for the best offer;
- CMC Markets, OANDA and Saxo Capital Markets receive the highest appraisal from clients.
UK leveraged trader numbers
The study finds that 81,000 unique traders placed at least one financial spread bet in the 12 months to July 2015, up from 78,000 in 2014. The retail CFD and FX markets both expanded, by 4% each.
“The UK leveraged trading market performed well last year compared to other countries,” says Irene Guiamatsia, Senior Analyst at Investment Trends. “Even the January 2015 Swiss franc crisis appears to have done little to dampen this enthusiasm among UK leveraged traders after two years of relative stability in the markets.”
New criteria for choosing leveraged product providers have emerged, a legacy of the Swiss Franc crisis which benefited market leader IG in the past year.
The losses incurred by some providers and the collapse of the UK arm of Alpari following the decision of the Swiss National Bank early this year brought the importance of providers’ financial credentials in focus. Significantly more traders now focus on financial strength and FCA regulation when selecting their leveraged trading provider.
“There has been a real flight to safety among leveraged traders when choosing their provider, even more so among higher value traders,” said Guiamatsia. “Market leader IG was the largest beneficiary from that shift in the past year, registering a significant increase in its market share.”
Switching activity
One in four (25%) FX traders left their leveraged trading provider to shift to another, up from 21% in 2014. The rise in switching activity, in part a result of the demise of Alpari UK, meant switchers were the largest contestable segment for acquisition in the past year. Looking forward, switching is expected to stay high, with 37% of spread betters looking for a new provider relationship. Regarding other segments, 41% of FX traders and 45% of CFD traders indicating they are open to using a new provider in the next 12 months.
CMC Markets, OANDA and Saxo Capital Markets receive accolades on client satisfaction
- CMC Markets received the highest overall satisfaction ratings from their financial spread betting clients, after continuous improvement over a number of years.
- OANDA stayed at the top of client satisfaction ratings among FX traders for the second year running,
- Saxo Capital Markets took the lead among CFD traders.
- Note the good performance of FXCM too.
The following providers received the highest ratings for a number of key service elements:
You can view the report by clicking here.