October 5, 2026
Bonus Content: IG Group Lost a Quarter of Its Value. The Retention Problem Is Theirs Alone.
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IG Group Lost a Quarter of Its Value. The Retention Problem Is Theirs Alone.
Hey there, bargain hunter. On Friday, October 2, 2026, one trading update hit three share prices. Only one of those companies had a problem.
Scoreboard
IG Group expects total revenue of approximately £240 million for Q3 2026, representing a year-on-year decline of around 14%. Shares fell by roughly a quarter at one point in the session. CMC Markets was dragged down with it, falling sharply intraday before recovering by the close. Plus500 also dropped hard early before recovering.
What Actually Happened
The damage at IG is not a customer story. It is a retention story.
The distinction between customer activity and reported revenue is important: although OTC net trading revenue fell approximately 18% year-on-year to about £155 million, OTC customer income actually increased by around 8%.
Organic first trades increased by more than 25%, while the number of active customers rose approximately 17%.
So customers arrived, traded more, and generated more gross activity. IG just kept less of it.
Think of OTC retention as how much revenue IG keeps from client trades after offsets like hedging and pricing. If that rate falls from 80% to 70%, the same level of customer trading can generate meaningfully less revenue, even before you factor in slower activity.
Within OTC derivatives, revenue retention in the quarter was around 70%, below the around 80% averaged since the introduction of market-making optimisation measures in the second half of 2025. IG said it remains confident that these measures will structurally increase OTC revenue retention over the medium to long term, albeit with greater expected short-term variability. That last clause is the one doing the work here: “greater short-term variability” is exactly what Q3 delivered.
Why Plus500 and CMC Were Unfairly Punished
CMC Markets was affected by the news despite the warning being related to IG’s profitability, not to overall customer numbers or activity. The read-across was a market reflex, not a fundamental conclusion.
Plus500 confirmed it continues to trade in line with current market expectations for FY 2026 and maintains a strong cash position. Plus500 then took the unusual step of issuing its own mid-day statement after the IG read-across hit the sector. Cavendish, which rates the stock a buy with a 4,490p target, expected investors to take the update well, given worries about read-across from IG.
At CMC, the response was more personal. CMC founder and CEO Lord Peter Cruddas bought approximately £139,000 of shares on Friday and told the board he intends to make further purchases, with intended market buys totalling up to £5 million including Friday’s transaction. Skin in the game, documented in a regulatory filing.
Is IG Cheap Now?
One broker note said the revised outlook was substantially below previous guidance of 10% to 15% growth and below what the market had been expecting. The combination of lower revenue and weaker margins could drive material downgrades to 2026 EBITDA forecasts.
IG forecasts an underlying EBITDA margin in the low-40% range for 2026. That is still a profitable business. But the 70% retention figure is unresolved: if it drifts lower, so does every forecast.
Bull / Base / Bear
- Bull: Retention snaps back above 80% in Q4. Customer growth at 17% compounds into 2027. Underdog, which generated approximately $105 million of net revenue in Q3, more than double the comparable period, becomes a genuine earnings contributor.
- Base: Retention stabilises at 70-75%. Mid-single-digit FY26 revenue growth is delivered. A lower-multiple stock earns its yield and waits.
- Bear: The market-making optimisation never recovers to 80%. Consensus downgrades continue. The Underdog acquisition adds integration risk without near-term earnings lift.
Action Plan
For IG: the stock is not obviously cheap on restructured estimates. Wait for the full Q3 update later in October before sizing up. A small starter position at current levels captures the yield while you gather evidence. Do not average down ahead of that update.
For Plus500 and CMC: both dips look like collateral damage. Plus500 ended H1 2026 with about $861 million in cash and cash equivalents and has previously described around $550 million of required regulatory and risk management capital, implying substantial surplus capital. CMC has its founder buying. Neither issued a warning. Both deserve to trade back toward pre-Friday levels once the IG situation is clarified.
Cheap Investor Scorecard
- IG Q3 OTC retention: 70% (target: back above 75% in Q4)
- IG FY26 revenue growth guidance: mid-single digits (was 10-15%)
- IG EBITDA margin guidance: low-40% range
- Plus500 FY26 trading status: in line, full Q3 update due later in October
- Cruddas purchase: about £139,000 executed, up to £5 million intended
- IG active customer growth: +17% year-on-year
- IG first trades growth: +25% year-on-year
- Underdog Q3 net revenue: about $105 million, more than doubled
Bottom Line
If IG’s market-making changes restore retention to 80% by mid-2027, Friday’s crash looks like an overreaction and the stock is a recovery candidate at a single-digit multiple. If retention stays depressed, the guidance cut is just the first act. For Plus500 and CMC, the selloff was borrowed fear. Both need their own Q3 data to close that argument, but the early signals point to companies that were punished for a problem they do not have.
