Spread-betting company IG Group posted a sharp rise in first-half profit Tuesday as it benefited from an increase in trading volumes caused by volatile financial markets and from the collapse of rival MF Global.

IG, which says it is the world's biggest spread-betting company by revenue, reported pretax profit of 103.2 million pounds for the first half of its financial year ended November 30, up 28 percent from a year ago.

Spread betting involves taking two-way bets on the movement on assets such as foreign exchange, stock indices and commodity prices. The bigger the market movement, the bigger the spread or potential gain on the bet, so spread-betters such as IG have benefited from the recent large swings in financial markets caused by the euro zone debt crisis.

It also raised its half-year dividend by 9.5 percent to 5.75 pence per share.

(Reporting by Sudip Kar-Gupta; Editing by Erica Billingham)