The financial market in the United Kingdom provides favourable conditions for individuals and institutions to trade and invest in shares and ETFs. With a strong economy, stable regulatory environment, and highly developed financial infrastructure, the UK remains an appealing market for equity investors. UK brokers provide a wide range of services, including online trading platforms, research tools, and investment advice, catering to the diverse needs of traders and investors.
Plus500
FxPro
Axi
IG
ActivTrades
eToroBelow, you can find more information about platforms for trading and investing in shares and ETFs in the UK:
- Plus500, a broker authorised by the Financial Conduct Authority (FCA), provides exposure to share markets through contracts for difference (CFDs), quoting prices for hundreds of shares from Europe and the US. Further exposure is available through exchange-traded funds (ETFs).
- FxPro, an FCA-authorised broker, enables traders to gain exposure to the stock market without purchasing the underlying shares. The broker quotes prices for more than 1,800 shares from Europe and the US.
- Axi, another FCA-regulated broker, offers more than 100 shares for commission-free trading with competitive spreads. Clients receive dividend adjustments where applicable and may use leverage of up to 1:5 with retail accounts.
- IG, an FCA-authorised broker, caters for both short-term speculators and long-term investors by offering CFD trading and direct investment in thousands of shares-more than 11,000, to be precise. Its investment account enables commission-free investing in shares and exchange-traded funds.
- ActivTrades, a broker under FCA supervision, offers more than 1,000 shares, tradable with tight spreads and no hidden fees. Clients can filter the selection by country and access leverage of up to 1:5.
- At eToro, a broker compliant with FCA standards, UK clients can speculate on share price movements through CFDs or purchase and hold shares without paying commission or custody fees. Clients can also generate passive income through stock lending. Share CFDs carry spreads from 0.15% of the trade’s value.
With the growth of online trading, brokers serving UK clients have adapted to the changing market, offering user-friendly platforms, mobile trading apps, and competitive pricing. UK brokers provide both experienced and novice investors with a convenient and secure way to trade and invest in shares and ETFs. In this article, we will explore the best brokers in the UK, their services, and the key considerations for trading and investing in shares and ETFs.
Share Trading and Stockbrokers Explained
Share trading involves buying and selling shares in publicly traded companies with the aim of profiting from price fluctuations. Brokers play a crucial role in facilitating share trading, acting as intermediaries between buyers and sellers. They provide trading platforms, execute trades, and offer various services, such as research, analysis, and investment advice.
In the UK, stockbrokers are regulated by the Financial Conduct Authority (FCA), helping to ensure that they operate transparently and securely. Stockbrokers can be categorised into two main types: full-service and discount brokers. Full-service brokers include traditional brokerage firms, which offer a wide range of services, including investment advice, research, and portfolio management, while discount brokers focus on executing trades at competitive prices.
Discount brokers, also known as execution-only brokers, usually charge lower fees, as they offer a more limited range of services to share traders. Neobrokers can often be categorised as discount brokers, as they tend to reduce trading costs through tighter spreads and lower commissions while still offering a reasonable range of trading products.
UK traders can also use neobrokers to trade shares or ETFs. This new generation of online brokerage firms uses advanced technology to provide low-cost, user-friendly, and accessible trading platforms for individual investors.
ETF Trading Explained
Trading ETFs (exchange-traded funds) involves buying and selling funds listed on stock exchanges, just like individual shares. ETFs are designed to track the performance of a specific index, sector, or asset class, providing investors with instant diversification and flexibility.
ETFs allow UK investors to gain exposure to a wide range of assets, including UK and global shares, bonds, commodities, and investment themes such as clean energy or technology, all through a single trade. Many brokers in the UK offer access to hundreds of ETFs, including those tracking major indices such as the FTSE 100, FTSE 250, S&P 500, and MSCI World.
Most UK brokers, including platforms such as Hargreaves Lansdown, AJ Bell, Trading 212, and Freetrade, offer ETF trading alongside research tools, tax-efficient accounts such as ISAs and SIPPs, and commission-free options in some cases.
Differences Between Share Trading and Share Investing
Share trading and share investing are two distinct approaches to participating in the stock market. UK residents can legally engage in both, with many online brokers catering for traders and investors with different objectives. Share trading involves buying and selling shares frequently, with the aim of making short-term profits from price fluctuations.
Many brokers serving UK clients offer investment accounts for buying, selling, and holding shares with the aim of making a long-term profit. Other brokers offer CFD (contract for difference) trading, which involves speculating on the price movements of an underlying asset without owning it.
By contrast, CFDs are derivative products that allow you to speculate on share price movements without owning the underlying shares. A CFD is a contract between you and the broker under which you agree to exchange the difference in the value of the shares between opening and closing the position.
The table below summarises the differences between trading shares through an investment account and trading share derivatives through CFDs.
| Feature | Investment Account | Share CFDs |
| Ownership | You own the actual shares. | You do not own the underlying shares. |
| Leverage | No leverage (1:1) | Leverage available (capped at 1:5 for retail clients) |
| Dividends | You receive dividends | No dividends, but possible dividend adjustments |
| Voting Rights | You have voting rights as a shareholder. | No voting rights |
| Expiry Date | No expiry date | Rolling expiry date (e.g. daily, weekly) |
| Risk | Market risk, company-specific risk | Market risk, company-specific risk, leverage risk, margin call risk, counterparty risk |
| Fees | Commission, custody fees | Spreads, overnight financing charges, commissions on opening and closing positions |
| Trading Style | Long-term investing, buy-and-hold | Short-term trading, speculation |
| Regulation | Regulated by the FCA (Financial Conduct Authority) | Regulated by the FCA, with additional rules for CFDs |
| Taxation | Subject to Capital Gains Tax; dividend tax may also apply. | Subject to Capital Gains Tax; income tax may also apply to professional traders. |
Does ETF Trading Share Similarities with Share Trading?
Despite their differences, share and ETF trading have several similarities. One of the most notable is the ability to trade on margin, allowing investors to use leverage and potentially amplify their returns. Both share and ETF traders can also use various trading strategies informed by technical, fundamental, and market sentiment analysis to make investment decisions.
Another similarity between share and ETF trading is the importance of risk management. Both types of trader need to be aware of the potential risks associated with their investments, such as market volatility, liquidity risk, and economic downturns. To mitigate these risks, traders can use various risk-management tools and approaches, such as stop-loss orders, limit orders, and diversification strategies.
In addition, both share and ETF traders can benefit from the use of trading platforms and online brokers. These platforms provide access to real-time market data, trading tools, and educational resources, making it easier for traders to stay informed and make better-informed investment decisions.
Finally, both share and ETF trading involve liquidity, which refers to the ability to buy or sell an asset quickly and at a fair price. Traders need to be aware of the liquidity of the assets they trade, as it can affect their ability to enter or exit positions promptly and at a favourable price.
Characteristics of Shares Worth Trading
When trading shares, many UK traders focus on companies listed on the London Stock Exchange (LSE) or international markets accessible through UK brokers. Shares worth trading generally have high liquidity and volatility, alongside consistent trading volumes, making them suitable for various strategies and objectives.
UK traders often look for shares with strong growth potential, reliable dividend payments, and stable financial performance. Popular choices include FTSE 100 giants such as HSBC, Unilever, and AstraZeneca-well-established companies with strong market positions. Many traders also follow the FTSE 100 index, which tracks the 100 largest UK-listed companies by market capitalisation.
Other important characteristics to consider include sector trends, competitive advantages, and innovative business models. Most UK brokers provide research tools, market analysis, and trading insights to help investors identify suitable shares. Platforms such as Hargreaves Lansdown and AJ Bell offer these resources alongside tax-efficient accounts such as ISAs.
Fees and Costs of Share and ETF Trading
UK residents who trade shares and ETFs with FCA-authorised brokers can expect to pay various fees and trading charges, whether they use an investment account or speculate through share CFDs. Common fees and charges include:
- Commissions: These range from 0.1% to 1.0% of the trade value in pounds sterling, depending on the broker and account type. This equates to between £1 and £10 on a £1,000 trade.
- Trading fees: These can include fees for buying and selling shares and ETFs, as well as fees for trading on margin.
- Custody fees: These are charged by the broker for holding and administering the trader’s securities.
- Management fees: These are charged by the broker for managing the trader’s portfolio.
- Spread costs: These arise from the difference between a security’s quoted buy and sell prices.
UK traders may also face other charges, such as:
- Account maintenance fees: Brokers may charge these for ongoing account administration and platform access.
- Inactivity fees: Some platforms impose charges if an account remains dormant for a specified period.
- Withdrawal fees: Traders should check for potential costs when transferring funds out of their trading account.
When trading shares through an investment account, you typically do not pay a separate spread fee to the broker, as you are buying and selling the underlying securities. However, you may still pay commission, which is a fee charged by the broker for executing the trade.
Commission for trading shares through an investment account can vary depending on the broker and account type. Some brokers charge a flat fee per trade, while others charge a percentage of the trade value.
Risks of Trading Shares and ETFs
Trading shares and ETFs involves significant risks, including market risk, liquidity risk, and trading costs. Market risk arises from price fluctuations, economic changes, and geopolitical events, which can affect the value of shares and ETFs.
Liquidity risk arises when traders cannot buy or sell securities quickly enough or at a fair price, potentially resulting in losses. Trading costs, such as commissions and spreads, can also erode trading profits. Traders may also face other risks, such as leverage risk, margin calls, and account closures.
Most UK brokers offer risk-management tools, such as stop-loss orders and position-sizing tools, to help traders mitigate these risks. Traders should carefully assess their risk tolerance, objectives, and market conditions before trading or investing in shares and ETFs.
How to Choose a Broker for Share and ETF Trading
When choosing a share and ETF broker, UK traders should consider several key criteria. First, they should look for a broker that is regulated by the Financial Conduct Authority (FCA) so that it is subject to regulatory oversight. They should also consider the broker’s fees and commissions, as well as the range of trading products and services offered.
A user-friendly trading platform and mobile app are essential for convenient and flexible trading. UK traders should also evaluate the broker’s customer support, research tools, and educational resources to help them make informed investment decisions. The broker’s reputation, security, and stability are also crucial factors to consider.
We also advise UK traders to check whether the broker offers a demo account, allowing them to test the platform and trading conditions before opening a live account. By carefully evaluating these criteria, traders can choose a reliable, suitable broker that meets their trading needs and objectives.
FAQ
What is the minimum amount required to open a trading account with a UK broker?
The minimum amount varies depending on the broker and account type, but it can be £100 or less.
Are profits from investing in shares taxable in the UK?
Profits realised within tax-efficient wrappers such as ISAs and SIPPs are exempt from Capital Gains Tax (CGT), which can make these accounts beneficial for long-term investing. Outside these wrappers, CGT applies to gains exceeding £3,000 (for the 2024/25 tax year), with rates of 18% for basic-rate taxpayers and 24% for higher-rate taxpayers as of April 2025. This distinction between tax treatment within and outside ISAs and SIPPs is an important consideration for UK investors. Trading shares and ETFs through spread betting accounts can offer further tax advantages, as gains can be free from Stamp Duty and Capital Gains Tax.
Are profits from share CFD trading taxable in the UK?
Profits from share CFD trading are taxable in the UK as capital gains if they exceed the tax-free allowance of £3,000. Gains above this threshold are taxed at 10% or 20%, depending on the taxpayer’s band. Losses can be offset against future gains. Unlike physical shares, CFDs are not liable for Stamp Duty and cannot be held in ISAs. Frequent traders classified as professionals may be subject to income tax at rates ranging from 20% to 45%.
Can UK residents use leverage when trading shares and ETFs?
Many brokers serving UK clients offer leverage for trading CFDs on shares and ETFs, but it is essential to understand the risks and regulations associated with leveraged trading. Leverage is capped at 1:5, with the limit intended to protect retail clients from taking excessive risk.
How can UK traders manage trading risks and limit losses?
UK traders can manage risks and help limit losses by setting stop-loss orders, diversifying their portfolios, and using risk-management tools, as well as learning about trading strategies and market analysis.