Trading 212 is the European answer to Robinhood. If you are unfamiliar with Robinhood, it is an American stockbroker that offers fractional shares with zero commissions.
Trading 212 is the first European stockbroker that offers fractional shares. Trading 212 has no fees, no commissions, no inactivity fees or other costs when trading stocks, ETFs and fractional shares. Trading 212 has regular stocks and ETFs and CFD trading with forex, stocks, commodities, and indices.
Trading 212 is a very interesting platform compared to so many other European brokerages. Throughout this post, all relevant information about the platform will be unveiled in a digestible way.
Trading 212 Overview
Trading 212 is a platform for stocks, ETF (called “Invest” account) and CFD trading (called “CFD” account). The CFD side of the platform offers stock, commodity, forex and indices trading. The CFD trading is commission-free and only 0,5% currency exchange fees.
The “invest” side of the platform offers free fractional share, stock and ETF investing. There is zero commissions and zero currency exchange fee. The platform is easy to use and requires little knowledge to use.
Trading 212 is registered in England and Wales and therefore authorized and regulated by the FCA (Financial Conduct Authority). Furthermore, Trading 212 is protecting investor funds in separated bank accounts and are covered by the Financial Services Compensation Scheme (FSCS) for up to £85.000.
- Fractional Shares and ETFs.
- No commissions, no fees.
- +3000 global stocks and ETFs.
- Many deposit options.
- User-friendly Interface (both on App and browser).
- Offers a demo account with €50.000.
- 24/7 live support.
- Been prone to be unresponsive/crash during peak times (E.g. when Tesla went to the moon at the end of January 2020).
- Unclear about spread (only relevant if you use CFD trading).
- Can be too simple at times.
Trading 212 Platform Experience
Whether the intention is to use their mobile app or browser, Trading 212 is an all-around easy to use platform. To get some hands-on-experience I deposited a modest sum of money to try and grab some stocks.
Firstly, I wanted to try how easy it was to register. Secondly, I wanted to experience the ease of depositing money. Lastly, I wanted the overall experience when using the platform, such as investing and following my investments.
From a user perspective, this is a 9 out of 10 platform. I have had zero issues using the platform. I just want to remind you that I only used the “Invest” and not the “CFD” account. So I have no experience with the CFD side of the platform.
The registration process was easy and is just like any other platform. During the sign-up process you enter all your personal information, provide proof of identity and residence and then you have an active account.
After registering (which you can do here) I went on to deposit some money. There are 4 different options: Credit/Debit card, Google Pay, Skrill, and Bank transfer.
I ended up using the bank transfer option. It is simple and convenient. Using Google Pay or credit/debit card would make the money near-instant available. Revolut automatically rejected the transfer using a credit card, therefore, I made a normal wire transfer (also using Revolut) without any problems. I am unaware if this is a problem that only happened to me, or if it applies to anyone.
The process of using a card is very straight forward and more or less just like when shopping for clothes online. The bank transfer takes a bit longer (2 days for me), but Trading 212 gives clear and easy to understand instructions on which bank account to transfer the money to.
Unlike Degiro, Nordnet and other brokerages, the investing on Trading 212 is very simple. When investing on Nordnet you find the share/ETF you want, enter the number of shares you want and press buy. But only to find out that you have exceeded your funds because there is also a commission fees.
Using Trading 212 is literally finding the share/ETF you want, enter the amount and press buy. You can even buy fractional shares, so you don’t have leftover money.
Let me give you an example:
You want to purchase Realty Income stocks because you value it as a good stock. You have €625 ($700), and when you want to purchase Realty Income it costs €67 ($75). This means you can purchase €625 / €67 = 9,3 shares. This also means that you now have €22 in your account being unused. However, using Trading 212 you can use that €22 and purchase for 0,3 shares of Realty Income.
I tried purchasing both a full share and a fractional to see if there was any difference in the procedure. However, it was exactly the same buying a fractional share as buying 1 regular share.
The portfolio overview is nice and simple. There is a total overview of my portfolio, invested funds, account worth, and the performance of each stock. However, this is also where it is a little too simple. There is no overview of the average purchasing price, so it can be difficult to see the average and weighted performance (when buying the same stock at different prices) of the stocks.
The portfolio overview is very nice when having fewer assets. However, when your portfolio starts to get 15, 25 or even 50 different assets it will be very difficult to see which stock is which in the circle diagram. However, it is possible to use the percentage allocation to balance the portfolio.
Trading 212 Invest
The use of 2 separate accounts is due to the investments offered. The “Invest” account offers “real” stocks, ETFs, and fractional shares. The “Invest” account is what you would use if you were to invest long-term.
The “Invest” functions as any other broker, except you can buy fractional shares (which is not normal on European brokers). There is over 3000 stocks and ETFs to choose from. The stocks and ETFs are from all over the world (US, UK, Switzerland, Germany, and much more).
“Invest” Costs and Fees
- Deposit fee: €0
- Withdrawal fee: €0
- Open position to next day: €0
- Currency exchange fee: €0
- Commission fee: €0
Trading 212 CFD
In the CFD side of the platform, there are over 1800 instruments to invest in. The different 1800 instruments are in the 4 categories: Forex, stocks, commodities, and indices. The margin requirements for retail investors is between 5%-20%. Whereas the margin for professional clients is between 0,33%-10%.
The CFD trading offers Stop Loss and Take Profit options. Furthermore, they offer negative balance protection.
Currently, Trading 212 allows for up to 1:500 leverage (for professional clients). However, there is no fixed amount of leverage, it depends on their products and margin requirements.
CFD Spread and Fees
The spread is typically floating (they have some instruments with fixed spread).
- Deposit fee: €0
- Withdrawal fee: €0
- Open position to next day: Daily interest charge, depending on the asset (More information found on Trading 212 under CFD terms)
- Currency exchange fee: 0,5%
- Commission fee: €0
Regulation and Licensing
Trading 212 is regulated and authorized by the FCA. Therefore, Trading 212 is safe as it is fully compliant within the UK legislation of investment schemes. The full list of permissions can be found on the Financial Conduct Authorities website (here).
Trading 212’s permissions cover obligations to protect investor funds (Cannot be lent, invested or used to finance their own business), arranging investment deals (Shares, CFD, Futures, Options, Forex, Spread bets, etc), arranging safeguarding and administration of assets.
In short, Trading 212’s permissions allow them to have CFD, ETF, Stocks, Futures, etc.. Furthermore, they are allowed to safeguard and administer the assets.
In addition, the regulation requires Trading 212 to keep investor’s funds separately to their own finances. these separate kept accounts are protected by FSCS (Financial Service Compensation Scheme) of up to £85.000 per investor.
Lastly, Trading 212 is audited by Grant Thorton within their business, finance, IT processes, and company governance.
It can therefore be said that Trading 212 is heavily regulated and properly audited by third-parties.
You can sign up on trading 212 if you ain’t from one of the following countries: American Samoa, Belgium, Democratic People’s Republic of Korea (DPRK), Ethiopia, Guyana, Iran, Pakistan, Serbia, Sri Lanka, Syria, Trinidad and Tobago, Tunisia, Turkey, United States of America, United States Virgin Islands and Yemen.
Trading 212 does not allow investors from the stated countries due to sanctions that have been imposed by regulators and company policies.
Mobile App for Trading
Trading 212 offers an app for iOS and Andriod. The platform is very user-friendly and does not require any extensive knowledge to use. The app offers simple overviews and advanced technical analysis tools (also fee).
The app can be used just as easy as the browser and vice versa. Using the app is easiest for an account overview, and the browser is a bit easier to use for purchasing.
The use of a demo account is very useful for new investors wanting to learn and understand investing. Whether it is to practice CFD techniques or to understand general equity investing.
The account is €50.000 and can be used for both the “CFD” and “Invest” account options. This means that if you are an equity investor wanting to try CFD trading, you can use the demo account to try CFD trading before blowing your own money.
Knowledge Sharing and Analysis
Trading 212 has a section dedicated to inform investors of recent and upcoming financial events. This could be news about gross domestic product growth/decrease, interest rate deductions, etc.
It also covers economic calendar which includes release time of unemployment rate reports, gross domestic product reports, manufacturing PMI reports, and many other reports that affect the global and local economy.
The last section is the daily analysis of different commodities and forex pairs. Among these analyses are silver, gold, crude oil, USD/CAD, etc.
Sadly, there is no economic calendars for the financial statements of companies. Neither is there any news related to companies.
Trading 212 is a good platform for investors looking for equity investing (stocks and ETF). It is easy to use and there is no barrier to entry due to the fractional shares.
If you are a CFD trader, you should proceed with caution as the spreads are floating and not very transparent. Therefore, you must know what you are doing. However, if you are only interested in investing in regular shares this is no problem.
“CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 80% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money”.