Shares in contracts for difference (CFD) provider Plus500 jump 6% or 77p to £13.80 following another positive trading update.
The company expects earnings for the year to December 31st to be ‘ahead of current market expectations’ despite tough new rules brought in over the summer.
Analysts have pencilled in sales of around £520 million this year against £315 million last year and Operating Profits of £350 million against £186 million.
New rules slow growth but volatile markets a boon
The European Securities and Markets Authority (ESMA) introduced strict new regulations in August covering the marketing of derivative products such as CFDs to retail investors.
This contributed to a drop in the number of new customers joining Plus500's platform in the third quarter and a drop in average spending compared with last year.
However thanks to new products and a ‘strong operational performance’ the firm raised its profit guidance just over a month ago.
Today’s trading update cites ‘significant market volatility’ in the fourth quarter as another reason for its increased guidance.
As Russ Mould, AJ Bell Investment Director, observes ‘stock market volatility looks like it’s here to stay’.
So far this year the FTSE 100 index has registered a daily move up or down of 1% or more on 59 occasions against just 17 occasions last year.
Including yesterday’s 5% gain, the S&P500 index has moved up or down by 1% or more in a day 60 times this year compared with just 8 times in 2017.
Increased volatility is good for Plus500 as it encourages customers to speculate more on market moves.
Plus500 shares are among the best performers of 2018 having gained over 50% so far this year. This comes on top of a 160% share-price gain last year.
