Best Online Trading Platforms Compared & Reviewed

We have ranked City Index as the best online trading platform in 2022.

For beginners, City Index, IG and CMC Markets are easy to use, offer lots of educational material, trading signals and seminars and are well established

Choose a broker that is right for your level of trading experience

When private clients trade online, they are split into two different categories – Retail or Professional.

The different ways to trade tend to revolve around how much experience you have, and it’s vital that you choose a broker that offers the right type of trading and markets for how experienced you are. If you are a beginner, you should consider starting with low-risk investments through a stockbroker to gain experience before moving on to riskier asset classes like leveraged trading.

Sophisticated trading platforms like Saxo Markets or Interactive Brokers are best for experienced traders as they also offer on- exchange futures and options and have very advanced order execution functionality and DMA (direct market access).

Whenever you open a trading account to trade derivatives products like CFDs (Contracts for difference) or financial spread betting, you will be asked by your broker to take an “appropriateness test” during the account application process. This is to make sure you understand the risks of trading on margin before you can have an account. It is required by the regulator and designed to stop clients without enough experience speculating with too much risk.

IG offers the most account types. The trading platform started with just spread betting in 1974 but now offers, CFD trading, DMA access, and investment accounts including stocks & shares ISAs.

Some brokers will only offer one of these types of trading with discounted rates, while others may offer all of them but be slightly more expensive.

Each different type of trading has its own advantages and disadvantages. For example, the main advantage of financial spread betting is that profits are free of capital gains tax. The disadvantage, however, is unlike futures trading platforms and physical investing, you cannot work orders inside the bid or offer, so strategies such as scalping are not as effective and net costs can seem a little higher.

IG offers access to the most markets with over 17,000 assets available to trade via their online trading platform as a spread bet or CFD.

Choose a broker that offers all the markets you want to trade

When choosing an online broker, you first need to think about “what” you want to trade and “how” you want to trade it. If you only want to trade the most popular forex pairs, you will have a larger choice of brokers than if you want to trade stocks as well. However, online brokers that only offer a small selection of markets mean you may miss opportunities to trade other assets such as international stocks, minor forex pairs, fledgling indices, and ETFs.

The most popular markets for online trading are:

• Stocks
• Forex
• Commodities
• Indices

The top ten traded instruments on online trading platforms are:

• FTSE 100
• DAX
• DJIA
• NASDAQ
• S&P 500
• EURUSD
• GBPUSD
• USDJPY
• Gold
• Crude Oil
• UK Shares
• US Stocks

You can read about why each instrument is so popular for traders and what makes them appealing in our guide to the best markets for trading online.

CMC Markets is often the cheapest broker for trading the major markets as their platform is heavily geared towards more active and frequent traders.

Choosing a broker that transparently explains the costs of online trading platforms

Comparing the costs and fees of brokers for online trading is not as easy as you’d think. Neither is it simply about just finding the cheapest broker. Brokers charge in different ways, so it makes direct cost comparison difficult.

Even if cost comparison were simple, choosing the cheapest broker may mean you don’t get the best broker for your needs. For instance, one CFD broker may charge commission by widening the spread around market prices, whereas another may give you the underlying price, but charge a commission on top.

Minimum deposit levels and account inactivity fees are all costs you may have to face too, so finding these out in advance can help you realise which brokers offer the cheapest trading for you over time. The actual rate you are charged can be hard to calculate if the spread is being widened, but it makes calculating your P&L easier. However, with DMA CFD brokers, you can trade at better prices but will have to include commission costs as a separate line on your trading P&L.

The most common types of fees that online trading platforms charge are:

• Widening the bid/offer spread
• Commission charged post-trade
• Financing on overnight positions

You also need to be aware that if you are trading an OTC (over the counter) product like CFDs, FOREX, or spread betting, brokers may not hedge your trades in the underlying market. This basically means that they think your trades will be losers, so they accept your trade more like a bookie than a broker.

This is called the B-Book. There is a big debate about whether brokers hedging positions or not via the B-Book is a good or bad thing. In some cases, it is good because it reduces the need for brokers to widen the bid/offer spread, meaning that clients get better prices. However, some argue that it is bad because there is a clear conflict of interests as these brokers make money when clients lose.

Ultimately, whether clients make money or lose money, trading the market has little to do with how different brokers hedge their exposure, but rather more to do with the decisions that traders themselves make.

City Index offers some of the best added-value with as they provide trading signals through Smart Signals and post-trade analytics through Performance Analytics.

Choosing a broker that gives you advice and trading ideas

If you are looking for a broker to help with trading ideas, you need to be very careful. Whether or not you use the suggestions made by your broker, a broker’s recommendations should depend significantly on how much of an experienced trader you are.

Online platforms that offer trading to retail customers are not allowed to provide trading ideas, advice or anything that can be considered implied advice. We’ve covered in detail why you shouldn’t use advisory CFD brokers and why most trading educational courses are a waste of time.

You should not rely on others to help you make decisions in high-risk trading products like futures, options, CFDs and spread betting. Advice from wealth managers structuring your investments in a tax-effective manner through SIPPs and ISAs is one thing, but if you are a retail trader and a broker is phoning to pitch trading ideas, you should report them to the FCA.

Professional and institutional clients are allowed to discuss the markets and get advice from their brokers. This is because they have been appropriately classified as traders that fully understand the risks involved in the markets and leveraged products. Caveat emptor is a phrase that still applies to this, as trading is a self-directed form of speculation.

The FCA regulates online trading platforms in the UK for retail traders so margin rates are set and standard across most trading platforms.

Margin rates in the UK are capped at: 

• Indices: 20%
• Major Forex pairs: 3.33%
• Commodities: 10%
• UK & US shares: 20%

Getting the best margin rate from an online trading platform

These margin figures represent the deposit you have to put down when opening new positions and are in place to protect brokers as well as clients. The percentage is set based on what a big percentage move would be in the market to ensure that clients and brokers can fund a position.

However, if you are an experienced trader you can opt for a professional account, and get better margin rates. These differ from broker to broker. You can see the current professional margin rates in our professional trading account comparison.

Margin enables traders to leverage their risk capital and get more exposure to the market. For example, if you are trading the FTSE 100 you can trade £100,000 worth of FTSE with only £5,000 in your account if your broker is offering 5% margin. The advantage of this is that you get more exposure to the market and can diversify positions. However, the disadvantage is that your losses are multiplied and if you can lose your entire account balance with small percentages moves.

All trading platforms have demo accounts and it is one of the easiest ways to compare trading platforms is to open a demo account before you apply for a full account.

Testing a broker’s trading platform with a demo account

Most demo accounts will give you a good idea of the look and feel of a broker’s trading platform and usually come with some virtual funds to trade with. Demo accounts allow you to test order tickets, layouts and the trading tools that are available on the real platform.

Comparing demo accounts for trading is quick and easy to do as most provide almost instant access after confirming your details via email. Be aware that brokers use demo accounts as a lead generation tool to convert prospects into real traders. However, most salespeople at respectable brokers are very knowledgeable about the technology on their platform and are more than willing to talk to prospective clients on the phone, via email or in-person about the features on offer. One point to note though is that if a salesman is too pushy, that should be a warning signal that they are best avoided.

Saxo Markets, City Index and IG are three large online trading platforms that offer voice brokerage.

Choosing a broker that offers telephone trading as well as an online trading platform

Whilst most traders will choose a broker based on their ability to trade online, having an experienced dealer who can execute trades for you whilst you are not in front of a computer can be very important.

Some traders still prefer to trade over the phone, and those that do may form very close relationships with their dealers. Some traders talk to their brokers more than anyone else, so making sure that any broker you choose has a good desk of experienced dealers is vital.

Dealing over the phone is also handy if things go wrong and an error needs sorting out or if you have a particularly complicated strategy to execute that requires cross margin calculations that cannot be done online.

Voice brokerage is usually more common at prime brokers for professional and institutional traders, where hedge funds want to reduce the risk of trading errors by getting their traders to give orders over the phone or messaging systems rather than do it themselves. If you ask a dealer to execute a trade for you and they do it wrong, they will have to make good on what you asked for. Whereas if you are trading yourself online on a dealing platform and press buy instead of sell, you only have yourself to blame.

Brokers such as IG, Saxo Markets and Interactive Brokers that provide DMA or hedge client positions allow scalping where traders buy and sell positions quickly in order to take small profits and losses.

Yes, it is possible to make money trading online. However, online trading is a very high-risk form of investment, and only around 20% of online retail customers make money trading online.

Margin rates are the amount of leverage you get when you trade. For example, a margin rate of 10% in share trading means that you can buy £1,000 worth of shares with a £100 deposit, the equivalent of 10 times leverage.

All trading platforms in the UK must be regulated by the FCA and on the Good Money Guide, we only feature trading platforms that are regulated by the Financial Conduct Authority.

Choosing a broker that is appropriately regulated for your type of trading

One of the most important things about choosing a broker for online trading is ensuring that they are properly regulated for the type of trading you want to do.

You can look up whether a broker is regulated by searching the FCA register. The FCA register keeps a record of all regulated persons and firms in the UK, as well as what financial services and products they are allowed to offer.

Regulated trading platforms must display the fact they are regulated and also appropriate risk warnings that display the risk of the products that they offer.

Never trade with a trading platform that is not regulated by the FCA, as your funds are not covered by the FSCS.

You will need your national insurance number, ID and the ability to prove you understand the risk involved in trading online.

As long as you are classified as a retail trader and use an FCA-regulated broker for online trading, your money is protected up to a certain amount by the FSCS.

Publically traded online trading platforms like IG, CMC Markets, City Index (owned by StoneX) and Interactive Brokers are generally safer as they must report their financial status to the stock exchange and investors more frequently than private companies. By keeping an eye on a company’s share price you can see how healthy its balance sheet is.

There is no guarantee that any trading platform will not go bankrupt, but there are ways to keep an eye on the health of the company behind it.

Funds up to £85k are predicted by the FSCS if a broker defaults, but not above that amount, unless insurance is in place.

Yes, as long as you use an FCA regulated broker

A level-2 trading platform shows the market depth as well as the bid-offer prices. They are useful for getting better pricing, placing big orders, and seeing liquidity on the order book.

MT5 is the successor to MT4, one of the most popular trading platforms across the global. Brokers without their won trading platforms are able to use branded versions on MT5 to give their clients access to the markets.

IG is the oldest online trading platform and was founded in 1974

It is no longer possible to trade cryptocurrencies through spread betting and CFDs as the FCA has banned crypto trading. However, you can buy and sell cryptocurrencies without leverage through a cryptocurrency exchange. Be careful though as cryptocurrencies are an unproven and unregulated asset class and extremely high risk.

However, you can read our analysis on some of the best accounts for buying cryptocurrency here.