CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Between 74-89% 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.
Between 54-87% of retail CFD accounts lose money. Based on 69 brokers who display this data. *Availability subject to regulation.
The UK’s principal stock market is the London Stock Exchange, which was founded in 1571, making it one of the world’s oldest stock exchanges. Since 2007, the London Stock Exchange has been part of the London Stock Exchange Group, which also owns the Italian Borsa Italiana, the Russell Indexes, FTSE International, Exactpro and MilleniumT, in addition to controlling stakes in clearing house company LCH and fixed income broker MTS.
The LSE ranked as the world’s seventh largest exchange by market capitalization, according to the World Federation of Exchanges. The main stock index for UK stocks is the Financial Times Stock Exchange 100 or FTSE 100 index that is composed of the top 100 stocks of blue-chip companies with the highest capitalisation listed on the London Stock Exchange. In addition to the FTSE 100 index, the exchange also lists the FTSE 250, FTSE 350, FTSE Small Cap and FTSE All-Share Indexes.
Forex traders will generally recognize the UK pound sterling (GBP) as the United Kingdom’s national currency. The GBP ranks 4th among the most popular currencies held by central banks as reserves worldwide, making up roughly 0.044% of total central bank reserves in Q4 2018, according to the International Monetary Fund (IMF).
The pound sterling was ranked fourth by the Bank for International Settlements (BIS) among the currencies that were most actively traded in April 2016. Turnover in GBP/USD and the sterling crosses made up roughly 12.8% of the forex market’s overall daily turnover in April 2016, which rose from an 11.8% share seen in April 2013.
In the UK, financial regulation for online contract for difference (CFD) and forex brokers is performed by the UK’s Financial Conduct Authority (FCA). Financial service and investment firms, online brokers and payment companies all require authorisation from the FCA before beginning to solicit clients.
If you are looking for a broker to trade forex and CFDs online through, you will want to select a well-regulated broker with a good reputation with current and past clients, since you may be entrusting them with a significant initial margin deposit to start trading.
UK online brokers usually have several different types of trading accounts for traders. These include:
With respect to other tradable assets, the LSE provides execution services in stocks, bonds, retail bonds, ETFs, derivatives, exchange-traded commodities, Gilt-edged and debt securities, global depository receipts (GDRs), and structured products. Transactions on the LSE are generally done in British Pounds (GBP).
Furthermore, the LSE has been at the forefront of exchange trading technology since 1997, when the exchange automated trading for the FTSE 100 stocks. Currently, the exchange offers several electronic trading platforms for its different asset classes.
Other considerations for trading in the UK are its tax laws. While gambling is legal in the UK and proceeds are generally not subject to capital gains tax, profits from stock transactions are taxed at the rate of 18% after a £12,000 deduction (£6,000 for trusts), rising as high as 28% for people with larger incomes.
The UK is a major trading power internationally and ranks as the fifth largest economy worldwide, according to the World Bank Group, with a GDP of $2,622,434 million in 2017. Britain has also traditionally benefited by offering high quality infrastructure in an English-speaking business centre geographically adjacent to the European Union with few trade barriers.
The country also has a regulatory and legal structure favourable for businesses, while the UK’s well-educated workforce remains an asset. Furthermore, according to export.gov, the UK offers various business opportunities including:
The UK ranked 9th overall on the World Bank’s list of countries when it comes to ease of doing business. The country was also quite strong with respect to starting a business and protecting minority investors, ranking 19th and 15th respectively. The UK remains a major market for U.S. exports of services and goods, as well as a key destination for foreign direct investment from the United States.
The UK’s largest individual nation trading partner is the United States, which means that economic pressures in the United States can have an effect on UK markets. Nevertheless, the EU multi-nation trading bloc also trades significantly with the UK, which makes the uncertainty reflected from the Brexit negotiations have an effect on both the Pound Sterling and the FTSE 100.
Since June 23rd of 2016, financial markets in the UK and the pound sterling have been notably affected by the results of the Brexit referendum held that day. The referendum involved having the British people decide whether to remain in or leave the European Union. The leave vote won with 51.9% of the vote, with 48.1% voting to remain in the EU. This result was based on a turnout of 71.8% or roughly 30 million British voters.
Cancelling Brexit altogether would require a change in British law, which no major parties presently support, although UK Members of Parliament have already rejected proposed withdrawal agreements three times. Brexit was originally scheduled to occur on March 29th, 2019, but the UK’s EU exit time has since been postponed until 23:00 hrs GMT on October 31st, 2019.
Some traders may be concerned about the high market volatility the successful Brexit vote has brought to UK markets. They may also doubt the ability of UK financial institutions to compete as effectively in a post-Brexit Europe.
The Brexit negotiations have also had an effect on the valuations of both the pound sterling and the euro. The Bank of England (BOE) has adopted measures in£ its monetary policy to deal with Brexit and has activated a swap line with the European Central Bank in the event that a “no-deal” Brexit occurs.
In addition to the geopolitical challenges traders face when dealing in UK markets, London remains one of the most expensive cities in the world to do business in. Transportation, restaurants, property prices and the general cost of living are significantly higher than in other major European cities, so those hoping to do business there will have to budget for extra costs.
Overall, traders and businesses should find the United Kingdom a safe and sophisticated country to operate in. The UK has a long history of financial market activity, and the FCA provides strong and competent oversight to financial firms and brokers
If a UK-based trader is looking for a broker to trade through, they will first want to check that the broker is FCA regulated and segregates clients’ funds from its own, unless they want to take the extra risk of dealing with a foreign broker. Any competent broker should also offer an appropriate set of asset classes, a quality trading platform with sufficient features, and a secure place to make an initial margin deposit.
Forex.com scored best in our review of the top brokers for the united kingdom , which takes into account 120+ factors across eight categories. Here are some areas where Forex.com scored highly in:
Forex.com offers one way to tradeForex . If you wanted to trade EURUSD
The two most important categories in our rating system are the cost of trading and the broker’s trust score. To calculate a broker’s trust score, we take into account a range of factors, including their regulation history, years in business, liquidity provider etc.
Forex.com have a AAA trust score . This is largely down to them being regulated by Financial Conduct Authority, segregating client funds, being segregating client funds, being established for over 19
|Regulated by||Financial Conduct Authority|
|Uses tier 1 banks|
|Segregates client funds|
Want to see how Forex.com? We’ve compared their spreads, features, and key information below.
|USD/JPY Spread||0.90||DAX Spread||250.0|
|FTSE 100 Spread||150.0|
|Platform||MT4, Web Trader, NinjaTrader, Tablet & Mobile apps|
|Base currency options||USD, GBP, EUR|
|Funding options||Bank transfer, Cheque, DebitCard,|