Interactive Brokers vs Trading 212 Comparison – 2024

Top Reasons to Choose Interactive Brokers or Trading 212

In the table below, I’ve sampled the top reasons why I believe Interactive Brokers excels for diversified trading and Trading 212 stands out for its unique offering of rare CFDs from various markets:

Interactive Brokers: Snapshot

Interactive Brokers was founded in 1978 in the United States. The broker is licensed in multiple jurisdictions by some of the most trusted financial institutions, such as the FCA, SEC, SFC, MAS, and others. Interactive Brokers is renowned for its extremely low fees, making it arguably the best choice for traders and investors interested in building diverse and well-balanced portfolios.

Interactive Brokers: Who is it for?

Interactive Brokers is geared towards traders interested in exploiting different opportunities and long-term investors. This is because of its rock-bottom trading fees and a wide range of instruments, including CFDs, options, futures, and ETFs. Particularly notable is the opportunity to trade US-listed shares without a commission, making it a prime choice for stock traders.

What Makes Interactive Brokers Stand Out?

Interactive Brokers is an industry leader when it comes to offering low trading fees and diverse tradable instruments. There is also a range of advanced trading platforms with professional-grade tools.

Trading 212: Snapshot

Trading 212 is renowned for being the first broker to introduce commission-free stock trading in Europe. Founded more than two decades ago, in 2003, and headquartered in the United Kingdom, Trading 212 is licensed by three top-tier financial regulators in Europe. Trading 212 offers an impressive amount of rare CFD instruments, making it the go-to choice for those interested in trading exotic financial instruments that are unavailable with most other brokers.

Trading 212: Who is it for?

Trading 212 is geared towards intraday and day traders, while also providing investing options. The broker boasts competitive fees and its own feature-rich platform that is also quite easy to navigate and learn. As a matter of fact, I took my first steps in trading using Trading 212’s platform more than 15 years ago, and it is the reason why I came to appreciate the intricacies of technical analysis.

What Makes Trading 212 Stand Out?

What stood out the most to me in Trading 212’s offering is the vast array of exotic CFDs available. Where most brokers would typically offer around 45-55 currency pairs, 5-6 commodities, and 10 indices, Trading 212 provides 178 FX pairs, 46 commodities, and 20 indices. This exceptional diversity offers traders an unprecedented opportunity to capitalize on rare market opportunities in exotic markets.

Trust

Interactive Brokers vs Trading 212 Trust and Regulation Comparison

Interactive Brokers is authorized by multiple Tier-1 regulators, including the SEC and CFTC in the US, IIROC of Canada, FCA in the UK, ASIC in Australia, and more. The broker is listed on the Nasdaq and has a market cap of around $33 billion. It operates on a ‘best execution’ basis and adheres to all essential safety requirements. In short, Interactive Brokers ranks among the top 1% of brokers in terms of safety.

Trading 212 is regulated by three Tier-1 entities: the FCA in the UK, CySEC in Cyprus, and the FSC in Bulgaria. Clients of the broker are covered by the respective compensation schemes of these three regulators. Additionally, Trading 212 has issued private indemnity insurance from Lloyds with a coverage of up to $1 million.

Fees

Interactive Brokers vs Trading 212 Spreads, Fees and Commissions Comparison

Interactive Brokers stands head and shoulders above the competition with regards to fees. It offers raw spreads from 0.0 pips on spot currency pairs, with volume-based commissions that decrease for larger-sized orders. Uniquely, Interactive Brokers allows commission-free trading of US-listed stocks, making it exceptionally attractive for stock traders. Additionally, the broker does not impose a maintenance fee on inactive accounts.

Trading 212 was the first broker in Europe to introduce commission-free trading of CFD shares. Its CFD account features floating spreads from 0.4 pips and zero-commission trading. However, a conversion fee of 0.5% is applied when instruments are denominated in a currency different from the account’s base currency. The pricing mechanism is geared towards intraday trading, though the broker does not allow scalping.

Platforms and Tools

Interactive Brokers vs Trading 212 Trading Platforms Comparison

Interactive Brokers supports multiple trading platforms, including its proprietary client portal and TradingWorkstation (TWS). TWS provides access to a wide range of markets (CFDs, futures, options, warrants, etc), ideal for diversifying market exposure. It’s equipped with over 90 technical indicators, advanced charting tools, and comprehensive analytical capabilities, making it a prime choice for technical traders.

Trading 212 has invested heavily in its proprietary platform. It has very user-friendly charting capabilities that allow easy scaling up and down of price action. The web trader features 90 analytical tools and various chart configurations. It also offers basic and complex order types, including OCO orders, for sophisticated entries and exits.

In case you’re looking for brokers that offer third-party platforms, check out our guides on the best MT4, MT5, and cTrader forex brokers.

Tradable Instruments

Interactive Brokers vs Trading 212 Instruments Selection Comparison

Interactive Brokers offers upwards of 8,300 instruments across more than 130 markets. The greatest advantage of its diverse instruments offering is the possibility of effectively hedging trading risk. In addition to CFDs, Interactive Brokers offers multiple warrants, bonds, mutual funds, futures, and options. These allow traders to speculate on anticipated price changes and also to navigate expected and unexpected volatility changes.

Trading 212 stands out with its impressive offering of exotic instruments. What made the strongest impression on me was the availability of 178 currency pairs, which is one of the biggest assortments of majors, minors, and exotic crosses in the industry. With access to over 7,000 CFDs, Trading 212 positions itself among the top brokers for those seeking an extensive range of instruments to trade.

Customer Support

Interactive Brokers vs Trading 212 Customer Support Comparison

Interactive Brokers offers multilingual assistance available 24/5 through live chat, email, and phone. The broker’s customer support agents typically respond to new queries fairly quickly and demonstrate a good understanding of the wide range of services Interactive Brokers provides.

On the other hand, Trading 212’s support is accessible 24/7 but exclusively through email. When I last reached out with questions about Trading 212’s execution model and performance, I received a detailed and highly informative reply within an hour. Additionally, Trading 212 fosters a sophisticated trader community forum, where both traders and Trading 212 employees actively engage, providing prompt responses to general inquiries.

Research

Interactive Brokers vs Trading 212 Research Tools Comparison

Interactive Brokers offers multilayered research materials, both developed in-house and incorporated from third-party providers. Their content provides in-depth insights into current market developments and potential trading opportunities. I appreciated the nuanced approach of Interactive Brokers’ research, most of which combines aspects of technical analysis, fundamental analysis, and the psychology of trading.

Trading 212 no longer provides technical or fundamental analyses. No third-party content is incorporated either. However, the broker maintains a news section for traders to stay updated on the latest market movements and an economic calendar that is more advanced than those offered by other brokers.

Deposits & Withdrawals

Interactive Brokers vs Trading 212 Deposit and Withdrawal Methods Comparison

Interactive Brokers processes payment requests fairly quickly, usually within 1 business day. There are no handling fees for deposits or withdrawals, although third-party banking fees may still apply. The one major drawback is that currently, payments can only be made via bank wire.

Trading 212 allows for fee-free deposits and withdrawals, with processing times that generally align with industry standards. The broker supports about a dozen payment methods, including wire transfers, credit or debit cards, and various e-wallets.

Account Types and Terms

Interactive Brokers vs Trading 212 Account Types Comparison

Interactive Brokers offers a wide array of account types, including individual, joint, trust, money managers, and small business accounts. These are geared towards individual, professional, and institutional traders and investors. Depending on the client’s needs, Interactive Brokers can accommodate short-term and mid-term speculative trading and longer-term value investing. The broker offers a choice of 19 different base currencies with no minimum deposit requirement.

Trading 212 offers two retail account types – one for trading and one for investing. The CFD account is better suited for high-frequency trading due to its pricing mechanism, though the broker does not allow scalping. Note that there are no Islamic accounts available for swap-free trading.

Education

Interactive Brokers vs Trading 212 Educational Content Comparison

Interactive Brokers’ educational content is extremely, well, interactive. Its educational courses encompass technical, fundamental, and psychological analysis. Upon their completion, traders can test their knowledge with multiple supporting quizzes. Overall, Interactive Brokers’ educational content is nuanced and very useful for learning how to spot viable trading and investing opportunities.

Trading 212 has created more than 160 educational videos that provide in-depth insights into essential trading topics and concepts. I especially valued the emphasis on trading psychology, which I consider integral to long-term success in the markets. Arguably, the most significant learning resource at Trading 212 is its previously mentioned Community Forum, where traders can learn from each other by sharing experiences.

Our Methodology

Since 2011, FX Empire has developed a detailed methodology for evaluating CFD brokers, involving over 250 variables across nine crucial categories. Our team of experts, with deep industry knowledge, conducts live testing and research by interacting with the brokers directly. We check regulations, open accounts, test spreads, account costs, platform functionality, instrument variety, customer support reliability, and the quality of research and educational content. This granular analysis helps us identify each broker’s strengths and weaknesses, keeping our comparisons current with market trends and ensuring our guides meet traders’ needs.

We strive to evaluate each broker objectively, considering how their offerings align with the diverse trading goals and preferences of our readers. Our focus is on providing a balanced overview of each broker’s strengths and weaknesses. This method ensures that our readers receive clear, insightful comparisons to aid in making well-informed trading decisions.

We employ a comprehensive rating system across nine key categories:

• Trust
• Fees
• Platforms and Tools
• Tradable Instruments
• Customer Support
• Research
• Deposits and Withdrawals
• Account Types and Terms
• Education

In each category, we conduct an in-depth analysis for both brokers, outlining features, advantages, and disadvantages and determining their suitability for different trader profiles. By blending insights from our extensive reviews with first-hand experiences and observations, we ensure each comparison is balanced, informative, and tailored to the trader’s unique needs. You can read more about our review process here.

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