IG Group to push for continued US business growth via tastytrade

Shortly after electronic trading major IG Group Holdings plc (LON:IGG) announced the completion of its acquisition of tastytrade, the company has updated on its US business plans.

The tastytrade acquisition is a strategic transaction that expands and diversifies the Group’s growth drivers through entry into the world’s largest listed derivatives market, IG Group’s CEO June Felix said today. With an estimated 1.5 million retail traders, the US options and futures market is larger than the global CFD/FX and European turbo markets combined.

The transaction significantly increases the scale and relevance of IG’s existing US businesses through the acquisition of a fast-growing, high-margin brokerage business, tastyworks, that is well-positioned to benefit from the structural growth in self-directed investing in the US listed options and futures market.

On a pro forma IG FY21 basis, tastytrade’s total revenue was £100.6 million, and operating profit was £45.8 million. This was driven by growth in the active client base as a result of continued strong client acquisition, with 129,000 active accounts in the period from 101,800 active clients.

IG CEO June Felix says:

“Looking forward to FY22, our first focus for tastytrade will be to deliver continued growth in the US market. The team will be laser-focused on this and will be seeking to capture market share in the US options market in order to deliver on this expectation”.

Ms Felix noted that there are a number of additional opportunities that IG has identified which it believes will drive further value from the combination of IG and tastytrade.

Firstly IG will be seeking to maximise its share of wallet from its existing US client base across IG US, its retail foreign exchange dealer (RFED), Nadex, DailyFX and tastytrade. The teams will be working closely together to seize opportunities where IG can deliver more from these businesses together than it could individually.

Secondly, IG has a proven track record of geographic expansion having established a presence in 17 countries. IG plans to use this experience, its long-standing regulatory relationships and capabilities in multi-channel marketing to support tastytrade’s international expansion ambitions. “We are evaluating and prioritizing the best markets to target for expansion and initial indications are positive”, Ms Felix said.

Finally, IG will also seek to use its marketing expertise to further develop tastytrade’s search engine optimisation (SEO) activity, adopting the approach that IG has successfully followed across its global website and specifically within its Emerging Markets business. To date, tastytrade has grown at a remarkable speed through informal channels and some social media; bringing IG’s well-developed and sophisticated marketing processes together with tastytrade’s existing skillset will deliver further growth at tastytrade.

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