Trading 212 Review 2024: Pros & Cons

Established in Bulgaria in 2004 and later expanding to the UK while maintaining entities in Bulgaria and Cyprus, Trading 212 gained prominence through its shift to commission-free pricing. Boasting around 2.5 million users as of 2024, with a significant surge during the Gamestop saga, the platform witnessed rapid growth from 50,000 to 1.5 million users in just two years.

With over 14 million downloads of its mobile application, Trading 212 offers a user-friendly trading platform for CFD and share trading, featuring a diverse range of forex pairs. Despite its well-designed interface and extensive symbol options, the platform falls short due to a lack of advanced trading tools and limited research offerings.

What is Trading 212?

Originating in Bulgaria in 2005 and entering the UK market in 2016 as a forex trading app, Trading 212 made waves by introducing zero-commission share trading in 2017.

The mobile app gained immense popularity in the UK, accumulating over 15 million downloads globally and receiving over 350,000 customer reviews. Securing additional funding in 2021, the platform focuses on continued business growth. Trading 212's versatile app allows users to invest in shares, ETFs, contracts for difference, gold, cryptocurrencies, and an ISA.

For those new to stock or CFD trading, the platform offers a virtual £50,000 for practice. Account opening is accessible through the website or smartphone app, requiring personal details, an identity document, and a selfie for verification. Trading can commence once the account is approved, with a minimum age requirement of 18.

Trading 212 Fees Summary:

Before delving into the specifics of Trading 212's features , let's explore the fee structure of this platform in this Trading 212 review .

1. Stocks and ETFs:

   • Buying and selling: Free (No commission fees)
   • Custody fee: None
   • Inactivity fee: None
   • Bank transfer deposits: Free

2. Currency Conversion Fee:

   • 0.15% for trades in a different currency
   • Low compared to industry standards

3. CFD Fees:

   • Spread fees apply when trading CFDs
   • Spread fees vary depending on the asset and market liquidity
   • Details available on the Trading 212 website

4. Deposit Fees:

   • Bank transfer deposits: Free and instant
   • Credit/Debit card deposits (up to £2,000): Free
   • Credit/Debit card deposits (over £2,000): 0.70%
   • Apple/Google Pay deposits (over £2,000): 0.70%

5. Withdrawal Fees:

   • None

6. Other Considerations:

   • No average spread data published for CFDs and forex, which may impact transparency.
   • Different accounts available (Invest for shares, CFD for CFDs) with varying minimum deposits.

Note: CFDs involve a high risk of losing money due to leverage, and users should carefully consider their understanding of CFDs and the associated risks.

Is Trading 212 Safe?

Trading 212 prioritizes safety and regulatory compliance, making it a relatively safe platform for investors. Here are key safety considerations:

• Regulation: Authorized and regulated by the Financial Conduct Authority (FCA) . Entities in the UK, Bulgaria, and Cyprus, each regulated under their respective jurisdictions.
• Financial Services Compensation Scheme (FSCS): Part of the FSCS , providing protection up to £85,000 in case of insolvency.
• Asset Protection: User investments, particularly stocks, are held in the investor's name, providing an additional layer of protection.
• Insurance: Trading 212 holds insurance with Lloyds, covering customers up to €1,000,000, exceeding typical industry standards.
• Financial Status: Reports suggest the company is highly profitable, contributing to its stability.
• Safety Measures: Implements security measures to identify bugs and ensure customer protection.

However, certain concerns include:

• Entity Reputation: The Cyprus entity (CySEC) has a reputation that may raise concerns among investors.
• Share Transfer Limitation: Inability to transfer shares to another broker raises questions about how shares are handled.

While Trading 212 demonstrates several safety measures and regulatory adherence, users should remain vigilant and consider their risk tolerance, especially with regards to the reputation of specific entities.

Features and Products of Trading 212

Accounts:

• Invest Account: Allows investment in stocks and ETFs. No other instrument options available.
• CFD Account: Provides access to Contracts for Differences (CFDs), suitable for more experienced traders.

Investment Options:

• Stocks and ETFs: Over 7,000 stocks available, covering various global exchanges.
• ETFs: Thousands of Exchange-Traded Funds representing diverse themes and industries.
• Indices: Trade groups of shares representing stock exchanges, including ETF options.
• Commodities: Offers a range of physical goods like gold, silver, oil, and more.
• Currencies (Forex): Comprehensive coverage of currency pairs for foreign exchange trading.
• Cryptocurrencies: Unfortunately, Trading 212 does not support crypto trading.

Account Types:

1. General Investment Account (GIA): Standard account for buying stocks, shares, and funds.
2. Stocks and Shares ISA: Tax-free account for investing in stocks, shares, and funds.
3. CFD Account: Allows trading of CFDs, suitable for day traders, covering stocks, funds, commodities, and currencies.
4. Pension (Not Available): Trading 212 does not offer a Self-Invested Personal Pension (SIPP) account.

Fees:

• Commission-Free Trading: No fees for buying stocks and ETFs.
• Currency Conversion Fee: 0.15% for trading in a different currency.
• Spread Fees: Common with CFDs, varies based on the asset.
• Deposit Fees: Free for bank transfers; 0.70% for card deposits over £2,000.
• Withdrawal Fees: Not specified.

Risk Considerations:

• CFDs are highlighted as high-risk instruments, with about 70% of users losing money.
• Currency conversion fees exist for trading in different currencies.

Account Summary:

• Trading 212 CFD: Allows trading stocks, forex, indices, commodities, and cryptocurrency using CFDs.
• Trading 212 Invest: Enables commission-free investing in over 10,000 shares and ETFs.
• Trading 212 ISA: UK users can hold shares and ETFs in a tax-free wrapper.

Key Features:

• Minimum Deposits: £10 for CFD, £1 for Invest and ISA.
• Negative Balance Protection: Available for CFD trading.
• 24/7 Support: Customer support is accessible round the clock.
• Instant Trades: Quick execution of trades.
• Fees for Different Accounts: Varying fees for closing positions, currency trades, and deposit fees.

Trading 212 provides a user-friendly platform with a wide range of investment options, making it suitable for various investors, though it emphasizes caution for those considering CFD trading.

Pros of Trading 212:

1. Commission-Free Trading: No trading commissions for stocks and ETFs, reducing costs for investors.
2. Diverse Investment Options: Access to a wide range of investment choices, including stocks, ETFs, commodities, and forex.
3. Multi-Currency Support: Allows trading in multiple currencies, providing flexibility for diverse currency preferences.
4. Interest Benefits: Opportunity to earn interest on uninvested cash and through share lending programs.
5. Tax-Efficient ISA Account: Offers a tax-free Stocks and Shares ISA for UK users, ensuring tax efficiency.
6. CFD Trading: Availability of Contract for Differences (CFD) trading for experienced traders.
7. Excellent Features and Customer Service: Intuitive platform design, great mobile app, and responsive customer service for a positive experience.
8. Wide Asset Range and Protections: Extensive symbol choices, support for exotic FX pairs, indemnity insurance, and free trading add value and security.
9. Interests: Benefit from a generous 5% return on your uninvested GBP cash per annum, paid daily.

Cons of Trading 212:

1. High-Risk Nature: Trading 212 involves a high-risk factor, particularly with CFDs, which may not be suitable for all investors.
2. Limited Investment Options: Absence of mutual funds, personal pension options, and crypto trading, limiting investment diversity.
3. Not Ideal for Beginners: Despite being beginner-friendly, lacking certain features like copy trading and comprehensive educational resources.
4. Mobile App Limitations: Lack of news headlines on the mobile app, restricting access to important market information.
5. Basic Research Features: Research on the web platform is limited, offering only snippet-like updates instead of in-depth articles.
6. Charting Features for Day Traders: Charting features, especially for technical analysis, are perceived as basic for experienced day traders.
7. Leverage Restrictions: Some instruments have leverage restrictions, potentially limiting strategies that rely on high leverage.
8. No Copy Trading or Algorithmic Support: Absence of copy trading and algorithmic/automated trading features, which may deter advanced traders.

Customer Support:

Exploring the customer support landscape, let's assess the positive aspects and concerns associated with the service offered by the platform.

• Positive Aspects:

  • Customer support is available 24/7.
  • Quick response time, averaging just 29 seconds for live chat within the account.
  • Support team is described as super friendly.
  • A comprehensive help center with answers to various questions, including platform usage and general trading.

• Concerns:

  • Live chat may require interacting with a chatbot before connecting with a human, which can be time-consuming.
  • Lack of telephone support and a peer-supported help forum.
  • Email communication may not provide immediate answers.

Overall Assessment: Trading 212's customer support is generally praised for its responsiveness and friendliness, especially through live chat. However, the process of connecting with a human and the absence of telephone support are noted as drawbacks.

Improvements in these areas could enhance the platform's support services to better compete with alternatives, particularly in comparison to CMC Markets' award-winning customer service.

User Ratings: Trading 212's app is highly rated, with a score of 4.6 out of 5.0 on the Apple Store and 3.9 out of 5.0 on Google Play. Being the most downloaded trading app indicates its popularity among customers.

Trustpilot reviews also contribute to its positive reputation, earning an 'Excellent' rating with a score of 4.6 stars out of 5.0 from over 23,000 reviews. Users appreciate the app's design, user-friendliness, and its appeal to beginners. Some negative reviews highlight issues related to account verification and fund withdrawal.

Final Thoughts:

Trading 212 offers commission-free trading, making it an attractive option for investors. However, several significant issues, such as default share lending, limited access to certain ETFs, and the inability to transfer shares out, raise concerns. The broker faced challenges during its recent growth phase, affecting its overall reliability.

On the positive side, Trading 212 provides a user-friendly platform with low fees, including an attractive currency conversion fee and minimal spread fees for CFD trading. The platform allows users to earn interest on uninvested cash and lend out shares. The option to invest in a tax-free Stocks and Shares ISA adds to its appeal. Additionally, the customer service is praised for being responsive.

In conclusion, Trading 212 caters well to beginners with its simplified platform, but its research offerings lack depth, potentially leaving experienced traders wanting more. The ease of access to CFDs poses risks for less sophisticated investors. While it serves as a good option for experienced share traders, beginners are advised to practice with the £50,000 portfolio to understand the risks associated with shares and CFDs.

Consider exploring alternatives like eToro and FreeTrade to ensure a well-rounded comparison of commission-free trading platforms, weighing features and limitations to align with your investment preferences.