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IG Group (IGG) shares sank 23% after it cut its 2026 revenue growth outlook on weaker OTC retention, pulling rivals CMC Markets and Plus500 sharply lower.
- IG Group shares fell about 23% to near 990p on 2 October, the steepest one-day drop since December 2016.
- 2026 revenue growth guidance was cut to mid-single digits from 10-15%; OTC revenue retention slipped to about 70%.
- CMC Markets fell as much as 9% and Plus500 about 5%; Plus500 said it is trading in line with expectations.
Lead
IG Group (LSE: IGG) shares dropped about 23% to roughly 990p on Friday, 2 October 2026, after the FTSE 100 trading platform warned that revenue retention in its core over-the-counter derivatives business had come in well below expectations. Third-quarter revenue is expected at about £240 million, down 14% from a year earlier. The company cut its 2026 revenue growth forecast to the mid-single-digit range, from a prior 10-15% and market expectations near 12%.The fall took the stock to its lowest level since April 2025. It was the worst session for the group in almost ten years.
What Did IG Group Say in Its Trading Update?
IG said third-quarter revenue would land near £240 million because it kept less of its clients' trading income than planned. Revenue retention is the share of client trading revenue a broker holds after hedging its market exposure. In IG's OTC division it fell to about 70%, against an average near 80% since the second half of 2025, when the group changed its market-making and hedging approach.
OTC net trading revenue fell about 18% in the quarter to roughly £155 million. The company also guided to an EBITDA margin in the low 40s for 2026, down from earlier expectations.
Client activity held up. Organic first trades rose about 25%, organic active customers grew about 17%, and OTC customer income climbed about 8%. The shortfall came from how much of that activity turned into retained revenue. Chief Executive Breon Corcoran said growth in first trades and active customers remained strong, and the board said recent structural measures should lift retention over the medium to long term.
Why Did the Market Punish IG So Heavily?
The market punished IG because the warning hit the group's central profit driver and reset the growth path investors had priced in. A 10-15% revenue growth target became mid-single digits in one statement, and the retention figure suggests lower profitability on each pound of client trading.
The 2025 shift toward keeping more trading income in-house raised IG's exposure to client outcomes. Quiet, low-volatility conditions tend to leave that approach with less to capture. Retention is also harder to forecast than customer growth, which weakens the case that strong client acquisition alone will carry earnings.
Brokers trimmed 2026 earnings forecasts by roughly 15-18% on Monday. On that session the shares slipped a further 2% to about 971p. That left them down nearly 25% since the warning and about half from their June peak.
How Did CMC Markets and Plus500 React?
CMC Markets (CMCX) and Plus500 (PLUS) both fell, but by different amounts. CMC Markets dropped as much as 9%, to about 596p, while Plus500 fell about 5% to around 3,252p.
Plus500 moved quickly to separate itself from the read-across. It said it continues to trade in line with current market expectations for fiscal 2026 and pointed to its proprietary risk management framework and its record across market cycles. The smaller fall in its shares reflected that statement.
The sector sell-off rests on a shared exposure. Retail CFD and spread-betting brokers earn most of their income when clients trade actively and the house keeps part of the outcome. Subdued volatility and shifting client behaviour can compress retention at several firms at once. IG's disclosure raised the question of whether the pressure is firm-specific or industry-wide.
What Comes Next for IG Group?
IG's next major disclosure is a strategy update scheduled for 22 October. It is the first chance for management to set out how it intends to restore retention toward the 80% level and to explain the margin path behind the low-40s EBITDA guidance. Details on the group's U.S. expansion and capital allocation are also expected to draw attention.
Third-quarter retention at 70% is the figure the stock now has to move away from. A recovery in market volatility would help, since the structural measures were designed to benefit from active trading. A prolonged quiet spell would test the medium-term retention case.
Outlook
IG Group's guidance cut shows that customer growth does not guarantee revenue growth when retention weakens. The 23% fall marks a sharp reset in expectations for one of Europe's largest retail trading platforms, and it has put Plus500 and CMC Markets under scrutiny. The 22 October strategy update is the next test of whether management can rebuild confidence in the retention outlook.
Mentioned tickers: IGG, CMCX, PLUS
