FTSE 100 stock IG Group (LSE: IGG) just crashed spectacularly. As I write this on Friday (2 October), it’s down 22% for the day.

Now, I’ve been pretty bullish on this trading and investment company in recent years but I’ve never actually invested in it. Should I buy the dip?

Why has the stock crashed?

Today’s fall is down to a soft Q3 trading update. In this update, the company said that revenue for the third quarter is expected to be £240m, down 14% year on year.

It also said that it now expects 2026 revenue growth to be in a mid-single-digit percentage range. That compares with a prior forecast towards the upper end of a mid-to-high single-digit target range.

Second hammering in the space of months

It’s worth noting today’s fall is not the first big drop for IG shares in recent times. They also suffered a sharp fall back in late July when the company announced that it would be moving into prediction markets with the acquisition of US company Underdog.

As a result of both these drops, the stock is now trading almost 50% below its 2026 highs. That’s an enormous fall in the space of a few months and it does have me wondering if there’s a big opportunity here.

A low valuation and a high yield

My gut feeling is that there is. With the share price back near 1,000p, the trailing price-to-earnings (P/E) ratio is only 12.

Meanwhile, with analysts expecting a dividend payout of 49p per share for 2026, there’s a yield of nearly 5% on offer. Note that dividend coverage is very strong, suggesting the payout is sustainable.

I’ll point out that while today’s trading update is disappointing, I’m not totally surprised by it. Recently, markets have been quite calm meaning fewer opportunities for trading and investing companies.

Looking ahead, I expect market volatility to pick up, benefitting these companies. We could also have some major IPOs next year, which could boost investor interest.

What are the risks?

Having said all that, IG changed its stock buying quote system recently. This has annoyed a lot of customers.

The risk here is that some customers could move to other low-cost providers such as Trading 212, CMC Markets, and Robinhood. There really is a lot of competition these days.

Another risk is the Underdog acquisition. While it appears to be performing well today (the company says it generated revenue growth of over 100% in Q3), there’s plenty of regulatory uncertainty.

Finally, there’s the share price itself. Right now, the trend is clearly down.

In my experience, buying into a falling share price is very risky. That said, the 1,000p level could provide some support.

My move now

Weighing everything up, I’m going to watch the action play out from the sidelines for now. I want to see some signs of a stabilisation in the share price before buying.

Should you invest £5,000 in IG Group Holdings right now?

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Edward Sheldon owns shares in Robinhood Markets.