Is Trading 212 a Scam?
Founded in 2004, Trading 212 is a leading UK-based online brokerage known for providing zero
commission trading to retail investors, mainly via its mobile app. The firm specializes in the
online brokerage of CFDs, – a contract-for-difference is a financial instrument settled on the
difference in the price of an underlying during a period – these products enable easier access
to complex financial instruments such as futures.
Trading 212 claims a total of £3bn in AUM and 1.5 million trades executed daily; it is registered
with the financial authorities of the United Kingdom, Cyprus and, Bulgaria.
Although the original primary line of business was CFD trading, now presented as the ‘Trading 212 CFD’
account, the firm now offers long-only investment management for retail investors via its Invest
and ISA products; these long-only services offer access to global equities and ETPs with
zero-commission and low spreads.
Is Trading 212 Safe?
Trading 212 is considered to be safe and is overseen by the UK FCA with license 609146.
Opening an Account
Trading 212 requires ID and address verification as well as your local tax code to sign up. Some users
might also require a UK DSS number.
Account registration is simple and can be done via a mobile device. Trading 212 sadly does not
have live customer service and can only be contacted via an online form.
Trading 212 Pros
+ Great UI, easy to navigate and setup
+ Large selection of equities and CFDs, especially FX pairs
+ Automated allocation of deposits into a pre-set portfolio via pies & auto-invest
+ Amazing mobile App
Trading 212 Cons
(-) No in-depth portfolio analytics
(-) No research insights or special indicators
(-) CFDs don’t have an adjustable margin
(-) No customer support, hotline or live chat
Trading 212 Fees
| | Min. Deposit | Min. Wire | Min. Withdrawal | Overnight Interest | Currency conversion charge | Min Order | Commission |
|---|
| Invest | 1 USD | 10 USD | 1 USD | No Fees | 0.15% | 1 USD | None |
| ISA | 1 GPB | 10 GPB | 1 GPB | No Fees | 0.15% | 1 GPB | None |
| CFD | 10 USD | 10 USD | 10 USD | Yes | 0.5% | N/A | None |
Margin Structure
Forex: Major pairs – 3.33%, other – 5%
Commodities: Gold – 5%, other – 10%
Stocks: 20%
Indices: Base – 5%, non-major – 10%
Account Types
Trading 212 offers three types of accounts:
Invest Account
The Invest account is a traditional long-only stock and ETP brokerage platform. The user has
access to thousands of listed companies across 9 countries, the US and some European markets,
as well as access to a large selection of ETPs.
The Exchange Traded Products offered are Equity Funds, Inverse Funds, REITs, Commodity Funds
and, Fixed-Income Funds. Although many traditional ETFs such as SQQQ are absent in the Invest
account, the selection is large and catered towards passive investors, not traders.
The Invest account caters to investors of all sizes thus, offering fractional share ownership,
unlike some traditional brokers.
A great feature of the platform is ‘Pies & Auto-invest’ a feature that allows you to
automatically deposit and fund a pre-determined portfolio. This is quite a handy feature for
people looking to invest long-term into ETFs and can buy a targeted percentage every time they
deposit more money. This functionality also has a social feature where users can share pies for
others to automatically copy.
All in all, Trading 212’s Invest Account offers great flexibility for semi-passive and passive investors that are starting without many funds, to easily allocate money to a diverse range of low and medium risk financial products.
ISA Account
The ISA Account offers the same functionality as the Invest account, however it is tax-exempt
under UK regulation for deposits of up to £20,000 annually.
This is a specific account type that can only be accessed by UK tax residents and therefore, might also have restrictions on certain ADRs that might be tradable in the normal Invest account.
CFD Account
The CFD account is the margin trading platform of Trading 212 and differs significantly from
the Invest and ISA products. The CFD account allows access to equities in 21 markets, including
the US, EU, Canada, Japan and, Hong Kong, Index ETFs, Currencies and Commodities.
Here traders can go both long and short in any of these products with margin; unlike other
platforms margin on Trading 212 CFD is built into the product, the rate can range from 30% to 5%
margin required, this means that one can be leveraged up to 20 times. This is especially
important to consider as the fund's rate is calculated per trade, per night meaning traders have
an incentive to close their trades before the end of the day.
The CFD account does not have features such as Pies & auto-invest and seems to specifically cater
to day-traders; it does, however, have a great selection of commodities and currency pairs, most
of which you will be hard-pressed to find on other platforms.
All in all, the Trading 212 CFD is a good solution for more experienced traders looking to trade intra-day with leverage on an approachable online platform.
Investment Products
The Trading 212 ecosystem offers a diverse array of financial products catering to both investors
and traders alike. Most common are Equities, which cover 21 global listing locations and in total
offer thousands of firms to invest and trade in; however, not all are available through the
Invest account.
Exchange-Traded Products (ETPs) are also a big part of the platform, most are available via the
Invest account, which is reasonable as these are popular products among passive investors, and
indeed the depth and selection are phenomenal for an online brokerage. Trading ETFs with margin
through the CFD account offers a more limited selection but there are still plenty of good
options.
Commodities are exclusively traded via the CFD account and can be accessed as CFDs on the futures
contract, the selection includes Crude, Metals, Livestock, Seeds and more. Users of the Invest
account can access commodities using commodity ETPs.
Finally, currencies are a major strength for the CFD account, as there is an incredible number
of pairs, including major, minor and exotic currencies, all can be traded with favourable margins
and since it is a CFD platform there is no issue with liquidity.
Trading 212 offers a great range of investment products and the CFD account seems built around FX and commodity trading with the Invest account is perfect for passive investing through equities and ETPs.
Competitors
A U.S. brokerage firm called Firstrade welcomes U.K. customers, and charges $0 commission on all
products. Learn more...
Try Firstrade
Open Firstrade Account
Product Research
The Trading 212 online interface features the bare minimum for product research into equities and
ETPs. For equities information such as business description, market information, financial
results and ratios are provided; although the fundamental analysis information isn’t too
descriptive, the platform does provide many automatically calculated ratios.
For ETPs, the research is non-existent, with only product information visible, at least REITs are
treated as equities and their financial information is disclosed.
Trading 212 does not have insightful research and information on the financial products it brokers.
Online Platform
The Online platform is generally well designed and easy to navigate, this is true for Invest and
CFD. However, as we mentioned previously, information is rather scarce, and Trading 212 mainly
provides price-related information, with candle charts being the focal point of most screens.
The charting widgets on the platform are indeed quite good, better than most other brokerages, as they also provide easy to use studies and parameters, however, there is a lack of depth in what is shown. This might be less of a problem for passive investors who invest in known products continuously than for a trader who might need more than price to determine his strategy.
In this regard, the Online platform lacks to fully accommodate those with a CFD account but is enough for those without one.
Mobile Platform
Trading 212 is most widely known due to its easy to use and intuitive mobile application, available
for both IOS and Android. The platform suffers from the same issues that we mentioned previously,
namely lack of in-depth information, however, it is incredibly simple to use which makes it one of
the best margin trading apps on the market.
All of the functionality of the Online platform is packed into the app, including the auto-invest
and social features.
Arthur Chachuna is professional personal finance blogger, and the owner of Brokerage-Review.com.
He has been an avid investor for 23 years, and has background in both applied math and programming.
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