What is a Trading Platform?
Investors are therefore able to purchase and sell securities through these platforms at any point during the day.
Nowadays, trading platforms most commonly take the form of an app, which investors can download on their smartphone and which have easy-to-use interfaces – perfect for those who are new to investing! It’s also worth noting that most require low sums, so you don’t need to have lots of money to invest. Therefore, trading platforms, as you can imagine, are the vital piece of software you need when trading stocks, so it’s definitely worth knowing what they are and how to choose one before making your first investment.
- A trading platform is a piece of software facilitating the digital trading of stocks available on the stock exchange
- They are used to track the progress of your investments, whilst offering other functions such as charts, research, news and educational content
- Trading platforms incur small fees
- Whilst some trading platforms offer a huge range of investments, others only include specialised funds
- Which trading platform you use is a personal decision - hence research is key!
What are the Key Features of Trading Platforms?
Trading platforms offer easy-to-use interfaces where investors can purchase and sell stocks while tracking the movement and progress of their investments in real-time. Beyond that, they include features that enable investors to make well-informed decisions about their investments, such as charts, news feeds, educational content, and premium research.
Trading Platform Costs
Trading platforms usually incur costs and fees. These can include cost per trade, annual fees, withdrawal fees, and offer spreads (where commission is taken on the difference between purchase and sale). Costs will therefore be dependent on the number of funds you invest in and how often you decide to trade. If you want to take a hands-on approach to investing where you frequently trade, consider that the costs will add up.
What to Consider when Choosing a Trading Platform
- Costs and fees: Most trading platforms incur a small fee to cover things such as cost per trade, annual fees, withdrawal fees and bid offer spreads. Prices will vary from platform to platform, so do your research beforehand!
- Investment options available: Some platforms offer a huge range of investments, whilst others only include specialised funds.
- Usability: Consider whether the user interface works for you – you want it to be easy to navigate and not overly complex.
- Reputation: This is huge! You want a platform with credibility. Consider how long the platform has been around, whether it’s regulated by FCA, and whether they’re listed on the stock exchange.
- Demos: It’s worth seeing whether you can set up a demo account to mimic the trade with the platform before you start.
- Support: Is there a customer support service available to you in case you run into any issues?
Examples of Trading Platforms
There are hundreds of trading platforms to choose from, all coming with different features, fees, and other functions. Preferences will vary from person to person depending on their investment goals, so it’s important you do your own research! Here are some of the most renowned trading platforms:
- Fidelity Investments