Trading apps have become increasingly popular in recent years. There are now countless platforms to trade stocks through, making running a portfolio on the go possible without the need for five computer terminals with Bloomberg access. However, therein lies a problem. If you are not a fund manager with numerous years of experience in trading stocks, what trading app is best for you? And what exactly makes a good stock trading app?
Knowing the answer to these questions is crucial to getting the very best app for your needs and requirements. Everyone will trade differently and for different purposes, which is why there is such a need for so many trading apps. Remember your own circumstances when you are finally deciding upon one.
What is a stock trading app?
A stock trading app is an app that facilitates stock trades. However, they can vary greatly. Some trading apps will only run on a mobile, for example. In contrast, others will only be accessible through a desktop computer. Other stock trading apps actually allow you to run a multi-asset portfolio with ease. Some will allow you to trade stocks only.
What to look for in a stock trading app
When choosing the best stock trading app for you, as a UK investor, remember to consider the following factors and how they impact your investment abilities.
No trading platform seems to charge fees or commissions in the same way as another. Yet, while it may be time-consuming to get to the bottom of how a trading platform structures its fees, it is necessary. Many trading platforms will try to hook you in under the guise that they have the lowest fees out there. Some will say they are commission-free, others will say they have the narrowest spreads, while others will say they offer a certain amount of free trades a month. But remember, there really is no such thing as a free lunch when it comes to trading.
Some trading platform fees will work better for you and come out more cost-effective than other platforms that may look a little bit cheaper at a headline rate. If you are a high-frequency trader, using a company that gives you a certain amount of trades free a month may keep your trading costs down. Or, it could be that a firm that does not charge commission on each transaction, keeping your fee charges as low as possible.
Something that makes a big difference to how effective a trading app is is how effectively you can use it. Some trading apps will be intuitive for you to use, while you may find others a bit clunky. That may well be reflected in the prices or fees an app charges, however, so sometimes you may conclude that using a slightly more cumbersome app is worth it in the end. Or, you could find that an app is so poorly designed that it negatively impacts your ability to place well-timed trades.
Some trading apps allow you to play around with a demo account to see how you get on with the app’s interface and software. If a trading app does offer you this, it can be a good idea to use it, so you know what you are signing up for before parting with any hard-earned cash.
Depending on how risk-averse or risk-happy you are, the question of whether your trading platform is regulated or not may or may not be important to you. Regulation is there to keep you safe, but you may think a trading platform is so good that it is a risk worth taking if it isn’t.
Some trading platforms are a no-frills venture. Often, that means that little is offered in the way of research to its users, which may or may not be a bad thing to you. Free research may be an unnecessary extra that you do not feel you need to help your investigations into potential stock investments. Or, it could be that you feel the expertise of a research department is something you definitely need - and it could be worth paying that little bit more in terms of fees.
Remember to bear in mind what asset classes you want to invest in across your portfolio. For example, if you only want to invest in stocks, some apps may be more suitable. Alternatively, if you’re going to invest in bonds, ETFs, commodities, other alternative assets and Forex, it may be that you require a more comprehensive trading app where you can keep an eye on your portfolio from just one dashboard.
Finally, sometimes, higher fees are reflected elsewhere in a trading app’s platform. Any extra features that help you become a better trader or investor can sometimes be worth paying if you start seeing better returns. Additional features can include powerful analytic tools, the ability to copy another investor’s trades or put automatic buys or sells on so that you always achieve a price for a stock. However, these may not be features you end up using, so be sure you are not paying a premium for tools you don’t need.
Top stock trading apps in the UK
All of the below trading apps are regulated by the Financial Conduct Authority, or the FCA, in the UK. As a result, they follow robust and stringent procedures to adhere to the requirements and regulations the FCA sets out to protect investors.
eToro is a trading platform with a difference. It has a social media slant to it, which has made it the Facebook of the stock trading app market. In practice, that means you can follow a fellow trader and see what trades they are making. If you like how they trade, their portfolio, and their returns, you can set up trades that automatically mirror them.
Another possible benefit to potential users is the ability to trade cryptocurrencies - an increasingly popular asset class. It is also possible to trade CFDs through eToro. However, these do pose a risk of significant losses should just one trade not go in the direction you anticipated.
Finally, eToro does not charge commission on stock or ETF trades and does not charge management, rollover or ticket fees. However, you may find that the spreads are not quite as attractive as other platforms.
In stark comparison to eToro’s almost Generation X approach to trading, Hargreaves Lansdown’s trading app is a far more traditional way to trade stocks and shares. It is well designed and user-friendly as it is intuitive for many to use right from the beginning.
Hargreaves Lansdown is one of the largest stockbrokers currently in operation in the UK. Yet interestingly, despite the number of customers it has, it still charges some comparatively high fees. Its stocks and ETF trading fees are pretty expensive if you do not frequently trade in any one month. However, should you make over 20 trades a month, you will see your fee per trade come down considerably (from £12 to £6). Finally, what is great to see is that they do not charge deposit, withdrawal or inactivity fees, which can start to eat away at returns.
While Plus500 markets itself as the UK’s no.1 CFD broker, that is by no means the only asset it trades. For those looking for the ability to diversify their portfolio of stocks and shares by buying commodities and trading Forex, Plus500 offers the ability to do so all from one app. It is also possible to trade indices and ETFs for those who want to buy units in funds to gain exposure to a wide range of stocks without structuring an entire portfolio themselves. In fact, it is even possible to purchase units from the Cannabis Stock Index with Plus500.
Other attractions are its competitive spreads and fairly intuitive platform. There’s a lot of information that the app packs into a small space, but once you get used to it, it can be an easy to use platform even for beginners. Its customer service is meant to be one of the best in the business.
Revolut started life as a banking app that specialised in currency transactions. It has now stepped foot into the stock trading world. It offers some obvious attractions. Firstly, if you already use the company, it makes signing up to its trading arm even quicker. Plus, the app on your mobile is hard to fault - as is to be expected of a reputable FinTech company like Revolut. Plus, stock trading can be free with Revolut (depending on what account you open), and it does not charge any inactivity fees or withdrawal fees.
However, there are some fundamental issues with Revolut that may put off anyone keen to sign up. While it will not be an issue for everyone, Revolut can only trade stocks, cryptocurrencies, and some precious metals. So if you are looking to manage a multi-asset portfolio diversified with fixed income and alternative investments, you may want to go elsewhere. That being said, Revolut is a dynamic company, so it is likely to add classes in the future as it looks to compete with bigger platforms.
Picking the best stock trading app for UK investors
While the idea of trading stocks is simple - buy low, sell high - the reality of trading effectively can be very different. With so many investors and market makers and so many kinds of investment strategies out there, stock markets can be complex. Yet, the right stock trading app should materially improve your chances of making the best trades that can help improve your chances of capital growth and income. If you are looking to bolster your pension pot in the run-up to retirement, investing can sometimes be a suitable method.