Until recently, the CFD and investing platform Trading 212 has sat comfortably as the UK’s most popular trading and investing app, with Freetrade as the friendly, unintimidating start-up, its accessible pink branding a stark contrast to the austere black and blue of T212. Established just 2 years ago, Freetrade have worked to tempt both curious newbies and experienced investors away from the likes of Hargreaves Landsdown, AJ Bell and Degiro, all of which charge between £1 and £10 per trade, heralding a new era for the way we trade, and the consumer base it appeals to. As a result, T212 is resting less easily in pole position.
Trading 212 and Freetrade are 100% free (the clue’s in the name for Freetrade). The only fee users should be aware of is the foreign exchange fee, which you’ll pay on both Freetrade and Trading 212 if you’re investing in Wall Street or Euro stocks.
One advantage of Trading 212 is that it has much lower exchange fee. But considering it’s a negligible amount, cost of use is out of the picture as a factor in choosing between the two platforms. So how do you figure out which is the better option? Certainty is crucial, given how ease of use, speed of transaction and assisting features can directly impact the money you stand to make (or lose).
The pros and cons of Trading 212
Pro: Starting with arguably the biggest pro – Trading 212 offers limit orders, stop losses, and an S&S ISA all for free. With Freetrade, despite the name’s implication, you can only obtain these perks via Freetrade Plus, a paid upgrade costing £9.99 per month. Many experienced investors would argue the ability to set stop losses is indispensable for safe trading. Freetrade does offer an ISA product outside of the Plus membership, but it’ll still set you back £3 per month.
Con: Trading 212 is so user-friendly you can start using it without any real research. Sounds like a pro, but it’s so easy to use that it can lull a beginner into a false sense of security. Along with the simplicity and intuitiveness of this platform comes a real danger you may feel too comfortable too quickly, and dive in before you’re ready.
Pro: A possible antidote to the above lies with the practice account feature. T212 gives you £50,000 in virtual funds to invest as you please with 0 consequences. The best way to learn is by doing, and you’ll learn how to invest, when to trade, how to read candlesticks, and all about patterns, trends, stop losses, and exit points in what’s essentially a financial sandbox. This is a huge advantage not currently offered by Freetrade.
Con: Trading 212 gives away for free what every other trading platform charges for. So you might be wondering how it makes money. The answer partly lies with profits from share lending, but the inside scoop is that its profits are hugely bolstered by the 76% of CFD traders that lose money trading through it. There’s no “catch” to the free features, but some may find the ethics of the thing rest uneasily on their conscience.
Pro: Having existed in various forms since 2004, T212 have perfected the art of the bonus feature. With the ‘Create Pie’ tool, you can build a clean and stylish visual representation of your investment portfolio, and manually adjust the weight of each investment or ‘slice’ to easily balance the target weights.
Pro: Finishing with another big one – Trading 212 has a substantially broader stock universe than Freetrade. Unlike Freetrade, you can trade forex and futures, and choose from 10,000+ global stocks and ETFs compared to Freetrade’s 4,000.
Trading 212 FREE STOCK
if you are looking for a safe and better way to invest your hard-earned money, why not open a stocks and shares ISA with Trading 212 When you do this, you will get a free share worth up to £100. Start investing today from as little as £1!
The pros and cons of Freetrade
Pro: Signing up takes less than 60 seconds. All you need to do is plug in your email address, set a PIN, confirm a few details, and you’re away. This is another one that’s ostensibly a pro, and great if you know what you’re doing, but it can make it easy for casual or uninformed investors to jump in too early. Trading 212 presents a vanguard of checks and questions when you first register to make sure you’re fully aware of the risks. Freetrade wins on easy access, but doesn’t cosset you. Approach with caution.
Con: Some Freetrade users have reported delays in ordering. This is anecdotal feedback, and T212 is not immune to this issue, which can be caused by anything from time zones to technical faults. But delays cost dollars, and as a young platform, it seems that Freetrade still has some tuning up to do when it comes to speed of execution.
Pro: Freetrade has been upgraded to execute trades immediately. At the start of the year, it only executed trades once daily at 3pm – great if you’re confident about your pre-order, not so great if you want to jump in on a bullish reversal after the window’s shut. If you wanted to execute a real-time trade, you had to pay £1 for the privilege. Their recent switch to anytime trading during market hours has made them a much more appealing prospect for serious investors.
Con: And it’s a big one – Freetrade is only available on mobile. Without a desktop function for the big screen, it can be very difficult to utilise bollinger bands, simple moving averages, or any oscillator tools. For investors wanting to undertake more detailed analyses, a web interface will be a high plus that’s sadly lacking in FT.
In conclusion, Freetrade is great if you want to sign up and go, and if you’re not too bothered about having access to a broad range of global stocks and ETFs. It will suit a casual or occasional investor, and the app is simple to use for basic executions. It may serve as a friendly introduction for entry-level investors before they move on to paid brokers. Trading 212 is our preferred choice with the number of features it packs on its platform, the use of advanced features, a free Stocks & Shares ISA, Auto Invest and Pies it’s a no-brainer.
Still Not Satisfied? Try STAKE Instead.
STAKE is another commission-free trading platform that has recently launched in the UK. This platform focuses on The US market with over 4,600 US stocks and ETFs.