UK's IG Group plummets after muted markets force revenue outlook cut 

Oct 2 (Reuters) - Shares of Britain's IG Group plunged more than 27% on Friday after the online trading firm cut its annual revenue forecast due to subdued trading volatility.  

IG Group, like its peers, earns more when volatile markets prompt clients to trade heavily. However, it revamped its hedging strategy in 2025, keeping more trading income from clients in-house by cutting hedging costs, but leaving it more exposed when market conditions calm and clients trade less aggressively.

The company said OTC revenue retention — its share of OTC trading flow it keeps as revenue — slipped to about 70%, against an average of about 80% since the market-making optimisation measures were introduced in the second half of 2025. 

Shares of the FTSE-100 firm were on track to record their biggest fall since December 2016, down 22.4% to 993 pence as of 0958 GMT.

Peer Plus500 was down 5.3% despite saying it was trading in line with the market view for fiscal 2026 and that it maintained a strong cash position. CMC Markets was down 9.1%.

Analysts at RBC Capital Markets also flagged that Underdog's roughly $105 million third-quarter revenue fell short of the $125 million quarterly run rate it averaged in the first half of 2026. IG bought the US prediction markets operator in July this year.

IG now expects 2026 group revenue growth to be in the mid-single-digit percentage range, compared with the previous forecast of 10-15% growth.

Third-quarter revenue is expected to be about £240 million ($316.97 million), down roughly 14%.

($1 = 0.7572 pounds)

(Reporting by Neeshita Beura and Yamini Kalia in Bengaluru; Editing by Sherry Jacob-Phillips and Janane Venkatraman)