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Trading 212 Offers Unlimited Fee-Free Trading

14:43, 20th September 2018
Abraham Darwyne
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While traditional banks are competing with startups such as Monzo and Starling who utilize technology to make services more efficient and affordable, Hargreaves Lansdown and other established fee charging brokers are now facing similar challengers.

The FCA regulated UK brokerage Trading 212 has become the first to offer unlimited commission-free share trading in the UK and Germany. The company previously specialized in contracts for difference (CFDs) and now “want to build a big base of accounts” with plans for customers to trade shares without paying capital gains tax on profits via their Trading 212 ISA (Individual Savings Account).

Over in the US, Robinhood, the highly successful fintech offers zero commission trading to millions of US customers, has been long rumored of expanding into the U.K. It has enabled millions of investors to buy shares in popular US companies such as Amazon, Tesla and Apple without paying commission to traditional brokers.

Freetrade, a similar crowdfunded startup, announced plans to introduce zero commission trading to Europe in May earlier this year, having spent over 2 years building the online platform. Now authorized by the London Stock Exchange, it is still awaiting launch with over 50,000 on the waiting list.

Revolut, the London-based Fintech also announced in June this year the intention to launch a commission-free trading service called “Wealth” allowing users to invest in the stock market. They have a 2 million user base already using their digital banking alternative.

Commission-free trading platforms have a number of ways to generate revenue, namely interest on customer holdings, receiving interest on loan rates from margin trading, which gives customers more buying power, and offering paid subscription to premium trading products.
 

 

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The information, investment views and recommendations in this article are provided for general information purposes only. Nothing in this article should be construed as a solicitation to buy or sell any financial product relating to any companies under discussion or to engage in or refrain from doing so or engaging in any other transaction. Any opinions or comments are made to the best of the knowledge and belief of the writer but no responsibility is accepted for actions based on such opinions or comments. Vox Markets may receive payment from companies mentioned for enhanced profiling or publication presence. The writer may or may not hold investments in the companies under discussion.

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