How 370 investors lost £18m - in minutes A shock move by the Swiss National Bank left a group of Br

Hundreds of investors with Britain’s biggest spread betting firm, IG, say the firm is to blame for losses totalling £18.4m which were racked up in minutes as a result of wild currency swings in January.

Spread betting is an increasingly popular, but highly risky, form of speculating where both gains and losses can vastly exceed the original stake.

The group of 370 IG customers, who wish not to be named, blame the broker’s systems for failing to allow them to “close” or settle their positions before losses grew too large. In the worst case one investor, who had staked less than £10,000, now faces losses of £250,000.

They have complained to the watchdog, the Financial Conduct Authority, and are considering other avenues.

What is spread betting and why is it so risky?

Spread betting allows you to speculate on the price movements of thousands of markets. It is used in sports such as horse racing and football, but increasingly in financial markets covering indices, shares, currencies and commodities. Spread bets allow investors to speculate on price movements, irrespective of whether the markets are rising or falling. Profits are tax free.

Losses and gains can far exceed your original stake, adding to the attraction – and risk. IG, the pioneer spread betting firm, is based in the City of London and has other divisions including a stock broker service.

Source : the telegraph uk