Britain's financial watchdog in December joined other European regulators in to protect individuals in the fast-growing 3.5 billion pound industry, where it said most retail investors lose money.

The industry is regulated by European Union rules which have no caps on leverage. That means investors can take out bets that are far larger than their initial outlay, offering greater potential returns but also running the risk of huge losses.

IG, which provides online stockbroking and trading services to retail investors, said it now offers clients "Limited Risk" accounts. These guarantee they can lose no more than their deposit, it said.

The British company also said it had withdrawn its Sprints binary product for new clients. Sprints, which allows customers to bet on the direction in which the market will move, accounts for 15 million pounds of IG's annual revenue.

The company reported a 7 percent rise in pretax profit to 105.2 million pounds for the six months ended Nov. 30, driven by higher trading activity amid market volatility leading up to Britain's vote to leave the European Union and the U.S. presidential election.

IG, which was founded in 1974 as the world's first spread-betting firm, also said net trading revenue rose 14 percent to 244.9 million pounds.

Revenue in the UK and Ireland, its largest market, where it has a 40 percent share of the financial spread betting market, rose 9 percent to 120 million pounds, while Europe saw a rise of 17 percent, it added in a statement.

IG, which has over 152,600 active clients worldwide, said new client numbers rose 59 percent from a year earlier, while revenue per client fell 6 percent in the year, with the UK proving a weak spot.

The company's main competitors are CMC Markets and Plus500.

(Reporting by Noor Zainab Hussain in Bengaluru; Editing by Alexander Smith)