If you’re a seasoned trader that is looking for the best bid/ask price possible on your chosen financial market – you might want to consider an ECN broker.
In doing so, you’ll gain direct access to the market participants – which includes large-scale traders, banks, and hedge funds.
In this guide, we review the best ECN brokers UK to consider in 2021 and beyond.
Top 3 ECN Brokers UK 2021
Below you will find which providers made our list of the best ECN brokers UK! Scroll down to read our in-depth review of each platform.
- eToro – Overall Best ECN Broker UK
- FXTM – Best ECN Broker for Trading Forex
- Pepperstone – Best ECN Broker for CFD Trading
Best ECN Brokers UK Reviewed
After reviewing dozens of ECN brokers currently offering accounts to UK residents, we found that the best providers are as follows:
1. eToro – Overall Best Online Broker UK
eToro is now one of the most popular online brokers globally – with over 17 million clients using the platform to buy, sell, and trade financial assets. Although the brokerage appeals to newbies, it is also highly conducive for professional traders and seasoned pros alike.
This is because eToro offers one the most competitively-priced online brokers in the market. For example, the platform charges nothing in the way of commissions, nor is there a monthly or annual maintenance fee.
UK equities listed on the London Stock Exchange can also be traded without needing to pay the standard 0.5% stamp duty fee. Unlike other UK stock brokers in the online arena, eToro does not charge you anything to buy shares and invest in stocks. This means that you can trade financial instruments from 16 non-UK exchanges without needing to pay a premium.
In terms of supported assets, eToro offers thousands of stocks, ETFs, cryptocurrencies, commodities, and forex pairs. When considering what type of broker eToro is, the platform offers high-quality order execution. In simple terms, this means that some of the exposure found at eToro is autonomously sent to tier-one liquidity providers, such as banks.
Crucially, this means that eToro makes money irrespective of which way the markets go – meaning that there no conflict of interest. If you like the sound of eToro, this FCA-regulated broker requires a minimum deposit of just $200. You can fund your account instantly with a debit/credit card or e-wallet.
- Super user-friendly online broker and trading platform
- Trade thousands of assets with tight spreads
- 100% commission-free
- You can also trade stocks, indices, ETFs, cryptocurrencies, and more
- Deposit funds with a debit/credit card, e-wallet, or bank account
- Social and copy trading
- Accepts PayPal
- Regulated by the FCA, ASIC, and CySEC
- Not suitable for advanced traders that like to perform technical analysis
67% of retail investors lose money trading CFDs at this site
2. FXTM – Best ECN Forex Broker
If you’re in the hunt for the best ECN brokers to facilitate your forex trading needs, look no further than Forex Time (FXTM).
This popular provider – which is is authorized and regulated by the FCA, offers three ECN-specific accounts to choose from. For example, the standard ECN Account allows you to trade forex with spreads of just 0.1 pips, alongside a small commission of $2 per lot.
The minimum deposit here is £500. The next option is the ECN Zero Account – which is likely to be more suitable for newbies that are looking to trade small volumes. This is because FXTM will allow you to fund your account with just £200 and you won’t pay any trading commissions. Instead, all fees are built into the spread – which starts at 1.5 pips.
Finally, if you’re a seasoned forex trader that wants to benefit from the best rates possible, FXTM Pro Account is likely to be of interest. Although this ECN broker account requires a minimum deposit of £25,000 – you will effectively eliminate all trading-related fees. This is because FXTM won’t charge you any commissions or fixed spreads.
When it comes to supported currency pairs, FXTM offers heaps of minors, majors, and exotics. This platform also made our list of the best ECN forex brokers because in addition to currencies – it allows you to trade commodities, indices, and several other CFD markets. Finally, all ECN trading at FXTM is facilitated via the popular third-party platform MT4.
- Provides heaps of educational resources
- Great for market insights and market research
- Several account types supported
- Extensive forex department
- No commissions when trading currencies
- Great reputation and heavily regulated
- Does not support US traders
There is no guarantee you will make money with this provider.
3. Pepperstone – Best ECN Broker for CFD Trading
If you’re based in the UK and looking for the best ECN brokers – but not prepared to deposit £25,000 at FXTM, it might be worth considering Pepperstone.
This popular online platform isn’t an ECN broker per-say – but it still gives you access to ECN spreads. This is because the platform executes your orders at a rate equal to those offered by ECN brokers, so you’ll still be trading at institutional prices.
And best of all – rather than demanding £25,000 for the pleasure of obtaining ECN spreads, Pepperstone requires a minimum deposit of just $200. In terms of supported markets, this top-rated platform covers several asset classes – all of which are offered via CFD trading instruments.
This includes forex, stocks, indices, and commodities. When it comes to fees, the Pepperstone Razor Account – which is what you will need to get ECN prices, comes with a minimum spread of 0 pips on major markets like EUR/USD. The commission itself amounts to just £4.59 per £100,000 traded.
You can easily get money into your Pepperstone account, with the platform supported Visa, MasterCard, bank transfers, and even Paypal. And of course, this top-rated provider is authorized and regulated by the FCA – so safety should be of no concern.
- ECN spreads available via the Razor Account
- Trade from 0 pips on EUR/USD
- Supports CFDs via stocks, indices, forex, and commodities
- Regulated by the FCA
- Deposit and withdraw funds with Visa, MasterCard, and Paypal
- Not a true ECN broker
There is no guarantee you will make money with this provider.
What is an ECN Broker?
The Electronic Communications Networks (ECN) is the financial intermediary that allows big banks and other instructions to trade assets on a direct basis. With the elimination of third-party dealers, ECN platforms offer the most competitive trading fees possible.
In fact, there is often no difference between the bid and ask price at all – meaning that ECN providers allow you to trade at zero spreads. Therefore, ECN brokers are simply online trading platforms that give you direct access to the ECN system. As ECN brokers often attract huge trading volumes, they are able to provide a significant liquidity pool.
This is crucial if you are looking to trade assets that would otherwise be difficult to reach. On the other hand, ECN brokers might not be suitable for you if you are a casual retail trader.
This is because providers that have access to the ECN system often require a substantial minimum deposit. In addition to this, the minimum trade size is also like to be high – so again, this won’t be conducive for accessing the financial markets with a small amount of capital.
Benefits of Choosing an ECN Broker
If you’re wondering whether or not an ECN broker is right for you and your financial goals – check out the benefits listed below.
Perhaps the most attractive aspect of using the best ECN brokers to trade online is that you will benefit from industry-leading spreads. This is because the ECN system does not require a third-party to facilitate or execute trades.
On the contrary, you and your fellow traders are essentially buying and selling assets on a peer-to-peer basis. In turn, you will often find that the best ECN brokers do not charge any spreads at all.
With that said, you don’t need an ECN broker to benefit from really competitive spreads. Instead, there are many low spread brokers active in the UK that do not have access to the ECN system – but still offer zero commissions and low account minimums.
High Liquidity Levels
As we briefly mentioned earlier, the best ECN brokers usually possess the largest liquidity levels. For those unaware, liquidity simply refers to the amount of capital that is available in a particular market. The more capital there is, the easier it is for your trade to be executed.
After all, in order to buy an asset you need to find somebody that is willing to sell it – and visa-versa. Now, when liquidity levels are less than desirable, this can have a major impact on your ability to enter and exit a trade.
Furthermore, and perhaps most importantly, low liquidity levels result in wider spreads – meaning that it costs you more to access your chosen market. In the case of the best ECN brokers, you are trading alongside hedge funds and financial institutions, so liquidity will never be an issue!
No Conflict of Interest
When you use an online broker that doesn’t utilize the ECN system, there is every chance that there will be a conflict of interest. This is because trading platforms have been known to ‘bet against’ their clients. In doing so, they will always have an advance, as brokers simply have access to better rates and spreads than the Average Joe trader.
- For example, if you were to place a £2,000 sell order on GBP/USD, the broker in question might place the exact opposite position.
- In this scenario, that would be a £2,000 buy order on GBP/USD.
- In turn, if your trade results in a loss, your broker will be delighted – as it placed a contrasting trade.
This isn’t a good relationship to have with a financial provider that is supposed to have your best interests at heart.
The good news is there is never a conflict of interest when using the best ECN brokers. Once again, this is because you are effectively trading with other market participants. As such, you know that the broker is simply there to execute your positions.
Drawbacks of Choosing an ECN Broker
While the benefits of choosing an ECN broker are clear, several drawbacks also need to be considered.
High Account Minimums
The biggest drawback of using an ECN broker is that they often demand very high account minimums. For example, FXTM has a minimum deposit of £25,000 in place to access its premium ECN account.
The main reason for this is that you will be trading with major market players. Whether that’s hedge funds or banks – these institutions are not interested in small volumes. A
s such, if you want to use a ‘true’ ECN broker, expect to have at least five figures at your disposal.
An additional drawback of using an ECN broker is that the provider in question will almost always charge a fixed commission. Now, this is actually great for those that wish to trade large volumes – as a fixed commission will translate into a very low variable rate.
However, if you are a casual trader that is only looking to speculate with modest amounts, a fixed commission can be costly.
- For example, let’s supposed that the ECN broker charges $10 per slide.
- This means that you will pay $10 when you enter the position and again when you close it.
- If you staked $500, a flat fee of $10 would amount to a variable commission of 2% This means that you need to make gains of 2% just to break even – and that’s before you even factor in the spread.
- If, however, you staked $30,000 on the trade, a $10 flat fee would amount to a variable commission of just 0.033%
As you can see from the above, while the fixed commission system that the best ECN brokers employ is highly conducive for large-scale trading, it’s not if you want to trade with low amounts.
ECN Brokers Fees Comparison
Below you will find a break down of the main fees charged by the ECN brokers we discussed earlier on this page.
|Pepperstone||£4.59 per £100,000||0 pips||$200|
How to Get Started with an ECN Broker
If you’re looking for the best ECN brokers because you want to trade online at extremely low fees – eToro is a great option to consider. As we discussed, although it’s not a ‘true’ ECN broker, you will benefit from 0% commissions and tight spreads.
As such, the guidelines below will show you how to start trading in eToro in less than 10 minutes!
Step 1: Open an Account and Upload ID
Visit the eToro website, click on ‘Join Now’ to get the account opening process underway.
You will be asked to enter the following information:
- First and Last Name
- Home Address
- Date of Birth
- Mobile Number
- Email Address
- National Insurance Number
You will also need to choose a username and password.
Step 2: Confirm Identity
It takes just minutes to verify your identity at eToro, so it’s best to get it out of the way now. After all, your deposits will be capped to just $2,250 and you won’t be able to make a withdrawal.
To get verified instantly – simply upload a copy of your:
- Valid passport or driver’s license
- Utility bill or bank account statement (issued within the last 3 months)
Step 3: Add Funds to Your Trading Account
Unlike ‘true’ ECN brokers, eToro doesn’t require a huge deposit upfront. On the contrary, you can get started with this commission-free platform from just $200 – or about £160.
Deposit methods supported on eToro include:
- Debit/Credit Card (Visa, MasterCard, Maestro)
- UK Bank Transfer
Step 4: Place a Commission-Free Trade
Now that you have opened an account and made a deposit, you can start trading!
Click on ‘Trade Markets’, which you will find on the left-hand side of the screen. You can choose your preferred asset class – such as stocks, foreign exchange, or cryptocurrencies.
Once you click on the ‘Trade’ button next to your preferred market, an order box will appear. Here, you simply need to enter the amount that you wish to stake on the trade. In our example, we are placing a ‘buy order’ on Facebook stocks at a stake of $50.
Finally, click on ‘Open Trade’ to complete your commission-free trade!
If you are looking for an ECN broker, then the likelihood is that you are sick of paying over the odds to trade. After all, most brokers that service the retail client scene charge a combination of high commissions and wide spreads. The key problem is that unless you are prepared to fund your ECN broker account with a sizable sum, you likely won’t get access.
The good news is that there is now an alternative in the shape of eToro. This FCA-regulated broker allows you to trade thousands of financial instruments without paying a single penny in commission. Spreads are also tight – and the minimum deposit is just $200.
eToro – Overall Best ECN Broker UK
67% of retail investor accounts lose money when trading CFDs with this provider.
What is an ECN broker?
An ECN broker is an online trading platform that has direct access to the Electronic Communications Network. This means that you will be trading alongside major market participants - such as banks and hedge funds. In turn, ECN brokers allow you to trade at really tight spreads and ultimately - ensure that there is no conflict of interest .
What is the difference between ECN and STP?
While ECN brokers give you access to major market participants, Straight Through Processing (STP) brokers do things slightly differently. This is because STP brokers can choose the liquidity providers they use to execute your trade - meaning that you could be a conflict of interest.
How does ECN trading work?
By using an ECN broker, you don't need to go through a middleman to get your order executed. Instead, the ECN system acts as a hub for major traders, allows you to place buy and sell orders on a peer-to-peer basis.
What is the minimum deposit at ECN brokers?
ECN brokers typically require substantial minimum deposits for you to gain access to the ECN system. At FXTM, for example, its premium ECN Account requires a minimum deposit of £25,000.
Are ECN gold brokers good?
This depends on your financial profile. For example, ECN brokers typically provide the best spreads in the market and you can be sure that no conflict of interest is taking place. However, ECN broker also charge fixed commissions, which won't be conducive for trading with small amounts.