CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 51% and 89% of retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.
Why trade US stocks through a UK forex broker?
The appeal is straightforward: one account, multiple markets. U.K. forex brokers offering U.S. stocks give you access to global equities without opening a separate investment platform. That’s a big deal for traders who already live in MetaTrader 5 or cTrader and want to keep things streamlined.
From our own experience, the speed and execution you get through a forex broker can feel sharper than traditional stockbroking platforms. Especially if you're a short-term day trader. There's also the benefit of extended market hours and tighter spreads on some high-volume tickers, depending on the broker's execution model. However, not all brokers offer access to pre-market or after-hours trading, which can limit flexibility around major news events. Check trading hours before choosing a platform.
It’s not quite Wall Street, but for U.K. traders looking to ride momentum in U.S. equities, this is one of the easiest doors in.
What to look for in a UK forex broker offering US stocks
Start with regulation — FCA oversight is non-negotiable. After that, I look at the depth of market access. Some brokers offer CFDs only, while others provide direct market access (DMA). If you’re serious about trading volume or want tighter pricing, DMA is worth chasing.
question_markDo U.K. forex brokers offer real shares or CFDs?
Most U.K. forex brokers don’t offer direct ownership of U.S. shares. Instead, they provide CFDs (Contracts for Difference) that track the stock’s price. These let you speculate on price movements, but you don’t actually own the stock. That means no voting rights and no direct dividend payments.
Then there's the platform. MetaTrader 5 is the usual go-to for equities, but some brokers use proprietary systems that may offer better charting or Level-2 data. You’ll typically be trading equity CFDs, which mirror stock price movements but don’t confer ownership. That affects not only costs but also your legal rights as an investor.
And of course, fees. Some brokers tout “zero commissions” on U.S. stocks but quietly charge wider spreads or overnight financing. Always test a demo account or read their execution policy to figure out if there are any hidden fees.
Can you trade US stocks with leverage in the UK?
Yes, you can trade with leverage but it depends how you're accessing them. If you're trading share CFDs, leverage is usually available but capped by FCA rules. For retail traders, the max is typically 5:1 on individual equities. If you’re classified as a professional client, you might get more.
We’ve seen traders use leverage on U.S. stocks for short-term swings, especially around earnings season, but it cuts both ways. Your profit potential grows, but so does your risk exposure. Also, be aware of margin requirements changing overnight or over weekends. This can often catch traders off-guard, and an unexpected margin call can be disastrous.
How are US stocks taxed for UK traders?
Here’s where it gets technical and a bit frustrating. If you're trading actual U.S. shares, the IRS automatically takes 30% of any dividends you earn unless you submit a W-8BEN form. This form tells the U.S. tax authorities you're a U.K. resident and qualifies you for a reduced 15% withholding rate under the U.S.-U.K. tax treaty. Most brokers handle this form during account setup, but it's worth double-checking.
If you’re trading CFDs, there’s no actual dividend, just a synthetic dividend adjustment. These are treated as income and do not benefit from the U.S.-U.K. tax treaty. That means you could be taxed at a higher rate depending on your personal income band.
Capital Gains Tax (CGT) applies to profits made from both shares and CFDs, but the treatment of dividend equivalents and loss offsets can differ. You also won’t pay stamp duty on U.S. shares, which is a small win.
From our experience, it’s wise to keep meticulous records and, if you're trading in size, talk to an accountant. The line between capital gains and income can blur fast, especially with leveraged products.
Is it cheaper to trade US stocks through a forex broker?
Sometimes, yes — but not always. Forex brokers often promote zero-commission U.S. stock trading. But that doesn’t mean it’s free. The costs may be built into spreads, currency conversion fees, or overnight financing charges, especially for CFD positions.
If you're trading CFDs, you may face overnight financing charges. You should always check the “cost to carry” on positions held longer than a day. Those charges can quietly eat into profits, especially during volatile weeks.
nights_stayWhat are overnight fees in CFD trading?
If you're holding U.S. stock CFDs overnight, most brokers charge a small financing fee, also known as a swap. This fee reflects the cost of leverage and is applied daily. Rates vary between brokers, and they’re often higher around major events like earnings reports. Check your broker’s swap rate tables before committing to multi-day trades.
Also, watch out for hidden FX conversion fees. If your trading account is funded in GBP and the assets are priced in USD, the broker may charge a spread or fixed conversion fee that impacts both entry and exit. Some brokers are better than others on this front.
Are there risks in trading US stocks via a forex platform?
Definitely. The biggest is asset structure. With CFDs, you don’t own the underlying share. That means no voting rights, no actual dividends, and, critically, no FSCS protection if the broker collapses and you're holding open trades.
FSCS protection covers client money held in segregated accounts, but not open CFD positions. If a broker fails mid-trade, recovery of funds depends on the broker’s custodial setup and whether funds were properly ring-fenced.
There’s also platform risk. Many forex brokers aren’t built around equities. So you may find limited news feeds, poor fundamentals data, or clunky watchlists. It can be easy for traders to miss a key earnings report because the broker didn’t push alerts.
Some brokers may also route trades through offshore subsidiaries or liquidity providers, which could impact your legal protections. Stick with FCA-regulated entities offering full transparency on execution and custody.
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At BrokerNotes.co, our data-driven online broker reviews are based on our extensive testing of brokers, platforms, products, technologies, and third-party trading tools. Our product testing extends to the quality and availability of educational content, market research resources, and the accessibility and capabilities of mobile platforms and trading apps. We also dive into each broker’s trading costs, such as VIP rebates, inactivity fees, custody fees, bid/ask spreads, and other fee-based data points.
Steven Hatzakis, an industry veteran with decades of experience in the forex market, leads the BrokerNotes research team. All BrokerNotes content is researched, fact-checked, and edited by the research team.
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Note: The online brokers on our site provide the ability to trade forex in one or more ways, such as non-deliverable spot forex (i.e., rolling spot contracts), contracts for difference (CFD), or other derivatives such as futures. The availability of specific markets or features will depend on your country of residence and the broker's applicable brand or entity that services your account(s).
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There is a very high degree of risk involved in trading securities. With respect to margin-based foreign exchange trading, off-exchange derivatives, and cryptocurrencies, there is considerable exposure to risk, including but not limited to, leverage, creditworthiness, limited regulatory protection and market volatility that may substantially affect the price, or liquidity of a currency or related instrument. It should not be assumed that the methods, techniques, or indicators presented in these products will be profitable, or that they will not result in losses. Learn more about foreign exchange risk.
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Founded in 2014 and acquired in 2021, BrokerNotes.co provides unbiased forex broker reviews and ratings to help traders and investors find the best broker for their needs. With over 60 brokers reviewed, our editorial team has published thousands of words of research to help our readers make informed choices.
Jeff Anberg is a Senior Editor at BrokerNotes.co and ForexBrokers.com. Along with years of experience in media distribution at a global newsroom, Jeff has a versatile knowledge base encompassing the technology and financial markets. He is a long-time active investor and engages in research on emerging markets like cryptocurrency. Jeff holds a Bachelor’s Degree in English Literature with a minor in Philosophy from San Francisco State University.
Joey Shadeck is the Content Strategist and Research Analyst for BrokerNotes.co and ForexBrokers.com. He holds dual degrees in Finance and Marketing from Oakland University, and has been an active trader and investor for close to ten years. An industry veteran, Joey obtains and verifies data, conducts research, and analyzes and validates our content.
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