CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Trading on inflation

Inflation is one of the most heavily discussed economic metrics in financial markets. Discover how to trade inflation using our US inflation index.

Start trading today. Call 1800 601 799 or email newaccounts.au@ig.com. We’re here 24 hours a day, except from 7am to 5pm Saturdays (AEST).

Contact us: 1800 601 799

Start trading today. Call 1800 601 799 or email newaccounts.au@ig.com. We’re here 24 hours a day, except from 7am to 5pm Saturdays (AEST).

Contact us: 1800 601 799

What is inflation and why should you trade it?

Inflation is, essentially, the increase in the price of products and services in an economy – it’s measured using a consumer price index (CPI). Keeping inflation levels down is typically the responsibility of a central bank, such as the US Federal Reserve or an equivalent body. Inflationary changes can have a huge impact on the value of a currency, consumers’ purchasing power and banks’ monetary policies.

US inflation is set to be a hot topic for the year ahead as the long-term effects of the pandemic continue to play out and the Federal Reserve look to pull their key policy levers to manage inflation targets throughout 2022.

By trading our US Inflation Index you can speculate directly on the movement of the inflation, or you can trade inflation as a hedging strategy against assets impacted by it, such as stocks and bonds. Hedging is the act of strategically placing trades so that a profit or a loss in one position, is offset by changes to the value of another.

How to trade inflation

You can now get exposure to US inflation with our unique US inflation index, which you won’t find anywhere else. With us, you’ll take a position using a CFD, which means you can go long or short and trade on leverage.

Go long or short

Trade on leverage

Get tax benefits1

When trading CFDs, you’ll never take ownership of an asset, and will instead take a position on the price of the index rising or falling in value. Learn more about how to manage your risk.

To trade inflation with us, follow these steps:

1. Learn about trading on inflation
2. Open a CFD trading account
3. Search for the US Inflation Index
4. Select your deal size and take steps to manage your risk
5. Open your position

Our inflation indices

Our US Inflation Index contains a selection of TIPS ETFs that have a correlation with our 5-year US inflation-linked bond yields, a commonly used benchmark for forward looking inflation expectations. The index is provided by BITA and priced according to the weight of its constituents.

INXG 45%*
VGOV 20%*
IGLT 15%*
GLTS 15%*
IUKP 5%*

* Figures are approximate

Our US Inflation Index contains five TIPS ETFs. The current index composition is:

TIP 20%*
SCHP 20%*
VTIP 20%*
STIP 20%*
SPIP 20%*

* Figures are approximate and subject to change.

Why trade inflation with us?

Trade the movements of the only US inflation index in the world

Get direct exposure to US inflation rates

Trade key ETFs that benchmark inflation with a single position

Get the best execution on your trades with our industry-leading tech

Open a trading position with spreads from just 1 point

Trade with Australia’s No.1 CFD trading provider*

Key market

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Prices are indicative only and subject to IG’s website terms and conditions.

Costs and charges

  • CFD trading costs

CFD trading is a form of leveraged trading.

Margin

Minimum margin requirement of 20% for retail clients trading the US Inflation Index

Spread

From 1 point on the inflation indices. We don’t attach our own spread to share CFDs

Overnight funding

Overnight funding applies to positions held overnight on cash (spot) positions only. Forwards do not incur overnight funding charges. Learn more about overnight fees

Open an account now

Open an account now

Fast execution on a huge range of markets

Enjoy flexible access to more than 17,000 global markets, with reliable execution

Trade seamlessly, wherever you are

Trade on the move with our natively designed, award-winning trading app

Feel secure with a trusted provider

With 45 years of experience, we’re proud to offer a truly market-leading service

Open an account now

Open an account now

Fast execution on a huge range of markets

Enjoy flexible access to more than 17,000 global markets, with reliable execution

Trade seamlessly, wherever you are

Trade on the move with our natively designed, award-winning trading app

Feel secure with a trusted provider

With 45 years of experience, we’re proud to offer a truly market-leading service

Start trading now

Log in to your account now to access today’s opportunity in a huge range of markets.

Start trading now

Log in to your account now to access today’s opportunity in a huge range of markets.

Trade inflation on a live account

You can open an account with us in three steps.

Fill in our online form

Answer a few questions about your trading experience

Wait for approval

We’ll verify your identity before processing your application

Fund your account

Start trading or continue practising on a risk-free demo account

FAQ

What are gilts and TIPS?

Gilts are bonds issued by the UK government. They can either be conventional, ie denominated in British pounds, or index-linked. The latter means that the gilts have coupons that are adjusted in line with the Retail Price Index (RPI) measure of inflation.

TIPS, short for total inflation protected securities, are a form of government security that’s indexed to a measure of inflation. They’re designed as a tool that could protect traders and investors against inflation, and the erosion of the value of money. The return of each security is built to match. As inflation rises, so does the principle value of the security, along with the interest it pays out.

Not everyone can trade these securities due to their complicated nature – that’s where ETFs come in. These funds provide a more accessible route to possible inflation protection. They each contain a range of gilts or TIPS that trade on major exchanges like the LSE, NYSE and Nasdaq.

How can I trade on inflation?

You can trade on inflation with us thanks to our unique inflation indices – a first, which you won’t find anywhere else. You can trade both UK and US inflation with a single position. Our inflation indices track benchmark gilt and TIPS ETFs listed on major exchanges.

To get started, open a spread betting or CFD trading account. You can use both to trade our inflation indices on leverage, which means you only need to put down a deposit to open your position. You’ll still get exposure to the full value of the trade – and profits and losses will be based on this amount, not your deposit.

It’s very important to note that trading is a high-risk activity. Your losses can significantly outweigh your deposit, as well as any profits that you make along the way. So, while trading gilt and TIPS ETFs give you possible inflation protection, the risk of losing money is still high. Always take care to manage your risk using our in-platform tools.

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*Number 1 in Australia by primary relationships, CFDs & FX, Investment Trends November 2021 Leveraged Trading Report.