Trading 212 is a London-based broker aiming to make stock trading more accessible to the world. Founded in 2004, they have become the UK’s answer to Robinhood, helping anyone who can scrape together a few hundred pounds to start trading.
The brokerage offers access to a wide range of assets from CFDs, ISAs, Forex, regular stocks to penny stocks. For this review, I’ll be focusing on the latter.
Trading 212 originally launched in Bulgaria under the name Avus Capital but later rebranded to a cooler sounding name. They were granted a licence by the FCA to operate in the UK in 2013 and over the last five years have rapidly expanded their user base.
A key part of their growth is down to following a freemium business model – providing free basic services and hoping users will progress to using the paid services. Who can say no to commission-free trades?
Similar to most brokers, Trading 212 have a web-based trading platform along with a mobile app. The mobile app is hugely popular due to its simplicity, receiving over 15 million downloads and growing.
Surge in Growth
Millennials have been flocking to the app since lockdown, casually trading stocks to get through the boredom. As you know, the financial markets have been crazy this year. Watching amateur traders battle against Wall Street pros has been hilarious and the penny stock market is also red hot. Novice traders banking huge profits gambling on low-priced stocks now think they’re the next Warren Buffett!
Searches for ‘penny stocks’ on Google in UK/Europe have been skyrocketing in 2021. The only issue is finding a suitable broker for shares under $5 in Europe is tough. Luckily Trading 212 are here to help. They provide access to a few hundred penny stocks that mostly trade on legitimate exchanges such as the NASDAQ and NYSE. While they’re not perfect, limited access is better than none!
Below is a sample of ten penny stocks that can be bought on the platform – these companies were chosen at random and the prices will be subject to change.
|Salem Media Group||SALM||NASDAQ||1.80|
|Iconix Brand Group||ICON||NASDAQ||2.66|
|Bimini Capital Management||BMNM||OTCMKTS||1.05|
Although low-priced stocks are fun to trade, it’s only fair to cover both the pros and cons of trading them with Trading 212.
- Low account minimum – only a £1 deposit is required to open an account. In general it only takes one business day to set up an account.
- Commissions-free trades on stocks and EFTs and no inactivity fees. Trading 212 makes money on the small spread between the bid and ask prices.
- Demo accounts are available as well as video tutorials. I recommend paper trading with virtual money first to get to grips with the basics.
- Limited selection of penny stocks, Interactive Brokers have a wider list of stocks to trade but do charge commissions – a surcharge of $0.005 per share.
- Customer service isn’t great, having millions of customers and not enough customer support staff is not a good match.
- Not suitable for active day traders – those placing over four trades in a day. More suited for buy and hold type investors.