Trading 212 is a popular online broker that offers commission-free trading of stocks, ETFs, CFDs, forex, and cryptocurrencies. It has over 20 million users across Europe and claims to be the number one trading app in the UK.
But is Trading 212 really as good as it sounds? What are the pros and cons of using this platform? And how does it compare to other alternatives in the market?
In this article, we will try to answer these questions and help you decide if Trading 212 is the right broker for you. We also present several alternative trading companies so you can make your own comparison.
Trading 212 Review 2023
The origins of Trading 212 date back to 2004, when the company first appeared in Bulgaria as Avus Capital. Nine years later, it relocated to the United Kingdom, where it has offered its services to retail investors for over a decade.
The company operates under three entities: Trading 212 Markets Ltd., registered in Cyprus (CySEC license number 398/21); Trading 212 UK Ltd., registered in the UK (FCA license number 609146); and Trading 212 Ltd., registered in Bulgaria (FSC license number RG-03-0237).
At Trading 212, you can access commission-free stocks and ETFs. The platform offers two services under one umbrella: Trading 212 CFD and Trading 212 Invest. The former allows you to invest in leveraged derivatives, while the latter focuses on real financial market assets.
If you’re interested in a detailed review of the Trading 212 platform and its offering, you can find it here. In this article, however, we focus on the pros and cons of Trading 212. We have outlined the commission-free trading platform’s main advantages and disadvantages, especially for you.
Pros of Trading 212. Why Trading 212 Is Good for Retail Traders
Trading 212 promotes itself as an excellent trading platform, boasting quick and easy account opening as well as access to real stocks and ETFs. But what’s the reality? Below, you’ll find a list of what we believe are the most important advantages of using Trading 212’s services.
#1 Commission-free trading
Trading 212 does not charge any fees or commissions for trading stocks and ETFs, both real and CFDs. This means you can trade as much as you want without worrying about extra costs. This is a great advantage for beginners and frequent traders who want to save money on fees.
Both Trading 212 CFD and Invest do not charge trading commissions or custody fees. Bank transfers for deposits and withdrawals are also free of charge. Additionally, the platform offers a 2% annual interest rate on uninvested GBP funds.
#2 Easy and fast account opening
Trading 212 has a fully online and seamless account opening process that takes only a few minutes. You can open an account with as little as £1, and start trading right away. You can also choose from three account types: Invest, CFD, and a Stocks & Shares ISA.
All you need to do is provide an email address and password, and you’ll be immediately redirected to the trading platform. To fully utilize the platform, you’ll need to verify your email address, provide personal information, and fund your account.
#3 User-friendly trading platforms
Trading 212 has a web-based platform and a mobile app that are both well-designed and easy to use. You can access a variety of features, such as charts, indicators, news, alerts, watchlists, and more. You can also customize your layout and preferences according to your needs.
Inside the platform, you’ll find various features such as a macroeconomic calendar highlighting key events, educational video materials, and detailed information on companies and instruments you can potentially invest in.
#4 Wide range of stocks and ETFs
Trading 212 offers a large selection of products to trade, including over 10,000 stocks and ETFs worldwide, over 150 forex pairs, over 30 indices, over 20 commodities, and over 10 cryptocurrencies. You can also trade fractional shares, which means you can buy a portion of a share instead of the whole share.
The number of currency pairs and stock indices available is significantly larger than competing platforms.
#5 Educational resources
Trading 212 provides a lot of educational materials for its users, such as videos, articles, podcasts, webinars, and a trading academy. You can learn about the basics of trading, different strategies, risk management, and more. You can also practice your skills with a free demo account that comes with $10,000 virtual money.
While the educational materials are primarily aimed at beginners, more experienced traders may not find much of interest to them. However, it’s a nice addition to the overall offering.
#6 Auto and social trading capabilities
Trading 212 offers the features of Pies & AutoInvest in its product lineup. Pies allows for the creation of a diversified investment basket based on stocks and ETFs, while AutoInvest fully automates the entire investment process. Deposits and reinvestments can be made automatically.
The company also has an extensive social section where users share their opinions on the platform’s functionality and trade proposals on the Community forum.
Moreover, traders can exchange their “Pies,” share them and copy investment baskets created by other traders. The mobile app menu houses the Pie Collection, which showcases a ranking of the most frequently viewed shared investment baskets.
This functionality allows you to discover an array of fresh investment concepts without leaving the application. If a shared investment basket garners enough views, it stands a chance of being highlighted in the Pie Collection.
Cons of Trading 212. Why Trading 212 Is Bad for Retail Traders
However, Trading 212 is not without its drawbacks. It’s no coincidence that one of the popular search phrases is “why Trading 212 is bad.” We’ve thoroughly reviewed the platform for you and identified five of its weaknesses that you should pay special attention to.
#1 Limited customer service
Trading 212 does not have a phone or live chat support option. You can only contact them via email or through their online form. This can be frustrating if you have an urgent issue or need immediate assistance. The response time can also vary depending on the volume of queries.
#2 High forex fees
Trading 212 charges relatively high fees for trading forex CFDs. The fees are built into the spread, which is the difference between the buy and sell prices. The average spread for EUR/USD is 1.9 pips, which is higher than the industry average of around 0.7 pips.
The company also charges a 0.15% commission for currency conversion from one to another. However, the company introduced a multi-currency offering for Trading 2012 Invest account holders. They allow you to have several different currencies within one account so that you can save on currency conversions As a result, funds will not be automatically exchanged into your base currency.
Additionally, it levies a 0.7% fee on each deposit made via card, Google Pay, and Apple Pay for amounts exceeding €2000 cumulatively.
#3 No relevant fundamental tools
Although the Trading 212 platform is user-friendly and intuitive, advanced investors may find it lacking in tools, especially those that allow for in-depth technical and fundamental analysis. The list of indicators is limited to only the most popular ones, and for individual companies, investors will find only a financial summary of the latest reports and key ratios.
#4 No bonds or options
Trading 212 does not offer bonds or options as tradable products. This means you will miss out on some opportunities to invest in fixed-income securities, use derivatives to hedge your risks or speculate on price movements.
|
Products |
Available? |
|
Stocks |
✔ |
|
ETFs |
✔ |
|
Bonds |
✘ |
|
Funds |
✘ |
|
Options |
✘ |
|
Futures |
✘ |
|
Forex |
✔ (CFDs) |
|
Cryptocurrencies |
✔ (CFDs) |
|
Commodities |
✔ (CFDs) |
|
CFDs |
✔ (Stocks, Indices, Commodities, Forex, Crypto, ETF, and Treasury) |
In addition to bonds, the list of available instruments also lacks funds, options, and futures contracts.
Trading 212 Pros and Cons in a Table
|
Pros |
Cons |
|
Commission-free trading |
Limited customer service |
|
Easy and fast account opening |
High forex fees |
|
User-friendly trading platforms |
No relevant fundamental tools |
|
Wide range of products |
No bonds or options |
|
Educational resources |
|
|
Auto and social trading features |
|
Trading 212 Alternatives
If you are looking for alternatives to Trading 212, here are some of the best options you can consider. Compare their offerings with those of Trading 212 and choose the solution that best suits your expectations and investment goals.
- eToro: eToro is a global social trading broker that offers commission-free stock and ETF trading, as well as CFDs, forex, cryptocurrencies, and more. eToro also has a unique feature called CopyTrader, which allows you to copy the trades of other successful traders automatically. You can also join the eToro community, chat with other traders, share ideas, and learn from each other.
- Interactive Brokers: Interactive Brokers is one of the world’s largest and most reputable brokers. It offers access to over 135 markets in 33 countries, including stocks, ETFs, bonds, options, futures, forex, and more. It also has low fees and commissions for most products, especially for high-volume traders. Interactive Brokers also has advanced trading platforms and tools for professional traders.
- InvestEngine: InvestEngine is a UK-based robo-advisor that helps you create and manage a diversified portfolio of ETFs based on your risk profile and goals. You can choose from three portfolio types: Growth, Income, or Balanced. InvestEngine charges a low annual fee of 0.25% and has no minimum investment amount. You can also open an ISA account with InvestEngine and enjoy tax-free returns.
To Sum Up
Trading 212 offers a balanced mix of features catering to novice and experienced investors. Its commission-free trading, educational resources, and safety measures are more than recommendation-worthy.
However, the limited product portfolio and lack of fundamental tools may not meet the needs of all retail investors.
Before you make a final decision, it’s crucial to weigh these pros and cons and consider how they align with your investment goals.
A result-driven and self-motivated Finance & Accounting specialist with international professional experience in handling key financial data, strategic planning, team management, and sales.
