What does Trading 212 do?
Trading 212 is an app that offers investing in over 6,500 stocks and ETFs through fractions shares and CFDs. Trading 212 also offers a robo-advisor service that can create an investment plan based on specific goals. Trading 212 clients can also invest through a stocks and shares ISA.
How much does Trading 212 cost?
Trading 212 offers free investing in stocks and ETFs and does not charge a commission for CFD trading. Trading 212 makes money through foreign exchange conversions. As some of the most popular stocks on the Trading 212 app are US based, Trading 212 may widen the FX spread by 0.5% on USD stock buy and sell conversions. Whilst there is no commission added for CFD trading, Trading 212 will generate revenue from widening the spread on CFD prices and also from financing overnight CFD positions.
Are Trading 212 a good broker?
Trading 212 did not take part in our 2020 survey so the Good Money Guides does not have a rating on their service.
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Trading 212 is the only UK platform I know that provides stocks and shares invest and ISA accounts with absolutely no trading fee, no platform fee and no foreign currency exchange fees. I have accounts with 4 other brokers, but am now putting my new money with this platform. They offer fractional shares, which are great. Using these you can build up a position in an expensive share like Amazon, just a few pounds at a time each week if you like. A recent addition is "pies", where you can essentially create your own fund, with percentages targets in different instruments and then invest cash that will invested in those percentages, say 10% AAPL, 10% MSFT, etc.
One thing I enjoy is the very active user community. There is not only participation by users, but also by the staff. Because staff are present one can obtain answers to questions in a matter of minutes rather than wait days for the answer to a question by slow email or secure message. The community spirit is polite and helpful. People who are new to investing are given lots of help by those who are more experienced.
The platform used to be just for CFDs, but has rapidly expanded to stocks and shares and ISA accounts. Apparently, they now have just passed 600,000 funded accounts, which makes them the most rapidly growing broker in Europe.
The phone app and web platform are already brilliant, but the undergo continual improvement, often as a result of requests by clients in the community forum. The phone app is very easy to use, and offers things limit orders and stop limits for those who are interested. Suppose you want to buy AAPL. You have the flexibility to place an order for 10 shares, 0.31 shares or £10 worth.
A deficiency of the platform for now is a lack of OEIC funds. You cannot buy something like a Vanguard Lifestrategy fund on this platform. You can only buy the Vanguard ETFs. However, if you are interested in those, this is the least expensive platform to purchase and hold them - less expensive that Vanguard's own platform. There are many other ETFs from iShares, xTrackers, etc.
People are of course concerned about the safety of their funds. Depositing and withdrawing money is easy, but like all brokers they have anti-money laundering regulations to meet, which has caused some users a bit of bother from time to time. Personally I have had no issues. Trading 212 is FCA regulated and client funds are FCFS protected. Trading 212 UK is a UK company registered with Companies House. They partner with Interactive Brokers for trade execution and share custody. It provides some reassurance to know that Interactive Brokers is a 22B market cap company in the NASDAQ 400 and has been operating 42 years.