Online Trading

citytrader

Hi, I am fairly new to trading and would like to know if anyone can recommend a good online trading platform. Barclays, for example spring to mind, but i am not sure how good they are.

Any suggestions will be greatly appreciated. Looking to invest around £500 to start.

Justin.

lardlikesdogs

I use Halifax who charge £12.50 per trade and no admin charges.
They also lower the amount every month to £3.99 per trade on a chosen day so works out ok,
But there are cheaper ones out there, But I am happy with them and they suit my needs.

lozzy1965

Last time I checked iWeb were £25 joining fee, £5 a trade and no annual fee. I'm with Selftrade and am considering moving to them. Depends if you want an advice or a trade only platform? £500 is not a huge amount of money to start trading with. Depending on who you go for, the percentage costs would be very high! A lot of platforms are around £50 annual fee - which is 10% EVERY YEAR - of your stake!

BLB53

It depends what you want to buy - some brokers are more geared to funds e.g. hargreaves Lansdown, others may be better for individual shares or ETFs e.g. TD Direct or Youinvest.

There's a comparison table on Monevator which may help http://monevator.com/compare-uk-cheapest-online-brokers/
also on diy investor http://www.diyinvestoruk.blogspot.co.uk/2013/05/compare-fund-platforms-brokers.html

Pachira

I would usually suggest you look to invest at the very minimum £1k in any position as commissions, bid/ask, fees, stamp all eat into your profits. £500 won't give you much opportunity to diversify portfolio either. With just £500 to start out with, maybe look at iii regular investing option instead:

http://www.iii.co.uk/our-services/regular-investing

Wilkins

X-O are one of the cheapest (£5.95 pre trade):

http://www.x-o.co.uk/

They are reliable in my experience, but the facilities are basic.

I think £500 is just about enough to start investing, but if you are intent on trading, you are probably going to lose most of your money anyway.

PenguinJim

Wilkins wrote: »

X-O are one of the cheapest (£5.95 pre trade):

http://www.x-o.co.uk/

They are reliable in my experience, but the facilities are basic.

I think £500 is just about enough to start investing, but if you are intent on trading, you are probably going to lose most of your money anyway.

X-O don't have IWEB's initial £25 fee, but IWEB do trades for £5. X-O will be cheaper if you do 26 trades or less. IWEB will be cheaper if you do 27 trades or more.

26 doesn't sound like a lot, but buy/sell (for example) eight shares and four index funds and you're still on 24, and that's a reasonable portfolio (obviously you'd buy this year and sell sometime after 2030, but that's another story!).

Dividend reinvestment is 2% on IWEB, but free on X-O, so if you're going for ~5% yield shares and you're automatically reinvesting, you'll also lose about 50p per £500 on IWEB. (You could just have it pay out and reinvest manually to avoid this.)

On paper at least, then, I'd recommend X-O over IWEB. However, do note that neither provides advice, and the information isn't comprehensive at either. You can mirror your portfolio using Google Finance, and/or set up a "Practice Account" at The Share Centre, to get additional perspectives on your portfolio.

Edit: I was looking for X-O's dividend reinvestment charges, and couldn't find any - it turns out that they don't offer automatic dividend reinvestment. So if you want to snowball your investment with dividends, you could wait until the end of the year and reinvest on each holding manually at £5.95 apiece. Youch! (But better than doing it per dividend payment, as that could be up to £30 per holding per year!) If you're looking for automatic dividend reinvestment, then, IWEB definitely beats X-O.

lozzy1965

PenguinJim wrote: »

X-O don't have IWEB's initial £25 fee, but IWEB do trades for £5. X-O will be cheaper if you do 26 trades or less. IWEB will be cheaper if you do 27 trades or more.

26 doesn't sound like a lot...

Good analysis. Hadn't heard of X-O and didn't find (or notice!) them when I looked a month or so ago. Just thought I'd elaborate on the 26 trades point you raised. With an intial stake of £500, I assume the OP will be either planning on buying and selling a lot, or adding money in chunks of £500 or so when funds allow. So iWeb might well work out cheaper in the long run.
Question. Do you know if iWeb allows online transfers to ones bank account? In their FAQ's, X-O appears to do this by message request, taking up to 3 days! Selftrade, who I am with, have a screen that allows online transfers of money either in or out of the account.

PenguinJim

Let's see... you add your bank details and debit card information when setting up the account, and then all you have to do to transfer out is click "Account Management", "Fund & Withdraw", and click the radio button for the second option:

Transfer funds out of my Share Dealing Account (CMA) into my bank account:

Bank Account: 1234567
Sort Code: 12-34-56

Please enter an amount to transfer:

Amount £(e.g. Enter £2.56 as 2.56)

But if you click for more information on timescales, it says:
When will money transfers out to your bank account be available?
Money transfers out to your bank account will be available in 3 working days.

Looks like it's three days, too!

bowlhead99

You get what you pay for really.

If when trading you want a choice of lots of international markets, buy on extended settlement terms, hold foreign currency cash, buy funds within the same account as shares and bonds, have the ability to take cash out by same day Chaps (for a fee) or on a slower method for less, etc etc, then you could use a more full-service online broker like TD Direct, which has all of the above.

I use TD and they suit me just fine. However, if you pick a more expensive broker like that with all the bells and whistles, you won't be able to do trades for £5-6 unless you are doing lots of them to get a discount, or commit to a regular trading plan to buy once a month. And to use TD as an example, you pay an inactivity fee if you don't trade quarterly or have a big enough account (or an ISA on the side) that they waive it.

So, for a small investor with £500 to have a bit of a play about with, you need to be looking at the absolute lowest running costs and not the most or best features.

As a side note, when you sell a share on the London stock exchange, you generally have to wait 3 days for settlement for you to actually have cleared funds in your brokerage account. So only then can you start the process of withdrawing which will take another 0 to 3 days depending who your broker is and whether they do same day transfers and whether you want to pay for one if they do...