Your broker is your gateway to the markets. Choosing the wrong one can cost you money through hidden fees, poor execution, or inadequate regulation. Here is how to pick the right platform for your needs as a UK trader.
FCA Regulation: Non-Negotiable
The Financial Conduct Authority (FCA) regulates financial firms in the UK. If your broker is not FCA-regulated, do not use them. Period. FCA regulation means your money is protected up to £85,000 by the FSCS (Financial Services Compensation Scheme) if the broker goes bust.
Warning
Always check the FCA register at register.fca.org.uk before depositing money. Some offshore brokers claim to be "regulated" but are registered in places with minimal oversight. If they are not on the FCA register, walk away.
Three Ways to Trade in the UK
Spread Betting
You bet a pound amount per point of movement. Profits are completely tax-freein the UK — no Capital Gains Tax, no Stamp Duty. This is the UK's unique advantage. However, it uses leverage, so losses can exceed your deposit (though FCA rules now require negative balance protection).
CFDs (Contracts for Difference)
Similar to spread betting but structured as a contract. You do not own the asset — you trade the price difference. CFDs are leveraged but profits are not tax-free (you pay CGT on gains). Losses can be offset against gains for tax purposes.
Share Dealing
You buy and own actual shares. No leverage, no expiry. You can hold them in a Stocks & Shares ISAfor tax-free gains (up to £20,000 per year). This is the simplest and safest approach for beginners.
| Feature | Spread Betting | CFDs | Share Dealing |
|---|---|---|---|
| Tax-free profits | Yes | No | ISA only |
| Leverage | Yes | Yes | No |
| Own the asset | No | No | Yes |
| Can go short | Yes | Yes | No |
| Best for | Short-term trading | International traders | Long-term holding |
Popular UK Platforms Compared
| Platform | Type | Best For | Min Deposit |
|---|---|---|---|
| Trading 212 | Shares, CFDs, ISA | Beginners, free shares | £1 |
| IG | Spread betting, CFDs, Shares | Experienced traders | £250 |
| Hargreaves Lansdown | Shares, ISA, SIPP | Long-term investors | £1 |
| Interactive Brokers | Shares, Options, Forex | Serious traders, global access | £0 |
| eToro | Shares, CFDs, Crypto | Social/copy trading | $100 |
What to Look For
- Fees and spreads — lower is better, but not everything
- Platform quality — fast execution, good charting, mobile app
- Education — built-in learning resources (IG excels here)
- Customer service — can you reach a human when things go wrong?
- Asset range — does it offer the markets you want to trade?
Key Concept
Always start with a demo account. Every reputable broker offers one. Trade with fake money for at least 2-4 weeks before risking real capital. There is no rush. The markets will still be there when you are ready.
Risk Disclaimer: Trading financial markets involves significant risk of loss. The content on this page is for educational purposes only and does not constitute financial advice. Past performance is not indicative of future results. You should not trade with money you cannot afford to lose. 70-80% of retail investor accounts lose money when trading CFDs and spread bets. Consider whether you understand how these products work and whether you can afford the high risk of losing your money.