IG Markets and HedgeStreet team up

CHICAGO - IG Markets is working with sister company HedgeStreet Exchange to offer US clients standardised products on its platforms by the end of July, say senior officials at the companies.

"HedgeStreet has a wider offering than us. The more products we can offer our US clients, the better the trading experience they will have," said Rod Drown, chief executive at IG Markets in Chicago.

IG Markets currently only enables trading in foreign exchange spot, options and binaries, but within a few months the product range will include standardised versions of these. Traders will be able to buy and sell standardised EUR/USD binary options contracts with a tick value of $0.25 - where every 1/100 pip move in spot either earns or generates a loss of 25 cents.

The partnership will also see IG Markets offer clients a 'spread FX contract', which gives spread-dependant payouts if the spot stays within a pre-defined range. The structure has EUR/USD floor and cap values, and buyers get $1 for every 1 pip that the currency pair is above the floor value at expiry. If spot crosses the cap, buyers get a set amount, but if it drops below the floor, there is no payout. The reverse is the case for the seller of the contract.

"The contract offers upside and downside protection and is similar to a call-spread contract in the traditional options market," said Yossi Beinart, HedgeStreet's chief executive, based in Chicago.

Other products to be added on IG Markets' platform include standardised binaries and options on commodities and indexes. This includes 'binary event contracts', which are all-or-nothing bets on specific macroeconomic events such as central bank rates on designated announcement dates. More currency pairs will be added upon client request, added Beinart.

Integration of the products began in January, and the process is now in testing phase.

The two companies are awaiting regulatory clearance before proceeding with the launch, but Drown is optimistic the products will be on offer by the end of July.