What is the best online broker? That’s easy. The best online broker is the one that provides you with the optimal tools required to dedicate yourself to, and even make a living from, trading. The problem is that there are so many brokers around. To make things easier on you, we would like to show you which are the best brokers and which broker is better at what aspect of trading. For example, when working with CFDs, Plus500 stands out above the rest of the brokers (if you want to take the fast-lane click here to visit Plus500) (remember that CFDs are a leverage products and can result in the loss of your entire capital. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money).
|Rank||Broker||Trading||Regulation||Min. Deposit||Start trading|
|1º||Plus 500||CFDs||FCA, CySEC||100€||Visit site|
|2º||eToro||CFDs||FCA, CySEC||200€||Visit site|
|3º||XTB||CFDs & Shares||Banif, CNMV||0€||Visit site|
In our opinion these are some of the best brokers in 2021 for trading. We will explain more about what our opinion is based on, and why we consider the brokers listed in the table above to be the best. To this end, we will analyze the reliability of these brokers based on the regulatory bodies which supervise them, the prices and fees that they charge for investing as well as other criteria such as the leverage that they offer, the quality of their trading platform, the promotions and their amount of underlying assets.
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Not all brokers offer the same services. For example, there are some that specialize in CFD trading (these are called Contract for Difference providers) (Plus500 is one of the best in this regard) (76,4% of retail CFD accounts lose money). Others specialize in Shares and Forex CFDs trading (24Option) (86,24% of retail CFD accounts lose money), while others still are great for investing in the stock market and for buying and selling shares (eToro) (past performance is not an indication of future results. Your capital is at risk. 76% lose money). Some brokers offer some of these services, while others offer them all.
In any case, putting aside for a minute which services each broker offers, they all need to meet certain common requirements concerning safety, cost-effective commissions, platform quality and high leverage. Let’s take a look at the first of these: safety.
Regulation and Oversight
This is one of the most important points. When choosing an online broker, we have to make sure that it is as safe and reliable as possible. How do we do this? Mainly by looking at the regulatory bodies which oversee it. We know this can be a lot of work, so on our website we always show you what regulatory bodies supervise which brokers.
That a broker is regulated by a trusted body does not guarantee 100% reliability, but it does provide a good measure of safety and peace of mind. For example, among the most reliable regulatory bodies is the FCA in the United Kingdom. Plus 500 UK LTD is authorized and regulated by the Financial Conduct Authority. Moreover, it is also authorized and regulated by the Cyprus Securities and Exchange Commission. If we add to this the fact that it scrupulously complies to the MiFid norms, we can conclude that it has a very high degree of reliability. Plus500AU Pty Ltd (ACN 153301681) is licensed by: ASIC in Australia, AFSL #417727, FMA in New Zealand, FSP #486026 and its Authorised Financial Services Provider in South Africa, FSP #47546.
At the moment of choosing an online broker, safety will always be foremost on our minds, for this reason, we have only included in our ranking those brokers which we feel give use the confidence and peace of mind not to be worried about problems and scams – those that allow us to dedicate ourselves to investing and trading.
Commissions and Spreads
Commissions are another important element to keep in mind. After all is said and done, if we do a lot of trading we are going to end up giving a lot of money to the broker. The best solution is to find quality brokers that provide the lowest possible commissions. That is why, nowadays, many brokers operate commission-free.
Among stock market brokers, the fees tend to include costs such as holding fees, fees for covering dividends and fees for each share buy and sell operation, etc. The ideal scenario is to find the cheapest broker that obeys all the requirements imposed by regulation.
Some of the best brokers for trading in derivatives which we included in our list had 0% trading fees in 2021. This means you don’t pay anything for making a trade, which almost amounts to trading for free. What’s more, a lot of these brokers offer different types of accounts with different privileges. Some of the advantages of these privileges are receiving comments on market conditions from expert traders or the possibility to download high-quality trading software.
A broker not charging its traders a commission is a good thing, but obviously, the companies offering this service need to make a profit at some point. So, how do they do it? This is done with spreads. A spread is the difference in price between what a product is bought and sold for, and obviously the spread is in the broker’s favor. All brokers have spreads (except for investments in the stocks), it is an inevitable cost of trading, but it is one which we can try to minimize. Cheap brokers usually have tight-spreads.
Another thing to consider is that there are no fixed spreads, each spread is dependent on the product we wish to trade as well as upon the moment at which we choose to trade it. Where there is greater market depth, spreads will be lower than on products that are hardly traded at all. For example, if we are trading Forex CDFs on the Euro/Dollar currency pair, we will have much lower spreads that if we are trading CDFs on secondary currency pairs. This means that, investing in the currency pairs that are most traded is the cheapest way to go.
In the case of Plus500, which among all the brokers in our ranking holds the highest spot, the spreads are very tight and appealing. For example, in the world of Forex, spreads are very low and well-known currency pairs such as the Euro/Dollar have a trading cost that can be very low on some occasions. Moreover, Plus500’s trading commission is 0%. We mentioned before that spreads were dependent on the assets involved in the trade, to learn more about Plus500’s spreads, click here (76,4% of retail CFD accounts lose money).
One of the advantages (as well as risks) of trading products such as CFDs or Forex, is that we can trade with much more money than we actually have. For this reason, if we make the minimum deposit required by the brokers (usually 100 to 200 euros), in reality we will be able to trade as if we had 30 times that amount.
For example, if we have deposited 200 euros with the broker, and this allows us a leverage of 1:30, we will be able to trade in such a way as if we had 3.000 euros. This is why, when choosing an online broker, we must determine what level of leverage they provide for each product, to see if we are interested in trading in those particular assets. A higher leverage allows for more possibilities. That is why it counts as one of the parameters in our ranking. Using leverage involves taking risks, and needs to be done in an intelligent way. To avoid big losses, regulators have limited the maximum allowed leverage to 1:30.
Comparison: Best Online Brokers in UK for 2021
This review has one essential goal, to establish a comparison of key elements for each broker, be they good or bad ones. To this end, we will separately list the main features for each broker. We have selected companies which have been operational in 2021. Since the number one broker in our comparison is Plus500, we will start there.
They do not charge a trading commission, the variety of traded assets is very high, and they offer a high degree of experience and trustworthiness. It is probably the most well-known broker. The following list details its strengths and weaknesses.
- Very low spreads for Forex trading
- Very attractive spreads for other assets such as commodities, indexes and stock shares
- Conveniently regulated
- The funds and equities of its clients are insured for higher safety
Customer service in English
- For investors with a lot of experience, the platform may appear too easy
- Minimum deposit of only 100 euros/dollars
- They respond quickly to any of their investors’ concerns or problems
- They allow for the covering of dividends on long stock market trades without charging any commission
- Demo account
You can read more about Plus500 by clicking here (76,4% of retail CFD accounts lose money).
The second spot in our ranking is held by eToro. Although, in our opinion, they offer high-quality services, they are still a step below Plus500. Here are this broker’s strengths and weaknesses.
- Spreads starting at 2 pips
- In general, the spreads are higher than at Plus500
- Regulated by reliable bodies
- Two trading platforms
- Having several trading platforms can lead to confusion
- No hidden costs
You can read more information about eToro by clicking here (76.6% of retail CFD accounts lose money)
Analysis and Reviews
You should not think that we have chosen these brokers at random. Before choosing a broker, it is necessary to do the proper research and to ask ourselves the following question. On what basis should we choose a broker? There are a number of elements which we must always take into consideration and those are the ones upon which we have based our review. Moreover, although we have selected three brokers to which we previously referred to, we investigated a multitude of brokers in order to choose the three best ones. For instance, we investigated XTrade,Tradeo, Admiral Markets, UFX, FxPro, ActivTrades, Interactive Brokers, FXCM, CMC Markets, Alpari, BNP Paribas Personal Investors, Norbolsa, Hanseatic Brokerhouse, IronFX, IG Markets, HotForex, Fortrade, Clicktrade, Swissquote, Dukascopy, AvaTrade, DeGiro, XTB, OctaFX, Saxo Bank, ActivoTrade, ETX Capital, iBroker, FXGM, Oanda, Trade360, GKFX, Vestle, NordFX, Trading212, and the specialist in social trading eToro. We also compared the brokerage services offered by some banks such as Renta 4, BBVA Broker, Bankinter, Openbank, Self Bank, Bankia, or Broker Naranja by ING Direct, even though these brokers charge higher commissions and are generally worse overall. All this to say that we performed an exhaustive analysis of all these brokers and we ended up by choosing the three that you saw in the table as being the ones offering the best quality service in 2021.
What Broker you Should Choose and How to Trade Online
Nowadays, any self-respecting broker has an internet presence, and engaging with a broker can be done entirely online. In general, an online broker will ask us to make a minimum deposit of 100 euros for trading in CFDs and Forex, and 200 for stock market trading. However, before depositing, you will be required to register. This is usually a straight forward process, but can be aggravating at times. The normal procedure involves filling out various online forms indicating personal information such as name, address, etc. After this is done, it is not unusual to be asked about your financial knowledge (don’t worry, you can be honest here) and about the source of the money you will be using to trade with. They will occasionally ask that you submit a copy of your national identity papers or passport. It is only after completing all these that you should make the minimum deposit. Once you have done all this, you will be ready to trade.
To summarize, in our opinion, Plus500 is one of the main Forex broker available at the moment and they also specialize in trading CFDs on stocks and commodities (gold, silver, oil…) as well as ETFs.
You can sign up or get more information about Plus500 by clicking here (with a minimum deposit of 100 euros/dollars in 2021) (76,4% of retail CFD accounts lose money).
Finally, if you would like to buy and sell shares on the stock market, check out eToro’s site by clicking here (200 euros/dollars minimum deposit in 2021 past performance is not an indication of future results. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you can afford to take the high risk of losing your money).
Remember that CFDs are a leverage products and can result in the loss of your entire capital. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% of retail investor accounts lose money when trading CFDs. You should consider whether you can afford to take the high risk of losing your money.