Looking for your perfect trading app?

I’ve tested, scored, and ranked the best stock trading apps in the UK.

Using your phone to trade gives you the power to tap into global markets seamlessly on the go.

Whether you’re a beginner or an experienced trader, I’ve got you covered.

So, in a nutshell, what are the best stock trading apps in the UK? The best stock trading apps in the UK are eToro, with its diverse trading options and social elements; Plus500, known for its advanced tools suitable for seasoned traders; and Freetrade, which offers a user-friendly experience and zero-commission trades, appealing to cost-conscious investors.

Top Stock Trading Apps UK Ranked

Here is a quick list of the best stock trading apps to use in the UK based on my hands-on analysis:

1. eToro – Overall best stock trading app UK for beginners
2. Plus500 – Award-winning mobile app for trading CFDs¹
3. Freetrade – Best stock trading app UK for free share upon signup
4. interactive investor – Best trading app UK for a large selection of investment options
5. InvestEngine – Best trading app for ETFs
6. AJ Bell – Best stock trading app for frequent traders
7. Pepperstone – Best stock app for CFDs & spread bets
8. AvaTrade – Best trading app UK for low spreads & fees

Best Trading Apps UK Compared for Investors

Here I’ve compared the trading apps based on four key rating criteria you must consider and compare:

Rank	Trading app	Minimum deposit	Trading fees	Types of investments	ISAs
1	eToro	£7.50	£0	Stocks, indices, ETFs, currencies, commodities, crypto	Yes, with Moneyfarm
2	Plus500	£100	£0	Offers CFDs on forex, cryptocurrencies, stocks, commodities, ETFs, options, indices	No
3	Freetrade	£0	£0	Stocks, ETFs, investment trusts, REITs, SPACs, IPOs	Yes
4	interactive investor	£0	£3.99	Stocks, funds, trusts, warrants, ETFs	Yes
5	InvestEngine	£100	£0	ETFs	Yes
6	AJ Bell	£500	£1.50 – £9.95	Stocks, funds, trusts, bonds, ETFs	Yes
7	Pepperstone	£0	£0	Forex, commodities, indices, currency indices, crypto, shares, ETFs	No
8	AvaTrade	£100	£0	Forex, stocks, commodities, indices	No

Best Stock Trading App UK Reviews

The rise in the use of trading apps in the UK has been significant over the last few years, with estimated downloads reaching around 7.1 million or 13% of the adult population².

It’s easy to understand why. Who wouldn’t want to have the ability to work towards financial freedom and trade on the go?

Having worked in the retail investment sector in the financial heartbeat of the UK (London) over the last four years, I had the opportunity to experience the rise first-hand.

Additionally, in my role working for one of the UK’s leading financial companies, “a trustworthy and respected provider of news, education and market analysis for the everyday investor”, I was able to work with and test some of the biggest trading apps on the market.

Using my experience in this field, I’ve compiled a list of the best UK stock trading apps based on four key criteria:

1. Minimum deposit
2. Trading fees
3. Types of investments
4. ISA availability

Factors such as usability, education materials, and additional features were also considered.

All the trading apps I’ve reviewed below are available on Android and iOS, and more importantly, regulated by the UK’s financial watchdog, the Financial Conduct Authority (FCA).

1. eToro – Overall best stock trading app UK for beginners

The overall winner on my list of the best trading apps and what I recommend to beginners is eToro.

The trading app is well-designed and user-friendly, offering features like stop-loss orders for auto-closing losing trades and allowing affordable investments via fractional shares.

In my experience using eToro, I have found it to be a trustworthy and secure platform, backed by stringent regulations (FCA-regulated) and industry-leading security measures.

This reassures users that their investments and personal information are well-protected.

One aspect that sets eToro apart from its competitors and its biggest advantage is its thriving community of traders from around the world.

If you’re confused or not sure where to start, the trading app facilitates a collaborative environment where users can engage in discussions, share insights, and learn from each other’s experiences.

This community-driven approach adds significant value to the trading journey, providing opportunities for networking and gaining valuable knowledge.

The platform offers a range of trading instruments, including stocks, cryptocurrencies, and more. I have personally used eToro for stock trading in the UK and found their execution speeds to be commendable, ensuring timely trades and minimising slippage.

eToro is the number one platform for copy trading. It boasts one of the world’s largest copy-trading communities and its innovative CopyTrader feature.

If you’re not sure what to trade, this unique functionality allows you to automatically replicate the trades of successful traders on the platform.

For beginners, it’s a great way to learn about trading, while experienced traders can diversify their portfolios and potentially boost their returns.

A brand new feature eToro just launched is that you can now earn up to 5.3% interest on unused balances in the platform, pretty cool!

Considering key decision-making factors, eToro delivers in terms of performance, reliability, and accessibility. The platform offers traders real-time market data, fully customisable charts, and deep research tools for smart decision-making.

eToro is a top pick for UK traders due to its easy interface, strong security, active community, and unique features, suitable for new and expert investors.

Finally, it’s worth noting that as of 2023, eToro announced that they reached 30 million registered users worldwide.

On top of this, they have an ‘Excellent’ rating on Trustpilot (which is quite rare for a trading app), with over 18,000 reviews.

Key rating criteria:

Minimum deposit	Trading fees	Types of investments	ISAs
£10	£0	Stocks, indices, ETFs, CFDs, currencies, commodities, crypto	Yes, with Moneyfarm

Other fees: $5 withdrawal fee, $10 inactivity fee, currency conversion fees.

Read my full eToro review.

Pros:

• Commission-free trading for stocks and ETFs
• Smooth and straightforward account setup process
• Access to social trading features

Cons:

• $5 charge for withdrawals
• Limited to a single account currency option
• Room for improvement in customer support services

2. Plus500 – Award-winning mobile app for trading CFDs

I’d recommend Plus500 if you’re looking for a more comprehensive trading experience, that is a step up from beginner-focused trading apps like eToro.

That’s not to say Plus500 isn’t good for beginners. With its demo trading account and learning academy, it’s a great platform for beginners who want to level up in their trading and learn how to properly use trading tools and charts.

It’s perfect if you want to trade CFDs – a trading vehicle characterised by high-risk yet high-potential upsides. This is because every trade made via CFDs essentially increases your debt as you are borrowing capital for each trade.

The beauty of CFD trading, though, lies in its flexibility; it allows you to place orders regardless of market swings.

However, the risk inherent to this method is undeniable and losses can accumulate quickly, so you must know what you are doing.

Fortunately, Plus500 offers ‘Negative Balance Protection’ under ESMA rules, ensuring you don’t lose more than your account balance, but be cautious.

This serves as a more secure measure compared to the traditional standard stop-loss.

Plus500 is not just a high-risk CFD platform.

It is a comprehensive trading app designed for what might be termed ‘intermediate traders’ – individuals who are more informed than the average retail investor but not as capital-rich as day traders.

The app provides access to a wide array of cutting-edge trading tools and securities, without compromising on its user-friendly interface.

One unique aspect of Plus500 is its knowledge base that provides a step-by-step guide on using its provided securities, ensuring even novice users can bridge the knowledge gap and improve their trading acumen.

This added layer of support aids in responsible trading and helps traders navigate the complexities of the market.

However, don’t forget that Plus500’s very strength – its complexity and array of tools and securities – also introduces an increased risk factor. This is particularly the case when dealing with volatile securities offered by the platform.

With over 10,000 user reviews on Trustpilot, a majority of which are positive, and regulated by the FCA (#509909), Plus500 is one of the best trading apps for those looking for a complete trading experience.

Key rating criteria:

Minimum deposit	Trading fees	Types of investments	ISAs
£100	£0	Offers CFDs on forex, cryptocurrencies, stocks, commodities, ETFs, options, indices	No

Read my full Plus500 review.

Pros:

• Intuitive, user-friendly platform
• Easy and efficient account setup
• Demo trading account & learning academy
• Fast and responsive customer service

Cons:

• Could be more in-depth research tools

3. Freetrade – Best stock trading app UK for free share upon signup

Another top contender is the stock trading app from Freetrade, a relatively new player in the UK trading industry having launched their app in 2018.

With Freetrade, you can trade US, UK, and European stocks with zero commission.

Plus, you get a free share worth between £10-£100 when you open and fund your account with at least £50.

Freetrade also offers a Standard Subscription Plan, which includes a full list of stocks and Freetrade ISA investment. You can even buy fractional shares in US stocks for just £2, making it an attractive option for investors looking to start investing with a smaller amount of money.

Freetrade provides features like performance analysis, returns breakdown, and curated stock insights to inspire investment.

The share trading app is user-friendly and easy to use, making it perfect for beginners. It lets investors trade stocks for free, a great option if you’re looking to save money and boost returns.

Freetrade offers many learning tools like articles, videos, and forums. This commitment to education cultivates a supportive environment so you can learn and grow your trading skills.

In terms of performance, Freetrade offers a diverse range of investment options, including stocks and exchange-traded funds (ETFs).

The platform’s intuitive search and analysis tools empower users to research and evaluate investment opportunities effectively.

Freetrade also provides real-time market data and comprehensive charts, allowing investors to monitor their portfolios and make data-driven decisions.

In summary, I’ve found that Freetrade is a top choice for UK investors looking for a user-friendly and one of the simplest stock trading apps.

The platform has an easy interface, offers free trades, gives learning tools, and follows regulatory compliance. Both new and expert traders can trust it, so you won’t have to worry.

I’d recommend Freetrade for its commitment to user experience and its mission to democratise investing in the UK, a much-welcomed company in the UK finance industry.

Key rating criteria:

Minimum deposit	Trading fees	Types of investments	ISAs
£0	£0	Stocks, ETFs, investment trusts, REITs, SPACs, IPOs	Yes

Other fees: £5.99/month for Stocks and Shares ISA, £11.99/month for Self-invested personal pension (SIPP) plus other benefits.

Read my full Freetrade review.

Pros:

• Commission-free trading for stocks and ETFs
• Swift and user-friendly account registration process
• Excellent mobile trading platform

Cons:

• Limited product variety in the portfolio
• Lack of research tools

4. interactive investor – Best trading app UK for a large selection of investment options

The stock trading app from interactive investor is perfect for DIY investors with a bit of experience.

Its greatest advantage is that you will get access to over 40,000 UK and international investment options, with a flat fee that works well for larger portfolios.

The trading app gives tools to help with smart investing. It has many tax wrappers, and you can pick the best, like an online SIPP.

The flat fee covers all account types. With the monthly regular investing service, you avoid trading fees. Plus, Interactive Investor offers human financial advisors for those needing extra guidance.

The app offers a range of stock trading tools like fundamental and technical analysis, news, expert research, charting, and tools for analysing performance and returns.

The desktop trading platform is user-friendly and has a matching mobile app, so you can easily track your investments on the go.

Key rating criteria:

Minimum deposit	Trading fees	Types of investments	ISAs
£0	£3.99	Stocks, funds, trusts, warrants, ETFs	Yes

Other fees: Stocks & Shares ISA and trading account starting at £4.99/month. Self-Invested Personal Pension (SIPP) starting at £12.99/month.

Read my interactive investor review.

Pros:

• Intuitive trading platforms for a user-friendly experience
• Swift and hassle-free deposit and withdrawal processes
• Excellent customer service via phone

Cons:

• Basic charting and analytical tools
• Incurs a monthly account fee

5. InvestEngine – Best trading app for ETFs

I personally recommend InvestEngine as the best trading app if you plan to only invest in ETFs.

InvestEngine is most effective for ETFs, providing managed and DIY solutions for investing in stocks through funds.

The trading app is clean, modern, and user-friendly, with a range of automation tools to help you make the most of your investments.

With InvestEngine, you can access ETFs from the UK, US, and global markets. You can choose from selection of over 580 ETFs from the likes of Vanguard, iShares, HSBC, Invesco, and more.

You can create and manage your own portfolio, with the ability to set up recurring investments and buy fractional shares.

InvestEngine’s fees are competitive, with no commission or hidden costs, making it a cost-effective option for investors who want to manage their investments.

The app also provides access to news and research to help inform investment decisions, and you can track your portfolio in real-time.

I would recommend InvestEngine for investors who want to take charge of their investments and get the most out of the opportunities that ETFs have to offer.

Key rating criteria:

Minimum deposit	Trading fees	Types of investments	ISAs
£100	£0 (DIY) 0.25% (Managed)	Investment funds	Yes

Read my full InvestEngine review.

Pros:

• Extensive selection of ETFs (580+)
• User-friendly interface
• Low-cost managed option with a 0.25% fee
• Excellent customer support
• Ability to invest within a business account

Cons:

• Limited investment options to only ETFs
• No option for personal pensions
• Lack of additional features

6. AJ Bell – Best stock trading app for frequent traders

AJ Bell is a cost-effective trading app for frequent traders, with low fees for more than 10 trades per month and a modest portfolio.

It provides access to an extensive range of tax wrappers, including the first online SIPP in the UK, and is one of the largest UK trading apps.

Its user-friendly desktop platform also converts well to the mobile app, allowing investors to trade with ease. The app also offers a good selection of tools for stock trading, though it lacks price alerts.

With access to funds and ready-made portfolios with low fees, AJ Bell is a great option for those looking to make frequent trades.

Key rating criteria:

Minimum deposit	Trading fees	Types of investments	ISAs
£500	£1.50 – £9.95	Stocks, funds, trusts, bonds, ETFs	Yes

Other fees: Annual platform fee of 0% – 0.25% for funds and 0.25% for shares (maximum £3.50/month).

Read my full AJ Bell review.

Pros:

• Trusted trading app
• No withdrawal fees
• Attractive pricing for mutual fund investments

Cons:

• Annual platform fees

7. Pepperstone – Best stock app for CFDs & spread bets

Pepperstone offers an all-digital platform for stock and options trading.

Founded in 2010 by two former analysts, this UK stock trading app offers user-friendly tools for both new and experienced investors.

if you’re looking for options, Pepperstone provides its own platform and supports three other popular ones: MetaTrader 4, MetaTrader 5, and cTrader.

This offers flexibility and a range of features including advanced trading tools, backtesting, and variable spreads, catering to diverse trading styles and strategies.

In particular, MetaTrader 4 features an automated market scanner, while MetaTrader 5 comes with built-in indicators and an economic calendar.

The lack of a macOS platform for cTrader is compensated for by the robust MetaTrader offerings.

Pepperstone’s extensive toolset simplifies portfolio management and market analysis, allowing real-time tracking of portfolio performance and asset allocation.

The platform provides indicators and analytics for price and volume analysis and even incorporates social media analytics to aid investment decision-making. This makes it one of the easiest ways to track market fundamentals and the direction of stocks.

Additionally, the platform is robust in its security, ensuring your investments are protected.

Setting up a trading account with Pepperstone is straightforward, requiring no minimum investment and charging no trading fees.

Funding options are flexible, including bank or wire transfer, with balances held in either USD, EUR, or cryptocurrency, depending on the user’s location.

Withdrawals can also be made easily to an external account. However, it should be noted that customer support is limited to 24/5, which may be a drawback for some investors requiring round-the-clock assistance.

While the platform is not commission-free, it offers flexibility allowing investors to choose what suits their financial strategy best. A lack of inactivity charge adds to its appeal.

From stocks, ETFs, options, to futures, the trading possibilities on Pepperstone are vast, making it great for UK traders seeking an intuitive, flexible, and comprehensive trading app.

With this in mind, I would recommend Pepperstone if you aim to improve your trading strategy, plan to utilise its demo accounts, and spend time studying its learning materials.

Key rating criteria:

Minimum deposit	Trading fees	Types of investments	ISAs
£0	£0	Forex, commodities, indices, currency indices, crypto, shares, ETFs	No

Read my full Pepperstone review.

Pros:

• Quick onboarding process
• Excellent customer support
• No-fee deposits and withdrawals

Cons:

• Primarily offers CFDs
• Basic features on the MetaTrader platform

8. AvaTrade – Best trading app UK for low spreads & fees

AvaTrade, the final stock trading app I suggest, is a broker based in Ireland.

It is important to note AVA Trade EU Ltd is incorporated in Ireland and is regulated by the Central Bank of Ireland (Reference No.: C53877), not the FCA.

At AvaTrade, users can speculate on price changes in stocks, commodities, indices, and currencies using CFD trading.

For example, if you want to trade Microsoft stocks, just open a CFD account with AvaTrade and use their platform to trade on its price changes.

You can buy a leveraged Microsoft stock CFD to go long or short, letting you profit if the stock price goes up or down. What truly matters is the direction you predict the price to move.

However, AvaTrade isn’t merely a platform for CFD trading.

It is a labyrinth of intricate information about the diverse securities it offers, along with the markets they belong to.

While some may find its depth overwhelming, others see it as a rich source of insights for informed trading decisions.

It also offers a wide range of trading options and a strong set of communication tools between traders, ensuring that users can find the best strategies for their trading needs.

However, AvaTrade’s strength is also its drawback. The platform’s complexity can make it appear inaccessible to many potential users.

At the same time, if you’re a trading enthusiast who values comprehensive market analytics over user-friendly interfaces, and is unafraid of a steep learning curve, AvaTrade may be your best bet.

Key rating criteria:

Minimum deposit	Trading fees	Types of investments	ISAs
£100	£0	Forex, stocks, commodities, indices	No

Read my full AvaTrade review.

Pros:

• Quick and straightforward account setup
• Zero-cost options for deposits and withdrawals
• Robust research features

Cons:

• Limited to options
• Steep fees for account inactivity
• Complex user interface

How to Choose the Best Trading App in the UK?

Choosing the best stock trading app in the UK depends on several factors including your trading needs, knowledge, experience, and the amount of money you’re willing to invest.

Along with the key rating criteria I used to rank the apps, here are some aspects to consider:

1. Ease of Use: A user-friendly interface is crucial, especially for beginners. You should choose an app that is intuitive and makes it easy to navigate, buy, and sell stocks.
2. Educational Resources: The best trading apps provide educational resources like tutorials, webinars, articles, and guides. These are especially beneficial if you are a beginner or want to improve your trading skills.
3. Fees and Commissions: It’s essential to understand the fees and commissions involved before selecting a trading app. Some apps offer commission-free trades, while others charge for each trade. Additionally, consider other fees like account maintenance fees or withdrawal fees.
4. Investment Options: Check the range of investment options available on the app. Some apps only offer stocks, while others offer a variety of investment options including ETFs, bonds, forex, CFDs, and even cryptocurrencies.
5. Security: The app should have strong security measures in place to protect your personal information and funds. Look for apps that use encryption and other security measures. Also, ensure that the app is regulated by a reputable body like the Financial Conduct Authority (FCA) in the UK.
6. Customer Service: Good customer service is vital, especially when dealing with financial matters. Look for apps that provide prompt and effective customer support.
7. Reputation and Reviews: Check online reviews and ratings to understand the experience of other users. Trustpilot and similar platforms can be good sources of unbiased reviews.
8. Research Tools: The best share trading apps offer sophisticated tools and features to analyse stocks, including real-time quotes, charting tools, news feeds, and more.
9. Demo Account: Some apps offer demo accounts where you can practice trading with virtual money. This is a great way to gain experience without risking real money.
10. Regulation: The app should be regulated by a recognised authority such as the FCA. This provides an extra layer of protection for your investments.

Remember, there’s no one-size-fits-all trading app. What works best for you may not work best for someone else.

Therefore, it’s crucial to identify your trading needs and goals before choosing a trading app.

What Is Stock Trading?

Stock trading is an investment method that involves purchasing shares in a company and waiting for them to appreciate or rely on their income.

This offers the potential for both growth and income returns.

Companies issue stocks to raise money for planned projects or to operate the business.

Trading stocks takes place on different markets, such as the London Stock Exchange (LSE) or the New York Stock Exchange (NYSE).

Stocks tend to be long-term investments with higher chances of positive returns the longer they are held.

Returns can be generated through speculation or dividend payments. Dividends are regular payments made by companies to investors as a reward for investing in that company. The dividend yield depends on a company’s performance and is determined by its board of directors.

Income investors can invest in companies that pay dividends and rely on the payments over a longer period. Growth investors can purchase stocks in companies that have the potential to increase in value.

Different types of tax apply to different types of income received from investments in the UK. Investing through an ISA protects from income tax, capital gains tax, and dividend tax.

Why Invest in Stocks & Shares?

Investing in stocks and shares comes with a multitude of benefits, which explains why are a popular choice for investors in the UK.

Here are some key reasons to consider:

• Capital Growth: One of the main reasons to invest in stocks and shares is the potential for capital growth. Over the long term, stocks have historically offered significant returns compared to other types of investments, such as bonds or savings accounts.
• Dividend Income: Some companies distribute a part of their profits back to shareholders in the form of dividends. This can provide a steady income stream, particularly attractive to income-focused investors.
• Diversification: Stocks and shares can provide diversification to your investment portfolio. Different stocks tend to react differently to economic events. Owning a variety of stocks can help mitigate risk and balance out your overall portfolio performance.
• Inflation Protection: Over the long term, investments in stocks and shares have been shown to outpace inflation, helping preserve the purchasing power of your money.
• Ownership: Buying stocks means you’re buying a piece of the company. As a shareholder, you have a stake in the company’s success and may have voting rights on key issues.
• Liquidity: Stocks are usually highly liquid, meaning they can be quickly and easily converted to cash when needed. This gives investors flexibility and ease of access to their money.
• Access to New Sectors: Investing in stocks and shares can give you exposure to different industries and sectors, some of which may be poised for significant growth, such as technology or renewable energy.

Different Ways to Trade Stocks in the UK

Let’s explore the different ways to trade stocks in the UK.

Direct investment is the simplest form of stock trading, where you buy and sell shares in a company.

Margin trading, on the other hand, allows you to borrow funds from a broker to buy more stocks than you can afford.

Both have their advantages and disadvantages which I’ll discuss in more detail.

1. Direct Investment

Direct investment into stocks and shares refers to the practice of purchasing individual stocks or shares of publicly traded companies directly from the stock market.

When you invest directly in stocks and shares, you become a shareholder of the company. This means you have a partial ownership interest in the company and are entitled to a share of its profits and assets.

As a shareholder, you may also have the right to vote on certain matters affecting the company, such as electing board members or approving significant corporate decisions.

Direct investment in stocks and shares offers several potential benefits.

First, it provides you with the opportunity to participate in the success of individual companies. If the company performs well, the value of your shares may increase, allowing you to earn a capital gain when you sell them.

Additionally, some companies distribute a portion of their profits as dividends to shareholders, providing a potential source of income.

Moreover, direct investment allows you to have more control over your investment decisions.

Instead of relying on a fund manager to select investments on your behalf, you can choose which stocks to buy and sell based on your research and analysis.

This level of control can be appealing to investors who prefer a hands-on approach and want to tailor their portfolios to their specific investment goals and risk tolerance.

However, direct investment in stocks and shares also comes with certain risks. Stock prices can be volatile, and individual companies can experience financial difficulties or market downturns that may negatively impact their stock value.

It requires careful research and analysis to make informed investment decisions and manage risk effectively.

Additionally, investing in individual stocks may lack diversification compared to investing in a broader portfolio of assets, which can increase the potential for losses.

It’s important to note that direct investment in stocks and shares requires a brokerage account through which you can place trades on the stock market.

Brokerage accounts allow you to buy and sell stocks, provide access to market data and research tools, and facilitate the safekeeping of your investments.

Before buying stocks, learn about investing, know the risks, and think about getting advice from a finance expert or doing deep research.

2. Margin Trading

Margin trading involves using leverage to increase profits or losses when trading in financial instruments, such as Contracts for Difference (CFDs), Foreign Exchange (Forex), Options³, Spread Bets, and Futures.

I’ll explain the advantages and disadvantages of margin trading and how to choose an app that best meets your needs.

Below are the various ways to trade on margin in the UK.

1. Contract for Difference (CFD)

You can access global markets and take advantage of leverage with CFD trading, making it an attractive option for those looking to diversify their investments.

CFDs are a type of derivative trading that allows investors to speculate on the price of stocks, commodities, indices, and currency pairs without actually owning the underlying asset.

CFDs provide traders with the opportunity to take a short-term view of the markets, with the potential for greater returns than traditional share trading. The ability to go long or short on the markets with leverage also makes CFDs more appealing to experienced traders.

CFD trading can be done through the mobile trading app of many UK stockbrokers, allowing investors to access the markets quickly and easily.

However, it’s important to remember that CFDs involve significant risk and investors should be aware of the potential for losses before trading.

For more info on CFD trading, read my comprehensive guide on ‘How to trade CFDs‘ and the ‘Best CFD trading platforms in the UK‘.

2. Foreign Exchange

FX trading, or forex trading, involves buying and selling currencies to profit from their exchange rate fluctuations.

Traders speculate on whether a currency will rise or fall in value compared to another currency. It’s the largest financial market globally, with trades occurring 24/7.

FX trading offers high liquidity and potential profit, but it carries risks due to currency volatility. Traders use platforms provided by brokers to enter positions and can leverage their trades. Success requires knowledge, analysis skills, and risk management.

For more info on FX trading, read my comprehensive guide on ‘How to trade Forex‘ and the ‘Best forex trading apps in the UK‘.

3. Options

Options trading can be a great way to diversify your portfolio and take advantage of short-term market movements. Options provide the ability to speculate or hedge in a market without owning the underlying asset.

With the potential to make a large return on a relatively small capital outlay, options trading can be an attractive option for investors in the UK. Options trading involves buying and selling options contracts, which gives the buyer the right to buy or sell a security at a specific price on or before a certain date.

The buyer of an option has the right, but not the obligation, to buy or sell the underlying asset, and the seller of the option must fulfill the option contract. Options come in two types: calls and puts. A call option gives the buyer the right to buy an asset at a predetermined price, while a put option gives the buyer the right to sell an asset at a predetermined price.

Options trading has the potential to be profitable, but it can also be risky. When trading options, investors should be aware of the potential for losses as well as the potential for gains.

4. Spread Bet

Spread betting allows you to speculate on the price movements of a wide range of financial instruments, such as stocks, indices, currencies, and commodities, without actually owning the underlying asset.

Unlike traditional stock trading, spread betting can be done with leverage, meaning you can control larger positions with a smaller initial outlay. However, the potential for large returns is balanced by the risk of incurring large losses. Therefore, it’s important to understand the risks before you start spread betting.

Spread betting is generally exempt from capital gains tax in the UK. It can be done online or through a mobile trading app, making it an attractive form of investing for those who want to go beyond traditional stock trading.

5. Futures

Futures are a great way to speculate on price movements of commodities and other financial instruments, and you can leverage your capital to potentially make bigger profits – if you’re willing to take the risk.

Futures are highly leveraged investments that involve buying or selling an asset at a predetermined price in the future. Trading futures allows you to speculate on price movements without having to own the underlying asset. They also offer greater liquidity than other types of investments and allow you to hedge your portfolio against risk.

However, futures trading is complex and comes with a higher risk of loss compared to other investments. It’s important to understand the fundamentals of futures trading and have a good understanding of the market you’re trading in before making any investments.

Beginner’s Guide to Trading Stocks

As a beginner, it’s important to understand the basics of stock trading.

1. Master Trading Terminology

In the UK, successful trading necessitates specialised knowledge of market dynamics and terminology.

To excel as a trader, it is essential to grasp key concepts such as ask and bid prices, leverage ratios, price-volume patterns, fundamental and technical analysis, bear and bull markets, lot sizes, margins, spot, forward, and futures markets, as well as various trading strategies like day trading, swing trading, scalping, going short, and going long.

Familiarity with these terminologies empowers traders to navigate the complexities of the market effectively.

2. Decide on Your Trading Strategies

Deciding on a stock trading strategy involves considering several factors. Here are some steps to help you make an informed decision:

1. Assess your goals: Determine your investment objectives, whether it’s long-term wealth accumulation, income generation, or short-term gains. Your goals will shape your trading strategy.
2. Evaluate risk tolerance: Understand your comfort level with risk. Some strategies involve higher risks but may offer greater potential rewards. Consider your financial situation and the amount of risk you are willing to take.
3. Research and education: Gain knowledge about different trading strategies. Study fundamental and technical analysis, chart patterns, indicators, and other tools used in stock analysis. Explore various strategies such as value investing, growth investing, momentum trading, or contrarian approaches.
4. Time commitment: Consider the amount of time you can dedicate to trading. Some strategies require active monitoring and frequent trades, while others are more passive and long-term focused.
5. Market conditions: Take into account the current market environment. Certain strategies may perform better in specific market conditions, such as trending markets, volatile markets, or range-bound markets.
6. Practice and backtesting: Before committing to real money, test your chosen strategy using simulated trading or backtesting tools. This allows you to evaluate its performance and make adjustments as needed.
7. Start with a small position: Begin with a small investment or allocate a portion of your portfolio to the chosen strategy. Monitor its effectiveness and make necessary modifications over time.
8. Regular evaluation: Continuously review and assess your trading strategy’s performance. Be open to adapting and refining it based on market trends, changing goals, or new information.

Remember, no strategy guarantees success in the stock market. It’s important to stay disciplined, manage risk effectively, and remain adaptable as market conditions evolve.

3. Create a Trading Plan

Now that you’ve decided on your trading strategies, it’s time to create a plan that’ll help you reach your goals and maximise your potential profits.

A trading plan should be tailored to your goals and risk appetite, outlining the strategies and techniques you’ll use to achieve success. It should also include a list of stocks you’re interested in trading and the criteria you use to identify the best ones.

Additionally, you should consider setting specific goals that are both realistic and measurable, such as the number of stocks you want to own, the return on investment you expect, and the maximum risk you’ll take.

Once you have a plan in place, you should review it regularly and make adjustments as needed. This will help ensure you’re on track to achieving your goals and taking advantage of the best opportunities.

4. Examine Trading Fees

Carefully consider the trading fees associated with each trading app, as these costs can add up quickly and reduce your potential profits.

eToro and Freetrade offer commission-free trading, while interactive investor and AJ Bell charge fees per trade.

Others have monthly subscription fees.

5. Choose a Tax Wrapper

With a range of tax wrappers available, it’s important to select one that best suits your needs and investment goals. Tax wrappers can help you protect your investments from certain taxes, such as income tax, capital gains tax (CGT) and dividend tax.

For example, an ISA reduces your tax liability for investments made within the ISA. ISA Allowance for the 2023/24 tax year is £20,000. This allowance covers both a Cash ISA and a Stocks and Shares ISA.

Investing through a Stocks and Shares ISA can be beneficial as it protects your investments from income tax, CGT, and dividend tax. This can be a great way to save on taxes and maximise your investments.

Other tax wrappers include trusts and pensions. Each of these has different rules and regulations surrounding the amount of tax you will pay. Researching these options before investing can ensure that you choose the best tax wrapper for your needs.

6. Open a Trading Account

To start investing in stocks, you’ll need to open a trading account. Take the time to compare the features and fees of different trading apps to find the one that suits your needs.

Each trading app has its pros and cons when it comes to trading stocks, so it’s important to consider the cost, stock selection, usability, and research capabilities of each app.

Make sure to evaluate each app to determine which one will best meet your needs.

You will also need to deposit the minimum account required to open an account, this can usually be done by bank transfer, debit and credit cards, and other payment methods.

7. Choose Your Market

Now that you’ve chosen your stock trading app, it’s time to decide which markets to invest in. There are many stock exchanges around the world, each offering different stocks and opportunities.

Before investing, it’s important to understand the different markets available. This will help you make informed decisions and ensure you’re investing in the right stocks.

In the UK, the main stock exchanges are the London Stock Exchange (LSE) and the Alternative Investment Market (AIM). The LSE is the largest stock exchange in the UK, with the most established companies listed. It offers a wide range of stocks, from tech giants to small-cap stocks.

On the other hand, AIM is a smaller exchange typically used for smaller companies or start-ups. Stock prices on AIM are usually lower than those on the LSE, making it a great opportunity for investors looking for more growth potential.

Additionally, many of the stocks listed on AIM are eligible for tax-free investments, such as ISAs.

Ultimately, the stock market you choose will depend on your goals, risk tolerance, and budget.

8. Open a Position

In stock trading, opening a position means taking a specific action based on your market expectations. If you believe a stock’s price will rise, you can open a buy position (going long) to profit from the upward movement.

Conversely, if you anticipate a price drop, you can open a sell position (going short) to potentially profit from the downward movement.

Don’t forget, that there is potential for capital losses.

9. Monitor Your Trades & Close Your Position

Once you’ve opened a position, it’s important to monitor your trades and close your position when the time is right. Many stock trading apps provide tools to help you stay on top of your trades.

You can set price alerts, which notify you when a stock reaches a certain price, or you can look at the company’s financial statements and news coverage. This will help you gauge the stock’s performance and make a decision to close your position when the time is right.

It’s also important to consider the tax implications of trading. Different types of tax apply to different types of income received from investments in the UK.

Investors should be aware of their tax liability when closing a position to ensure they’re maximising their returns.

Knowing the CGT and Dividend Tax rates and allowances can also help in this regard.

How to Pick Stocks

Picking stocks to invest in can be a complex process that requires careful thought, research, and analysis.

Here are some key steps and strategies for picking stocks:

1. Set Clear Investment Goals: Understand what you’re hoping to achieve with your investments. Are you seeking growth, income, or a balance of the two? Your goals will influence the types of stocks you should consider.
2. Understand Your Risk Tolerance: Different stocks come with different levels of risk. Generally, smaller companies and those in volatile sectors or regions are riskier but potentially offer higher returns. Blue-chip stocks (large, established companies) may be slower growing but provide more stability.
3. Do Your Homework: Research is essential. Look at a company’s fundamentals, including its earnings, revenue, cash flow, and debt levels. Other important metrics include the price-to-earnings (P/E) ratio and the dividend yield.
4. Consider the Industry: Certain sectors may perform better than others depending on the current economic cycle. For example, technology and consumer discretionary stocks may perform well during an economic upswing, while utilities and consumer staples might do better during a downturn.
5. Evaluate Management: Good leadership can significantly impact a company’s performance. Research the company’s leadership team, their past performance, and their vision for the future.
6. Examine the Competitive Landscape: Look at the company’s market position. Does it have a competitive advantage or unique selling proposition that sets it apart from its competitors?
7. Diversification: Don’t put all your eggs in one basket. Invest in a diverse range of stocks across different sectors and regions to spread risk.
8. Think Long-Term: Investing in stocks should typically be considered a long-term strategy. Be patient and avoid making impulsive decisions based on short-term market fluctuations.
9. Seek Advice: Consider speaking with a financial advisor or a stock broker. They can provide personalised advice based on your financial situation and goals.

While these strategies can help, there’s no surefire way to guarantee success when picking stocks.

It’s crucial to make informed decisions and regularly review your investments.

Common Stock Trading Fees

Trading stocks can come with various fees, which differ depending on the brokerage you choose, the type of trade you make, and the services you require.

Understanding these charges can help you choose a suitable trading app and manage your investment costs effectively.

Here are some common fees associated with stock trading:

• Commission Fees: Also known as trading fees, these are charges applied every time you place a trade, i.e., buy or sell a stock. They can be a flat rate or a percentage of the trade value. Some online brokers now offer zero-commission trading on certain products.
• Account Maintenance Fees: Some stockbrokers charge a fee for maintaining your trading account, often referred to as an inactivity fee. These are usually charged annually or quarterly if your account falls below a certain level of trading activity.
• Margin Interest: If you trade on margin (using borrowed money from the broker), you will be charged interest on the loaned amount. This rate depends on the loans you have and varies between brokers.
• Deposit and Withdrawal Fees: Some brokers may charge fees when you deposit or withdraw funds from your account, especially if it involves currency conversion.
• Market Data Fees: Some platforms may charge fees for real-time or in-depth market data and analysis tools.
• Platform Fees: Certain brokers may charge a fee for using their trading app, especially if they offer advanced trading features.
• Spread Costs: For brokers offering spread betting or CFD trading, the cost is often incorporated into the spread – the difference between the buy and sell price of a security. This cost is incurred whenever you place a trade.
• Foreign Transaction Fees: If you’re buying shares listed on an overseas stock exchange, you may be charged a foreign transaction fee.
• Dividend Handling Fees: Some brokers charge a fee to process dividend payments from the companies whose shares you own.
• Dormant Account Fees: If your trading account is inactive for a certain period, you may be charged a dormant account fee.

Pay attention to fees as they can impact your investment returns, it’s vital to understand them before you start trading.

Different brokers have different fee structures, so compare your options carefully to ensure you choose one that aligns with your trading habits and investment goals.

Tax on Investments UK

In the UK, there are several ways in which your investments might be taxed, primarily through capital gains tax, income tax, and stamp duty.

Here’s a summary of each:

1. Capital Gains Tax (CGT): When you sell or dispose of an asset that’s increased in value, you’re subject to capital gains tax on the profit, not the total amount you received. This includes the sale of stocks, bonds, or property. However, there is an annual tax-free allowance, known as the Annual Exempt Amount. For the tax year 2023/24, this is £6,000, which means you can realise gains up to this amount across your entire portfolio without having to pay CGT. Any gains above this threshold are taxed at 10% for basic-rate taxpayers and 20% for higher and additional-rate taxpayers, but these rates can vary depending on the type of assets.
2. Income Tax: Any income you receive from your investments, such as dividends from shares, interest from bonds or rent from property, may be subject to income tax. There is a tax-free Dividend Allowance, which is £1,000 for the 2023/24 tax year. Any dividends received above this threshold are taxed at your respective rate: 8.75% for basic-rate taxpayers, 33.75% for higher-rate taxpayers, and 39.35% for additional-rate taxpayers.
3. Stamp Duty: When you buy shares in a UK company directly, you usually pay 0.5% Stamp Duty Reserve Tax on the transaction. There’s no charge if you buy shares in a company incorporated outside the UK or through platforms like ETFs and OEICs.

It’s also worth noting that investments held within an Individual Savings Account (ISA) or a pension are largely exempt from these taxes.

ISAs, in particular, can offer a tax-efficient way to save or invest, with an annual allowance of £20,000 for the tax year 2023/24.

If you’re confused about tax laws and the amount of tax you need to pay, my best advice is to get guidance from a tax professional or financial advisor.

Commonly Asked Questions

Here I’ve answered some popular questions people have about trading in general, trading apps, and using them in the UK.

What are the best free trading apps UK?

In the UK, several trading apps allow you to invest with no trading fees, and among the most popular are eToro, Freetrade, and InvestEngine.

Here’s an overview of each:

1. eToro: Known for its social trading features, eToro allows you to interact with other traders, follow their strategies, or even copy their trades. It offers commission-free trading for stocks and ETFs. However, you should be aware that eToro does apply other fees such as withdrawal fees and inactivity fees, so it’s not entirely fee-free.
2. Freetrade: Freetrade offers a user-friendly trading app ideal for beginners, with commission-free trades on UK and US stocks and ETFs. They offer a free account, but also a Freetrade Plus account for £11.99 per month that provides access to more stocks and features such as limit orders. Again, while trading is commission-free, there may be other costs such as a foreign exchange fee for US stocks.
3. InvestEngine: This is a relatively new app that combines robo-advisory services with a DIY investing platform. They offer commission-free trades on ETFs. You can either build and manage your portfolio for free or use their managed portfolio service for a low annual fee of 0.25%.

All three apps let you invest with little money, making investing easier. But even if trades are free, watch out for other fees like foreign exchange or withdrawal charges.

Are trading apps worth it?

Trading apps can be worth it, particularly for those who value convenience, flexibility, and accessibility in their investment activities.

They allow investors to manage their portfolios from the palm of their hands, making it simpler to react to market trends and events swiftly.

Many trading apps also offer learning resources, analytics, and social trading features, equipping users with valuable tools to make informed decisions.

Moreover, a growing number of these apps are offering commission-free trading, which can lower the cost of investing, particularly for frequent traders.

Can I really make money from trading?

Yes, it is possible to make money from trading.

Many investors have made significant profits from well-timed trades and thoughtful investment strategies, while many have lost out.

It’s essential to understand that trading is not a guaranteed way to make money.

The financial markets can be unpredictable and influenced by numerous factors, including economic indicators, corporate earnings, and geopolitical events.

While some traders might see significant returns, others may experience losses.

Furthermore, successful trading often requires a deep understanding of the markets, patience, a well-planned strategy, and the ability to manage risk.

High-frequency trading and trading on margin can amplify gains, but they can also magnify losses.

It’s also worth noting that trading can be time-consuming, as it often requires constant market monitoring and timely decision-making.

Therefore, while it is possible to make money from trading, it’s not a guarantee and should be approached with careful consideration and preparation.

Can I teach myself trading?

Yes, you can self-learn trading through a variety of resources available online, such as courses, webinars, blogs, and trading simulators.

However, trading is complex and requires a deep understanding of financial markets, as well as discipline, patience, and risk management skills.

Although self-learning is a great starting point, it is recommended to also seek mentorship from experienced traders and participate in trading communities.

Remember, trading is not only about gaining knowledge but also about continuously applying and learning from your experiences.

How to manage risk when trading?

Managing risk in trading involves several important steps:

1. Educate Yourself: Knowledge is the first line of defense. Understand the markets, different investment types, and how they work. Learn about fundamental and technical analysis to make informed decisions.
2. Diversify Your Portfolio: Don’t put all your eggs in one basket. Spread your investments across different asset classes and sectors to mitigate risk.
3. Set a Budget: Determine the amount of capital you are willing to risk on each trade. A common rule of thumb is not to risk more than 1-2% of your trading account on any single trade.
4. Use Stop-Loss Orders: These can automatically close your trading position if the market moves against you to a certain extent. It’s an effective way to limit your potential losses.
5. Regularly Review and Adjust: Markets change, and so should your trading strategy. Regularly review your investment performance and adjust your strategy based on market trends and your financial goals.
6. Avoid Emotional Trading: Decisions based on fear or greed can lead to poor trading choices. Stay disciplined and stick to your trading plan.

What is the best trading app in the UK?

Here are the best trading apps in the UK:

1. eToro – Commission-free stock trading, 3,479 instruments
2. Plus500 – Award-winning, CFD trading, 5,500 instruments
3. Freetrade – Commission-free trading, free share upon signup, 6,000+ instruments
4. interactive investor – Large selection of investment options, 40,000+ instruments
5. InvestEngine – Low cost, simple app, 580+ ETFs
6. AJ Bell – Good for frequent traders, 15,000+ instruments
7. Pepperstone – CFDs & spread betting, 2,342 instruments
8. AvaTrade – Low spreads & fees, 1,260 instruments
9. Interactive Brokers – Advanced trading tools, 8,500 instruments
10. Saxo Markets – Powerful market research, SaxoTraderGO, advanced tools, 70,000 instruments
11. IG – Comprehensive stock trading app, in-depth education, 19,537 instruments
12. Fidelity – ISAs & SIPPs, international broker, 5,000 instruments
13. XTB – Top-notch customer service, commission-free real stocks, 6,010 instruments
14. Hargreaves Lansdown – Premium investment & trading platform, 15,000+ instruments
15. Capital.com – Web trading platform, CFD broker, 3,119 instruments

Pros & Cons of Stock Trading

As an investor, it’s important to understand the pros and cons of stock trading before committing to the market.

Pros of Stock Trading:

1. Potential High Returns: One of the major advantages of stock trading is the opportunity to earn significant returns. If you choose the right stocks and manage your investments wisely, you can see substantial growth in your portfolio.
2. Liquidity: Stocks are highly liquid tradeable assets, meaning you can easily buy and sell shares whenever the market is open. This allows for flexibility and access to your funds when you need them.
3. Ownership and Dividends: When you buy stocks, you essentially become a part-owner of the company, giving you a claim on part of the company’s assets and earnings. Some companies also distribute dividends to their shareholders, providing an additional income stream.
4. Diversification: The stock market offers a wide range of sectors and companies to invest in, allowing for portfolio diversification which can help mitigate risk.

Cons of Stock Trading:

1. Market Volatility: The stock market is subject to fluctuations⁴, which can cause the value of your investments to decrease. Market volatility can lead to potential losses, particularly if you need to sell your stocks during a downturn.
2. Time and Effort: Successful stock trading requires significant time and effort to research and monitor investments, as well as an understanding of complex financial reports and market trends.
3. Emotional Stress: The volatility of the stock market can lead to stress and emotional trading decisions. It requires discipline and emotional control to stick to a trading plan and not be swayed by market sentiments.
4. Potential Losses: As much as there is potential for high returns, there is also a risk of significant losses in stock trading, especially if you engage in high-risk strategies like day trading or trading on margin. It’s important to only invest money that you can afford to lose.

FAQs

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Sources:

1. https://investmenttrends.com/industry-research/award-winners/ ↩︎
2. https://appradar.com/blog/best-investment-apps-2022 ↩︎
3. https://mitsloan.mit.edu/ideas-made-to-matter/retail-investors-lose-big-options-markets-research-shows ↩︎
4. https://www.chicagobooth.edu/review/why-are-financial-markets-so-volatile ↩︎