Cost of Selling Shares

Most people who invest in the stock market take into account the cost of buying shares. However, when you trade with a share dealing platform, you’ll be charged for each transaction you make, which means you also need to take into consideration the cost of selling shares.

This guide can help you understand the cost of selling shares in the UK. We’ll explain the various forms of buying and selling shares in the UK and suggest cost-effective platforms to buy and sell stocks.

Cost of Selling Real Shares

Before we delve into the details of the cost of selling shares, it is crucial to understand the difference between different forms of investments. Presently, there are two options to buy and sell shares in the markets – via a share dealing platform or via Contract for Difference (CFDs).

The first option is to open an account with a share dealing investment platform that connects you to various exchanges such as the London Stock Exchange where you’ll be able to place an order and physically buy the asset outright and then get share certificates that show your ownership in the company. Further, with these brokers, you get access to various financial services such as ISAs account, SIPP, investment trusts, and dividend reinvestments programs.

When you choose an investment platform that directly connects you to the exchange like Hargreaves Lansdown, Barclays, etc – you’ll have to pay a fixed trading dealing commission that typically ranges between around £1.5-£10.  Additionally, on traditional brokers platforms, you’ll have to pay a stamp duty tax of 0.5% on the transaction when you buy shares electronically and account management fees.

The second option is to buy and sell shares via derivatives, or in other words, Contract for Difference. These are basically outside of the exchange contracts that enable two sides to speculate on the price of the asset without owning it. With CFDs, you are not required to pay any share dealing charges nor stamp duty tax, or account management fees. Instead, you pay only the buy and sell spread.

Another option is to open an account with FinecoBank that allows you to trade shares outright or in the form of CFDs. For buying shares outright, this broker has a 100 free trades bonus that enables you to buy and sell shares and bonds without any commission charges in the first 100 trades you make.

Generally, it is important to remember that while there are many benefits of trading on a CFD trading account, some investors prefer to invest their money via stocks and shares ISA account (or via a self-invested personal pension, SIPP). This account type is available on traditional brokerage firms that connect users to exchanges and offers several benefits that include:

• On an ISA account, you don’t pay capital gains tax
• No tax on interest rate earned on fixed-income assets
• No tax from dividend payment from shares

Cost of Selling Shares Comparison

Cost of Selling Share CFDs

As we mentioned above, the vast majority of CFD brokers offer investors to buy and sell shares without having to pay fixed trading commissions. Instead, these brokers charge the buy and sell spread only, which is the one direct charge you’ll need to consider when selling share CFDs.

This means that if you are planning to trade frequently, a CFD platform could be the best choice as you do not have to pay any fixed trading commissions. This is particularly the case for active day traders that do not hold positions open overnight and thus, can avoid paying the swap fee.

Notably, spreads vary between different brokers and the assets being traded. As such, you need to choose a CFD broker that gives you competitive spreads and low fees. With that in mind, below you can find some of the top CFD platforms in the UK market and the cost for selling Amazon shares on each platform:

Cheapest Platforms for Selling Shares

By now, you have a better picture of the cost of selling shares in the UK. But in order to help you find the most cost-effective share dealing service to buy and sell shares, below we suggest two of the best UK stockbrokers.

1. Fineco Bank – Top Rated Online Share Dealing Platform

Another platform that offers extensive options to trade shares is Fineco Bank, an Italian bank that was founded in 1999 and specializes in online brokerage services.

If you choose the second option, you’ll be able to use a leverage ratio of 30:1 when you buy and sell US and UK shares. However, you should take into consideration that the range of shares is fairly limited when compared to other CFD platforms.

Otherwise, you can use FinecoBank to buy US shares, UK shares, and international shares outright – meaning directly from exchanges. In this case, the cost of buying and selling shares is just $3.95 and the broker has zero FX conversion rates. Best of all, if you open a share dealing account at Fineco, you’ll get a sign-up bonus that gives you 100 free trades.

When it comes to trading platforms, Fineco offers two options – a web trading platform that is easy to use and suited beginner investors and a professional trading platform known as the PowerDesk.

Pros:

Cons:

Your capital is at risk.

Conclusion

The bottom line, selling shares is another cost that people often don’t take into consideration. However, brokerage firms charge investors for each trade they make, including selling their shares. This means you’ll have to find a broker that will meet your trading demands and gives you the best trading conditions to trade shares.

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