The marijuana industry presents a wealth of trading opportunities, its growth driven by legalisation that continues to spread across the US and Canada – and spurred on by ever-increasing support from the public. Discover how to trade cannabis stocks and ETFs with the world’s No.1 spread betting and CFD provider.1
Why is cannabis trading suddenly so popular?
As more states and countries legalise cannabis – fuelled by greater acceptance from the public – there’s reason to believe that the marijuana sector’s prospects for continued growth look good.
In fact, research suggests that the US legal marijuana industry could be worth as much as $75 billion by 2030.2 With forecasts like these, it’s no wonder that savvy traders have been flocking to the market, eager to capitalise on the latest trending marijuana stocks.
Benefits of trading cannabis
Why trade on cannabis, as opposed to buying marijuana stocks outright? There are a few unique advantages that spread betting and CFDs offer over traditional investment.
Go long or short
Take advantage of market movement, whether cannabis prices are rising or falling.
Free up your capital
Deposit just a fraction of your trade’s full value to open, with your profit or loss based on that full value.
Get tax benefits
Profits made from spread betting are free from capital gains tax, while losses on CFDs can be offset against profits for tax purposes.3
Why trade cannabis with IG?
Trade on easy-to-use platforms and apps, at your desk or on the move.
Rest assured that your account never stays below zero, thanks to negative balance protection.4
Get friendly, expert support 24 hours a day, from 8am Saturday to 10pm Friday.
Become a better trader whatever your skill level, with our online courses and webinars.
Choose a FTSE 250-listed, established provider, and benefit from 45 years’ trading expertise.
Open an account quickly and easily – you can usually start trading on the same day you apply.
How can I trade cannabis with IG?
You can trade on cannabis with IG by spread betting or trading CFDs on three types of market – each with their own benefits.
Speculate on the movement of individual stocks across the marijuana industry, from growers to the firms bringing cannabis to market.
Take a view on a basket of cannabis stocks, designed to track industry trends and broaden exposure for investors.
Spread betting and CFD trading are both a form of leveraged trading, meaning you can win, or lose, a significant amount more than you pay up front. Though not actually a cost to you, the margin you pay makes a big difference to the affordability of your trade, and differs between providers.
Your key payment for trading cannabis is the spread, essentially our commission for executing your trade. We work to keep our spreads among the lowest in the business.
|Market||Minimum spread||Minimum commission (share and ETF CFDs)|
|Shares and ETFs||0.15%||2 cents/share (US);
3 cents/share (Canada)
Trade cannabis with an IG account in minutes
Opening an account with us is quick and easy. Just follow these three steps.
Fill in our simple online form
We’ll ask a few questions about your trading experience.
Get swift verification
We can usually verify your ID in just a few seconds.
Fund your account and trade
Or practise on a risk-free demo if you’d prefer.
What moves cannabis markets?
Changes in the law
Cannabis is currently legal, in some capacity, in 43 US states and Canada – which accounts for most of the industry’s business. Further legalisation will be positive for share prices, where a return to illegality would deal a blow.
Supply and demand
With the industry in relative infancy, cannabis suppliers are expanding rapidly to meet investor expectations and public demand. However, that can’t last forever, and a supply glut – where supply outstrips demand – could see share prices falling.
As with any stock, the speculators that drive price movement will look to company news – changes in executives, earnings reports – to decide what’s positive or negative for marijuana businesses.
Get the latest cannabis news
What is cannabis trading?
When you use a financial product – for example, a spread bet or a CFD – to speculate on the movement of a cannabis-related asset, with the aim of profiting from that movement, you are participating in cannabis trading.
That asset could be the stock of a company that produces cannabis or a cannabis ETF made up of a basket of related cannabis stocks.
Cannabis trading differs from investment, which means the outright purchase and sale of cannabis stocks or ETFs. When trading on cannabis, you are speculating on price movement and never own any assets. You can also use trading products like spread bets and CFDs to profit whether markets are rising or falling, whereas investment only allows profit if an asset increases in value.
What is a cannabis index?
A cannabis index, or marijuana index, is a gauge of performance for a section of the marijuana industry. The price of a marijuana index will be derived from the prices of a selection of related marijuana assets. This could be the 20 top-performing marijuana stocks, for example.
IG’s cannabis index market captures the gross total return performance of the 20 largest publicly listed US and Canadian companies with direct revenue exposure to the cannabis industry. The index is calculated and managed by BITA GmbH.
You can trade on the price of a marijuana index by using financial derivative products like spread betting and CFDs, and use them to profit whether the price is rising or falling.
What are the constituents of IG’s cannabis index?
|Canopy Growth Corporation||CAD|
|Aurora Cannabis Inc.||CAD|
|GW Pharmaceuticals PLC||USD|
|Cronos Group Inc||CAD|
|OrganiGram Holdings Inc||CAD|
|CannTrust Holdings, Inc.||CAD|
|Green Organic Dutchman Holdings Ltd.||CAD|
|Innovative Industrial Properties Inc||USD|
|Supreme Cannabis Company Inc||CAD|
|Insys Therapeutics, Inc.||USD|
|Emerald Health Therapeutics, Inc.||CAD|
|Corbus Pharmaceuticals Holdings Inc||USD|
|Auxly Cannabis Group Inc.||CAD|
|Aleafia Health, Inc.||CAD|
|VIVO Cannabis Inc.||CAD|
|Newstrike Brands Ltd.||CAD|
You might be interested in…
Learn how to trade on the performance of an industry in four steps, from choosing your market to placing your first deal.
Find out how trading contracts for difference (CFDs) can help you take advantage of price movements in the financial markets.
Discover the marijuana high rollers that are getting traders talking.
1 Based on revenue excluding FX (published financial statements, February 2018).
2 Cowen & Co, 2018.
3 Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
4 Negative balance protection applies to trading-related debt only, and is not available to professional traders.