Discover the Best UK Trading Platforms: Top Picks for Every Trader

The safest platforms you can find are authorised by the Financial Conduct Authority (FCA). The FCA governs all financial institutions, not just UK trading platforms, that hold client money, like banks.

Besides ensuring fair competition among brokers, the FCA also protects traders. It monitors what the trading platforms advertise, whether they are correct, and how they keep client funds (the money that you keep in your trading account).

If your preferred broker is FCA-approved, and it should be, you also get a free insurance policy. The government has set up the Financial Services Compensation Scheme that covers your losses for up to £85,000 if anything goes wrong with the company holding your cash. You don’t have to pay any extra charges or sign up for anything to be eligible for it.

With FCA regulation, you also get access to the Financial Ombudsman Service (FOS). If you ever feel like you are not treated fairly and can’t settle the issue by contacting customer support, you can make an official complaint through FOS.

Unfortunately, no – you’ll have to pay some trading fees. The most common ones include commissions, spreads, and maintenance charges.

• You pay a commission per trade, it’s one of the main ways brokers make money. Many trading platforms in the UK charge a flat fee, which can be anywhere between £3.95 to £11.5. When it’s a percentage fee, it usually hovers below 1%.

• Spread is the difference between how much you need to buy an asset, and how much it actually costs. Many best online trading platforms mark their prices using spreads. You’ll see that derivatives like CFDs or spread betting are priced this way.

• If you’d like to keep your position open overnight, there’s an overnight fee. This is also mainly used for CFDs and other leveraged products.

• You should also pay attention to foreign exchange fees. If you’d like to buy a US stock, like Apple or Tesla, you have to change your pounds into dollars first. The trading platforms do that for you, but there’s a fee. It’s usually the exchange rate at the time (spot rate) plus an extra fee, which ranges between 0% and 1%.

• If your trading account remains dormant for a while, you might be hit with inactivity fees, which can be anywhere between £8 to £20 a month.

• There can also be withdrawal or deposit fees, annual admin fees, or fees for holding your investments, known as the custody fee.

This depends on three main variants;

1. The minimum deposit requirement of your preferred trading platform. Many discounted brokerages like Trading 212 or Freetrade don’t require more than a few pounds to start trading. On the other hand, some established firms like Saxo Markets may ask for hefty amounts (£500). There may also be the case when a few of the trading platforms may ask for higher limits for different forms of payment. IG, for example, requires £250 for card payments.

2. The asset you wish to trade. How much does your preferred asset cost? If some stocks are too unattainable at the minute, you can try your chances with fractional shares (units of a share, which can cost around £1 or £2).

3. How much you can trade with. Remember that when trading, nothing is guaranteed. Your capital is always at risk and you may end up losing your initial investment. So, a thumb rule is to never trade with more than you can afford to lose.

If the price of the asset and requirements from your stock trading platform allow it, you can start investing with as little as £100.

Trading with small capital can be risky

In the long run, though, it’s not advisable to trade with such small capital. Here’s why:

Let's say you have £100 and you want to trade stocks. You find a stock that you think is a good investment and decide to invest all £100 in it.

Unfortunately, the stock experiences a sudden drop in value, as it happens from time to time, and you end up losing 50% of your investment. Only £50 remains from your £100 now.

Now, in order to recover your initial investment of £100, the stock needs to increase by 100%, which can be quite difficult.

As you can see, small capital can limit your ability to manage risk and recover from your losses. If you are an absolute beginner with small capital, it may make sense to try your chances with fractional shares (as offered by Trading 212 and Freetrade). This way, you can spread your investments across different companies with only a few pounds.

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Trading platforms in the UK include stocks by default. Still, you will also see other assets flying around, from more traditional ones like bonds, commodities, and exchange-traded funds to newer players like cryptocurrencies. We tend to navigate towards trading platforms with a wide range of offerings as they allow greater flexibility for branching out and having a diversified portfolio.

Stocks and shares

Stocks represent a small unit of a company. When you buy a stock, you actually become a part owner of the company. As the company does better, the price of the stock will usually go up. But other things can affect the price too, like what other investors think of the company, its industry, and the economy as a whole.

If the economy is not doing too well, and people think that the company management is not cut out for the task, they might decide to sell their shares. This can ultimately cause the price of the stock to go down.

So, it's important to keep an eye on what's going on with the company and its industry. Almost every stock and shares platform in the UK supplements its trading services with stock market research. Many, like IG or Saxo Markets, include quality commentary on market events and certain companies written by their own financial experts.

If you are a new starter and wish to learn how to buy shares and the way stock markets work, it makes sense to go with a low-cost, intuitive platform like eToro, Freetrade, or Trading 212. All three are among the best stock trading platforms for casual investors. eToro and Trading 212 offer demo retail investor accounts that you can use to learn the ins and outs of the platform, while Freetrade offers a chance to crack into the stock exchange with only £2 using fractional shares (to rehash, fractional shares refer to units of a whole share).

Mutual funds and ETFs

Both mutual funds and ETFs are expertly managed collections, or “baskets” of assets, like stocks, bonds, or commodities. The fund managers handpick and invest in these assets. When you invest in a fund, you don’t actually own the assets, the fund itself does.

When the assets under the fund’s management do well, the value of your share in the fund also increases. It’s a bit different to buy into mutual funds compared to stocks as they are not traded on an exchange. All of them have a minimum investment amount, and it can range from £500 to £5,000 or even £10,000.

Exchange-traded funds (ETFs) are the cheapest, arguably most accessible type of investment fund. They are traded on stock exchanges like stocks, and their price is much lower than mutual funds. They can include assets from a certain industry, like the best automaker companies, or a group of well-performing companies, like the top 100 companies in the UK (FTSE100).

The majority of the best UK trading platforms offer ETFs, but mutual funds are not as common. You will also see that big investment companies have their own funds, like Vanguard or Fidelity. You don’t have to use their platforms to buy their funds, though. You can find them on more affordable options like Freetrade or Fineco Bank.

Forex

Forex trading is just swapping one currency, like pounds, for another, like euros. You try to make money out of price swings. There are over 180 currencies in the world – this means you’ve got a world of opportunities.

The forex market is also huge, it is the largest financial market (like the stock market or commodities market). International politics and local events affect the currency exchange rates constantly. This means that while you have a lot of exciting opportunities to make money, there’s also a high risk involved because the market is very volatile (prices change rapidly).

Saxo Markets is among the best brokers for forex trading with specialised tools and a low-cost trading fee structure. However, if you are just starting, we consider eToro to be the best forex trading platform for beginners. With straightforward pricing and an easy-to-use platform, you won’t be confused while getting up to speed. Plus, you can follow more experienced traders to get some inspiration.

Cryptocurrencies

Crypto assets were originally designed as an alternative that may replace cash, but it doesn’t look like it’ll happen soon. As of now, they make great speculative trading opportunities for many people.

Simply put, cryptocurrencies are tokens or coins that help blockchains operate. Every blockchain has its own coin, but some companies also issue their own. You can buy and sell coins on cryptocurrency exchanges and trading platforms that include coins within their product portfolio.

Cryptocurrencies have no intrinsic value as of yet, and while it has been a growing market, it’s still relatively small. Since they have no important use to us yet, speculation and market sentiment (what investors think about the asset) determine their value more than anything. All these combined make cryptocurrencies very volatile, meaning that prices can change rapidly and dramatically.

eToro, IG, Fineco Bank, and Saxo Markets are among the best trading platforms in the UK that allow you to trade cryptocurrencies. They have a pretty good range of coins listed, and trading fees are not steep. If you’d like to use a cryptocurrency broker instead, Coinbase is an excellent choice to get started.

Commodities

Commodities are physical goods we consume, like energy, metal, or livestock. Experienced traders usually prefer branching out to commodities because they behave differently than other assets. Gold prices, for example, rise when stock prices decline. So it’s a good way of offsetting your losses when the prices of other assets go down.

Many trading platforms in the UK offer commodity trading, but it’s usually through leveraged products like spread betting or CFDs. Capital.com, eToro, and Saxo Markets have some pretty good collections – but you should be mindful when betting on commodity prices as they can be very volatile.

Alternatively, you can also indirectly invest by buying commodity-producing company stocks or invest in commodity ETFs, which track the prices of one or more commodities. Degiro is one of the best trading platforms for indirectly investing in commodities, you can easily search the types of commodities you’d like to invest in and it has a wide range of offerings.

You have probably seen many trading platforms in the UK offering products like CFDs, spread betting, or options. These are called derivative trading products because they derive their value from underlying assets. See, this is where it gets a bit complicated – let’s break this down.

Derivatives are contracts. When you trade derivatives, you essentially buy and sell contracts. Using these contracts, you can speculate on the price direction of an asset (whether the price will go up or down). These assets can be stocks, bonds, commodities, or currencies. The main difference is that you don’t actually own the asset, but you are just placing a bet on its price movement.

CFDs, spread betting, and options contracts explained

An options contract, unlike CFDs and spread betting, gives you a chance to buy the asset eventually. However, when you buy an options contract, you don’t own the asset straight away.

Imagine that you predict the Apple stock will increase from £120 to £140 in the near future.

• If you enter a CFD contract and bet on the price rising, you will pay £120 initially. If the price rises as you thought it would, the broker will pay you the difference when you close your trade. Say that it rose from £120 to £140, and your broker will pay you the £20. But if it drops from £120 to £100, you owe the broker £20.

• Spread betting works similarly to CFDs. The main difference is that when you are placing a spread bet, there’s an expiration date. Whereas with CFDs, you can close the trade whenever you want.

• An options contract gives you the right, not the obligation, to buy the Apple share at a price you decide. This is called the strike price. Say that you set the strike price at £130. If the Apple stock rises to £140 as you predicted, you can buy the stock for £130 (lower than the actual price) with your options contract. But you don’t have to. So if the stock price doesn’t rise, you can just abandon the contract.

What is leverage?

Leverage is the money you can borrow from your broker. It essentially increases your buying power. Say that you have £10,000 to trade with, and your broker gives you 5x leverage. This increases your initial investment to £50,000. If you are in a CFD contract, and the price moves 5% in your direction, you make £2,500 instead of £500.

Leverage can magnify your wins but it also magnifies your losses. If the price moved 5% in the other direction, you would lose £2,500 instead of £500.

Every leveraged trade has a margin requirement. It is the minimum amount of funds you need to have in your trading account to use leverage. At its core, it works like an insurance for the broker.

The best leverage trading platforms in the UK include IG and Capital.com, both at 30x (increases your initial investment 50 times). They also have pretty low margin requirements. For more information, visit our guides on the best CFD brokers, options trading, and spread betting platforms.

As you browse through the trading platforms in the UK, you will see some of them offer a number of different account types. The most common ones are individual savings accounts (ISA), self-invested pension plans (SIPPs), and general investment accounts (GIA).

We call ISAs and SIPPs tax wrappers because they have pretty great tax advantages. With both of these retail investor accounts, you can invest in whatever asset you’d like (or whatever your best online trading platform offers). But, you can’t use trade derivatives like CFDs – so they are better suited for your non-leveraged trades.

The difference between ISA, SIPP, and general investment accounts

• For ISA accounts, the government sets an annual allowance at the beginning of each tax year (restarts on the 5th of April every year). The amount is currently £20,000. As long as you don’t invest more than £20,000, anything you gain from your investments will be completely tax-free.

• SIPPs are a bit different. Most people can contribute as much as £60,000 to their SIPP accounts per year. If you are a basic rate taxpayer (that’s earning under £50,270 per year), the government adds 20% tax relief. This means that for every £80 you contribute, you’ll get a free £20.

  If you are a higher-rate taxpayer (earning over £50,270 per year), you still get 20% automatically and get another 20% in your tax returns. So, if you contribute £10,000, the government will still add £2,000, and you can claim an additional £2,000 from HMRC when you do your self-assessment.

• A general investment account is the good old, regular brokerage account you’d get from any trading platform available for UK investors. It doesn’t have any tax benefits or anything special. You can, though, trade CFDs and other derivatives as much as you like.

And the good news is, you can have all these three retail investor accounts at once. If you are not looking to use derivatives, we recommend you max out your ISA allowance first for your investments. This way your profits won’t be salted away with taxes.

Once you get up to speed, you may consider automating your trades. Automated trading includes setting up conditional entry and exit positions (opening and closing a trade). This could look like this:

An automated trade example

Let's say you have a trading strategy that involves buying or selling a certain stock when it reaches a certain price. Instead of monitoring the stock price and placing orders manually, you can set up an automated trade to execute these trades for you.

• You set up the algorithm to buy a stock when its price reaches a certain level. For example, if the stock price reaches £50, the algorithm will automatically buy the stock or execute a "buy" order.

• You can also set up an algorithm to sell stocks when they reach a certain price. For example, if the stock price reaches £55 from £45, the algorithm will automatically sell the stock, or execute a "sell" order, so that you lock that profit of £10.

• On the other hand, if the stock price drops to £45, the algorithm can automatically sell the stock to limit your potential loss (in case the price keeps dropping).

You can leave the algorithm running and it will monitor the stock price and execute trades automatically based on the conditions you've set.

While it helps, you don’t have to be a programmer to use algorithmic trading. MetaTrader4 and MetaTrader5 are the most commonly used automation software by the best trading websites in the UK. You can set your parameters using these software, and programs called Expert Advisors (EA) will monitor the markets and execute your trades for you. If you are interested, IG and Saxo Markets are among the best algorithmic trading platforms with access to MetaTrader4.

Automation is not always as complicated, though. In fact, it can be quite a relaxing and engaging experience.

What is copy trading?

Copy trading involves copying the trades of a trader of your choosing. Say that James is a very successful trader, he consistently turns a profit and doesn’t like to take many risks. His choices fit with your trading goals. You really like the stocks he chooses, and how he times his orders (when he buys or sells stocks). You’d want to follow in his footsteps, but you can’t just monitor his trades all day.

Enter copy trade – with a copy trading function, you can automatically copy all of James' trades on autopilot. And if he ever takes a downturn, you can just stop.

Copy trading usually comes with a larger focus on social trading.

Social trading platforms include social feeds like forums so that the traders using the platform in the UK can interact with each other. This way, you can detect traders whose style you like and that you’d like to learn more from and use the copy trading function to mirror their trading behaviour. Hands down, eToro is the best copy trading platform available for UK investors. It makes trading a completely interactive experience. You’ll even see that the platform eerily resembles Facebook.