The #TradingRevolution and #FreeStockTrading in the Media

Media coverage of #TradingRevolution

As we continue rolling out our zero commission stock trading service, we’ve attracted the attention of leading media from London and the City.

Here’s what the they’re saying about our trading revolution and bringing down the barriers to stock investing.

The Telegraph:

“A new entrant to mainstream share dealing is driving trading costs down to a new low – in fact, to zero.”

Independent:

“Online trading startup Trading 212 is hoping it can provide the next stock market revolution.”

Forbes:

“There’s no doubt that the commissions charged by the large brokers in the UK are significantly more expensive than those from Trading 212.”

City A.M.:

“Brokers beware: The UK’s first ever no-commission share trading service launches today.”

proactiveinvestors:

“New share trading platform launches with zero commission deals.”

banking technology:

“Brokers are jokers with Trading 212 zero commission service.”

 

We are proud that our service has been recognised for exactly what it is – a new way for everyone to invest in UK and global companies. The plaudits and praise across the financial community speak for themselves.

Stay tuned, there’s more to come!

£0 Commission Stock Trading is Here!

0 commission stock trading

We are proud to announce that Trading 212 is the first and only broker in the UK and Europe that offers stock trading with no commission!

For the first ten trades you make every month there will be no commission and for the ones after that there will be a fee of £1.95 +0.05%!

This is nothing short of a trading revolution – we are enabling millions of people to trade and invest in real equity with the best possible execution, directly on the stock exchanges without paying any commission. And all this is possible with a beautiful and easy to use mobile and web app.

Here’s how things stand right now when it comes to fees:

Broker fee comparison stocks

As you can see investing in real stocks can be pretty expensive. This has been acting as a glass ceiling for a great many individual traders and investors from becoming shareholders and benefiting from the progress of companies. Profits from rising stocks and dividends paid out by successful companies have been reserved for a chosen few. But we’ve been hard at work to find ways to cut costs and democratise trading. And we’ve done it!

This rate is now active for over 1500 equities in the UK, U.S. and Germany. You will see these clearly marked in the platform with an “EQ” label, so that they can be distinguished from contracts for difference that now have a CFD label. (We’d like to note that the same company can be both an equity and CFD on our platform.)

Trading 212 platform stock trading no commission

So now you can invest directly in companies from all sectors. Carmakers like Tesla and BMW, banks like Lloyds and Deutsche Bank, tech giants Amazon, Facebook, Google and Apple can all be traded in Trading 212.

There’s more.

  • Your orders are executed directly on the London Stock Exchange, New York Stock Exchange, NASDAQ and Deutsche Boerse
  • There is no rerouting, execution is super-fast and we don’t sell your order flow
  • No margin or leverage requirements
  • No fees for holding positions overnight

Sound good? Let us know in the comments and give us your questions, we’ll reply right away.

 

Trading 212 is the most downloaded trading app in the UK!

1580_800_blogpost

We are very happy and proud to announce that Trading 212 is the most downloaded app for trading in the UK! Not only that – we have been at the top spot for quite some time now.

Since January 2016 we have been the overall front-runner with a sizeable lead over all of our competitors. Our rapid rise to the summit of mobile trading has proven that the shift to on the go trading needed a superior app that bridges the gap between the ubiquitous smartphone users and global markets.

Our numbers speak for themselves – number one over the course of the last six months for iOS!

Trading 212 is the most downloaded trading app in the UK! iOS

Number one since January for Android!*

Trading 212 is the most downloaded trading app in the UK! Android

We thank all of you for downloading and trading with us and we’re quite sure you’ll like the amazing new features we have in store. Stay tuned!

*All data is publicly available and can be accessed at App Annie

Why are ETF’s one of the most popular trading instruments?

Why are ETF’s one of the most popular trading instruments

Why are ETF’s one of the most popular trading instruments

 We look under the hood of one the latest additions to the Trading 212 portfolio

Exchange traded funds (ETF’s for short) have become one of the rapidly expanding instruments in recent years and we duly obliged by updating our product lineup by including, what we feel, cover some of the more important and interesting funds.

But what are these funds and what makes them so appealing to both retail and institutional investors?

First lets go over what funds are – it’s people’s or organisation’s money, grouped together, investing in the same way, for a, hopefully, increased benefit and profit. Larger pools of money can purchase more expensive stocks, or make more long-term investment. Not to mention that they are better equipped to weather any negative volatility with their increased size. Think seven-storey ocean liners in a storm.

There is a multitude of funds operating on the global markets – mutual funds, hedge funds, pension funds, sovereign funds all of them with their different agendas, styles of investing, risk/reward targets, etc. Their structure generally follows some common principles, chief among them that they invest in The difference between all of these and ETF’s is that the latter are actually tradeable on the market. They look like a fund, but behave like a stock. This means they can be bought on margin and shorted when you think the components of the fund are in for a bad period.

There exist two main types of ETF’s – those that cover separate countries and the so-called “sector” ETF’s. Country ETF’s offer you the chance to invest by proxy in a country which you have a strong opinion about, be it positive or negative. The ETF for say China contains in itself a list of companies that are structural for the local economy and their well-being reflects that of the overall economy. You wouldn’t be able to invest there as a retail trader, as the local stock exchange still imposes restrictions of foreign investment and stock trading.

ETF’s are liquid, through the Trading 212 PRO Platform you can trade them at all times during the market session and this isn’t even among their most important advantages. One is that you don’t need to perform the trades with all the instruments included in the fund (if they’re available in the first place). Which results in less time needed to perform the trade.

Financially there is also an upside – effectively there is a smaller spread. If for example you had to make ten trades with the companies in the Banking Sector ETF, then for each of them there would be a spread, added up they are considerably higher than the one we have in place for our ETF’s.

Country ETF’s are very flexible instruments. Researching them is generally seen as easier than that for currencies or stocks, although it has some underwater currents of its own. But it definitely lets you invest in a certain country in a straightforward way. The companies usually included in a country index are either the largest, or the most (structurally) important ones. Or both of course. They are blue chip companies who are diversified and connected with multiple other companies in the respective country and they influence the supply and demand of many products in the local economy.

One bonus that has to be mentioned with country ETF’s is that you can trade something that may not be readily available to a retail trader. A Korean company may be included in an ETF, but not the local index KOSPI, . The BRIC countries are the one’s we deliberately added – we have ETF’s for Brazil, Russia, India and China, so you can now invest in the emerging markets of the world.

Sector ETF’s are the other variation that we now offer. They are focused on the different components of an economy and take companies with a similar line of work. These are usually competitors, so you can’t play off their weaknesses compared to each other, but you can actually trade on them compared to other sectors. As this is a quite a large subject and the trading style of many an investor, next week we will be dedicating a separate article to them.

With the ETF’s we have, we hope to provide access to something that larger traders and investors usually sink their teeth in, but by accessing them from our platform, anyone can do it a lower cost and in an easier way.

Do you have any other particular instrument that you’d like to trade with us? ETF’s were added due to client requests, we answer those.

When and How to Hedge Your Trades (with Video)

How to Hedge Your Trades

How to Hedge Your Trades

Explaining a key risk tool

Managing your risk is a vital part of trading and hedging is one of the most popular methods to achieve it. It lets you protect your trades and limit the risk from unwanted movements that go against your positions.

So what is hedging? The simple definition of hedging in trading is when you make a trade in the opposite direction of one you’ve already opened. The closest thing that resembles this in the real world is insurance.

When you make a long term investment, be it in a house, or in a large position buying the EUR/USD you have certain expectations. The house to last a lifetime and the euro to climb its way to new highs. 1.50 will do nicely for me.

After you make these assumptions and invest in them, you need to consider the possibility you might be wrong about them. It’s the mark of maturity to anticipate our own capacity to make mistakes and this is where the hedge (or otherwise called insurance) comes into play. In trading its done by opening an opposite trade/position to limit the risk of another trade/position, insurance is it’s closest equivalent in the real world.

For your house, you take out an insurance against fire, natural disasters, theft etc. For the EUR/USD we use the hedging functionality.

For instance, right after we buy the EUR/USD, there might be a move down which rattles your confidence in the prediction you made. So you open a position selling the euro, as it obviously has some way to go down (as seen on the picture below). Although this is done as a consequence of the first trade, it’s an altogether new one – both will be displayed clearly as two separate orders, each with their own timestamp, entry level and profit/loss. Now instead of just registering a loss from the first trade, you can have some upside while you wait for it to happen.

How to Hedge Your Trades - Hedging Method
Stop Loss vs. Hedging Method

In the above examples you can see how the hedging mode gives you an advantage after the price goes in the opposite direction of your trade. In both cases we start off with a “buy”, but the price goes down. If you have a stop loss level, it gets triggered at level “B”, but if you have the option to hedge, you can actually “sell” at level “B”. With this you can make a profit until the price runs down to level “C”, from where, hopefully there is an upturn and potential profit from your initial order.

The hedging functionality is also handy when trading the same asset at different timeframes. For instance, you may think GBP/USD is going down in the next days and possibly weeks (by looking at its weekly chart) and you sell it with an amount reflecting your confidence in the trade (we recommend that none of your trades exceed 5% of your funds).

How to Hedge Your Trades - One Day Chart
GBP/USD Daily Chart

At the same time you see that it’s reached a technical support level (which is visible on the hourly chart below) and so you’d like to buy it for a shorter period, before any other factors continue to press it downwards. To take advantage of this you open a second trade, buying GBP/USD. Besides a possible short-term profit, such trades can also act as a platform for when the daily trend finally reverses.

How to Hedge Your Trades - One Hour chart
GBP/USD One Hour Chart

The infamous hedge funds became popular by their pinpoint accuracy in defining the most important components of hedging – timing and size. Miss the moment and it might be pointless to hedge altogether, or the downside might actually grow. Hedging the wrong amount, on the other hand, may make the move ineffective or too risky.

Mastering hedging should first be practised and then used in real accounts, as all the mentioned variables can quickly change. But once you add it to your abilities, it can smooth out the dips in your performance, or even be a life saver when something goes awry.

There will be some changes when trading in hedging mode when it comes to auto-close orders, the main types of pending orders and for trailing stops. You can check them out here, where you’ll also find where they will be placed.

We’ve also prepared a video tutorial on how to use the hedging function. Among the technicalities you’ll notice the “netting” function. This is one of the important functions we’re adding alongside and within hedging, as it allows you to merge your separate positions into one if you choose to do so, with the added benefit of being saved the spread for each of them.

If you have any questions about the hedging mode, or the principles guiding its use, let us know in the comments section and we’ll get back to you.