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Level 2 trading platforms refer to the platforms that allow traders to view the order books for any particular security so that they can see what the pending orders are, what prices they’re at, and what orders have just been fulfilled.

In this guide, we review the different Level 2 trading platforms available to investors in the UK. We also go through the advantages, disadvantages, and the different asset classes available for trading on Level 2 trading platforms.

Best Level 2 Trading Platforms UK List 2022

While there are several different Level 2 trading platforms that you can use in the UK, very few truly combine access to Level 2 order books with a wide range of assets, low fees, and high leverage, making for the perfect trading experience. The top 3 Level 2 brokers that you can use are eToro, VanatgeFX, and Pepperstone, each of which has been reviewed below.

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Cost per trade

£ 20

Account Fees

£ 20 per Month
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Rating

Total Fees (over 12 months)
£ 0.00
What we like
  • Buy shares and ETFs with 0% commissions
  • Social and copy trading network
  • Invest and trade crypto with low fees
Cost per trade
Account Fees
Mobile App
9/10
Features
CFDs Copy Portfolio ETFs Funds Crypto Robo Advisor Stocks
Payment methods
Credit Card Neteller Paypal Sepa Transfer Skrill

Account Information

Account from
$10
Deposit Fees
$0
Inactivity Fees
$10/month after 12 months
Leverage
1:5
Margin trading
Min. Trade
$10
Trade fees
Spreads
Withdrawal Fees
$5

Fees per trade

CFDs
0.09%
Copy Portfolio
0%
Crypto
0.75%
DAX
0.01%
ETFs
0.09%
Stocks
0.09%
Total Fees (over 12 months)
£ 0.00

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 68% of retail investor accounts lose money when trading CFDs with this provider.

Account Information

Account from
$10
Deposit Fees
$0
Inactivity Fees
$10/month after 12 months
Leverage
1:5
Margin trading
Min. Trade
$10
Trade fees
Spreads
Withdrawal Fees
$5

Fees per trade

CFDs
0.09%
Copy Portfolio
0%
Crypto
0.75%
DAX
0.01%
ETFs
0.09%
Stocks
0.09%

Rating

Total Fees (over 12 months)
£ 0.01
What we like
  • Access to thousands of share CFDs with 0% commission
  • Trade major
  • minor and exotic currency pairs with tight spreads
Cost per trade
Account Fees
Mobile App
9/10
Features
CFDs ETFs Funds Stocks
Payment methods
Credit Card Paypal Sepa Transfer Sofort

Account Information

Account from
£20
Deposit Fees
£0
Inactivity Fees
£0
Leverage
1:5
Margin trading
Stocks
5000+
Trade fees
Spreads
Withdrawal Fees
£0

Fees per trade

DAX
0.006%
ETFs
0.52%
Stocks
0.1%
Total Fees (over 12 months)
£ 0.01

CFDs are complex instruments and carry a high risk of losing money quickly through leverage. 72.6% of retail investor accounts lose money when trading CFDs from this provider.

Account Information

Account from
£20
Deposit Fees
£0
Inactivity Fees
£0
Leverage
1:5
Margin trading
Stocks
5000+
Trade fees
Spreads
Withdrawal Fees
£0

Fees per trade

DAX
0.006%
ETFs
0.52%
Stocks
0.1%

Rating

Total Fees (over 12 months)
£ 0.02
What we like
  • Low fees
  • Supports algo trading
  • High quality charting
Cost per trade
Account Fees
Mobile App
7/10
Features
CFDs Copy Portfolio ETFs Crypto Stocks
Payment methods
Credit Card Neteller Sepa Transfer Skrill

Account Information

Account from
$100
Deposit Fees
$0
Leverage
1:10
Margin trading
Stocks
700+
Trade fees
Spreads
Withdrawal Fees
$0

Fees per trade

CFDs
0.004%
Crypto
0.001%
DAX
0.01%
ETFs
0.4%
Stocks
0.4%
Total Fees (over 12 months)
£ 0.02

Trading financial products on margin carries a high degree of risk and is not suitable for all investors. Please ensure you fully understand the risks and take appropriate care to manage your risk.

Account Information

Account from
$100
Deposit Fees
$0
Leverage
1:10
Margin trading
Stocks
700+
Trade fees
Spreads
Withdrawal Fees
$0

Fees per trade

CFDs
0.004%
Crypto
0.001%
DAX
0.01%
ETFs
0.4%
Stocks
0.4%

Rating

Total Fees (over 12 months)
£ 0.35
What we like
  • No spreads
  • Educational content
  • Trade CFDs with Zero-Spreads and Low Commissions
Cost per trade
Account Fees
Mobile App
8/10
Features
CFDs ETFs Crypto Stocks
Payment methods
Credit Card Neteller Sepa Transfer Skrill

Account Information

Account from
$10
Deposit Fees
0% to 4%
Inactivity Fees
$5/month after 90 days
Leverage
1:5
Margin trading
Trade fees
Commissions or Spreads
Withdrawal Fees
29$ or 1%

Fees per trade

CFDs
0.003%
Crypto
0.2%
DAX
0.006%
Stocks
0.33%
Total Fees (over 12 months)
£ 0.35

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75.3% of retail investor accounts lose money when trading CFDs with this provider.

Account Information

Account from
$10
Deposit Fees
0% to 4%
Inactivity Fees
$5/month after 90 days
Leverage
1:5
Margin trading
Trade fees
Commissions or Spreads
Withdrawal Fees
29$ or 1%

Fees per trade

CFDs
0.003%
Crypto
0.2%
DAX
0.006%
Stocks
0.33%

Rating

Total Fees (over 12 months)
£ 3.50
What we like
  • Forex spreads as low as 0.6 pips
  • Integration with MT4 and MT5 platforms
  • Organized training sessions
Cost per trade
Account Fees
Mobile App
8/10
Features
CFDs Copy Portfolio Crypto Stocks
Payment methods
Credit Card Neteller Skrill

Account Information

Account from
$1
Deposit Fees
$0
Inactivity Fees
$0
Leverage
1:10
Margin trading
Trade fees
Spreads
Withdrawal Fees
$1 to $30

Fees per trade

CFDs
0.003%
Crypto
0.21%
DAX
0.019%
Stocks
0.7%
Total Fees (over 12 months)
£ 3.50

Your capital is at risk.

Account Information

Account from
$1
Deposit Fees
$0
Inactivity Fees
$0
Leverage
1:10
Margin trading
Trade fees
Spreads
Withdrawal Fees
$1 to $30

Fees per trade

CFDs
0.003%
Crypto
0.21%
DAX
0.019%
Stocks
0.7%

1. eToro – Best Overall Level 2 Broker in the UK 2022

best level 2 trading platform uk eToro is among the most popular stock trading platforms in the world with over 17 million clients worldwide at present. They have a very wide variety of financial instruments that you can buy and sell, spread across asset classes including stocks, indices, ETFs, cryptocurrencies, currencies, and commodities. The platform is conducive to all levels of expertise from beginners to experts and has been designed in a way that makes it very easy to navigate. This means that you do not have to learn how to use a completely new platform just to be able to trade on eToro.

eToro is also one of the most competitive brokers in terms of its fees and pricing models. For example, they do not have a fixed commission on each trade, nor do they charge an annual account maintenance fee. At the same time, their inactivity fee also only kicks in if your account has been inactive for 6 or more months at a scratch.

level 2 trading platform uk

While eToro is not strictly a Level 2 broker, they’re also not a simple market maker. The platform offers high-quality order execution, meaning that the exposure found at eToro is automatically sent to tier-one liquidity providers such as banks. This means that eToro makes money irrespective of the direction in which the markets move. This eliminates the problem of the conflict of interest between the brokerage and the trading desk of the platform. In addition to this, they’re a social trading platform, therefore you can view what people think about a particular asset and understand changing market sentiments through this, thus serving the same functionality as a Level 2 broker. It is also insured and regulated by several regulatory agencies around the world, including the FCA, making it a safe place for you to trade.

eToro fees:

Fee Amount
Stock trading fee Free
Forex trading fee Spread, 2.1 pips for GBP/USD
Crypto trading fee Spread, 0.75% for Bitcoin
Inactivity fee $10 a month after one year
Withdrawal fee $5

Pros

  • User-friendly trading platform and mobile app
  • Access to social trading and copy trading features
  • 100% commission-free
  • Option to trade a variety of assets including stocks, currencies, ETFs, and indices
  • Ability to deposit funds easily through a bank transfer, credit/debit card, or e-wallet
  • Insured and regulated by the FCA, ASIC, and the CySEC

Cons

  • Not suitable for advanced technical analysis

67% of retail investor accounts lose money when trading CFDs with this provider.

2. VantageFX – Best Level 2 Broker UK 2022

VantageFX is the best Level 2 broker in the UK for 2022 that offers a variety of different account types. It has a high leverage account that provides you with higher leverage than most other similar platforms, and a cost-effective trading solution that helps you minimise the fees that you pay to trade on the platform. It is the ideal platform for high-volume traders that are looking for the best execution speeds combined with competitive spreads and a fully transparent trading environment that provides access to different liquidity providers.

There are three primary account types that VantageFX provides, all of which offer access to the Level 2 Order Book. The first is the Standard STP account, which is an ideal trading solution for beginners who do not wish to pay commissions. The second option, the Raw ECN account, is very popular among seasoned traders who wish to get an account that provides high leverage with only a low deposit requirement. The third option is the Pro ECN account that was designed for professional traders that wish to get the fastest execution with low commissions and zero spreads, designed to be used for automated trading strategies.

what is level 2 trading

VantageFX offers access to over 300 markets and forex pairs. It also provides leverage of up to 500x, which is easily one of the highest in the industry. Furthermore, you can also trade on VantageFX via MT4 and MT5, allowing for advanced technical analysis and charing techniques to be deployed.

VantageFX fees:

Fee Amount
Stock trading fee Variable spread
Forex trading fee Spread, 1.4 pips for GBP/USD
Crypto trading fee N/A
Inactivity fee Free
Withdrawal fee Free

Pros

  • True Level 2 broker with 2 different ECN account types
  • Zero spreads
  • Supports MT4 and MT5 platforms
  • High leverage ratio of up to 500x
  • Access to over 300 markets
  • Swap-free trading alternatives are available

Cons

  • Charges a deposit and withdrawal fee

Your capital is at risk

3. Pepperstone – The Best Level 2 Broker for Low Fees

level 2 trading platform free Pepperstone is another very popular Level 2 broker that has over 500,000 users worldwide. It is a no-dealing desk broker and offers both ECN and STP accounts by providing access to some of the top liquidity providers in the industry, such as banks.

It provides access to over 800 instruments and CFD forex pairs through a range of advanced trading platforms. When you choose to set up an account with Pepperstone, you have the option to choose which platform you wish to trade through, based on your level of experience and trading requirements. This includes the MT4 and MT5 platforms alongside other niche platforms and trading tools such as cTrader, MyFXBook, MirrorTrader, and RoboX.

free level 2 trading platform

They offer two types of accounts, the Razor and the Standard accounts. The Razor, as the name suggests, is an ideal trading account for those looking to scalp trade, whereas the Standard is much more suitable for all other trading requirements. All in all, Pepperstone is definitely known for having one of the lowest spreads and fees in the market, being as low as 0.1 pips sometimes for major currency pairs like the EUR/USD.

Pepperstone fees

Fee Amount
Stock trading fee $0.02 per US stock
Forex trading fee Spread, 1.59 pips for GBP/USD
Crypto trading fee Spread, 50 pips for Bitcoin
Inactivity fee Free
Withdrawal fee Free

Pros

  • Highly regulated
  • More than 800 instruments available to trade
  • Excellent client area to manage your account
  • Wide range of choices in terms of the platform and trading tools
  • Offers cryptocurrency trading too
  • Highly competitive spreads

Cons

  • Charges swap fees

Your capital is at risk

Why Choose a Level 2 Trading Platform?

There are several reasons for you to choose a Level 2 platform over a platform that does not provide access to the Level 2 order books. For starters, traders that trade primarily on market sentiments need to know what the market is thinking, and the best way to do this is through the use of the Level 2 order book. By looking at the volume as well as the prices of all pending and completed orders, you can easily ascertain what the market is thinking, and then use this knowledge to place trades accordingly. Therefore, the Level 2 trading book is very useful for day traders who do not keep their trades open for long periods of time and therefore rely on the market sentiments and the resultant price movements in order to profit.

In addition to this, trading through a Level 2 order book ensures that there is a wider range of buyers and sellers. By bypassing the market maker and instead of dealing with other market participants directly, you can easily save money that you would otherwise have paid the broker in the form of spreads. Since commissions are fixed on every trade, and the increasing competition among brokers means that commissions are now quite low on trades, you end up spending less while trading through a Level 2 broker if you are a regular trader than you would have if you traded through a broker that charges spread. Therefore, you save money while also gaining access to a larger liquidity pool and being free from the conflict of interest that plagues market makers. Not to mention, a majority of Level 2 trading platforms and brokers that charge commissions usually have rebates in case you exceed a particular trading volume in a month, so active brokers can actually get a major part of the fees that they pay back as a rebate from the platform itself.

Another advantage is that Level 2 order books allow you to compare the live prints with the order books. The live prints refer to orders that were just executed by market makers or through the liquidity pools. If there is a large block of shares that is slowly making its way into the live prints, albeit at a lower and lower price for each trade, then you know that this is someone trying to sell off a major chunk of their share in a particular instrument, and you can take advantage of this. The same is also true for the opposite scenario if you look at a major bid order that is not getting filled despite a higher rate than the live price. This indicates that there is a large buyer who will buy the instrument at a higher rate than what it is currently trading at, indicating a good opportunity for you to sell off your shares in order to book profits or buy more shares to ride the wave alongside the major market player.

67% of retail investor accounts lose money when trading CFDs with this provider.

Which Assets Are Available in a Level 2 Trading Platform?

There are several assets that you can trade through a Level 2 trading platform, and the selection of assets is not that different from the assets traded through a normal trading platform. A list of these assets, alongside how access to a Level 2 order book is useful in each of their cases, has been provided below in detail.

Stocks

Usually, Level 2 brokers allow their traders to trade on US, UK, European, as well as other global stocks for which there is a significant enough market and the scope of a liquidity pool is available.

One of the most commonly traded asset classes through a Level 2 broker, stock trading has several advantages when done correctly through the use of a Level 2 Order book. For starters, it enables you to understand what people think about a particular company’s share. In addition to this, you can also look at large orders that are being placed, identify who is placing them, and then use this information to take on your own positions. For example, this can enable you to spot panic buyers or sellers, as well as people who are taking on large positions in anticipation of a large announcement that will move the shares in either direction. With this knowledge, you can then decide whether you wish to take on the opposite position or simply take on the same position and join their wave.

Commodities

Level 2 trading platforms also allow their traders to trade on major commodities. This could include precious metals such as gold and silver, but also other commodities such as oil, natural gas, and aluminum. Trading on commodities also usually involves the use of leverage, which most platforms allow. While the exact degree of leverage you will get access to depends on the platform you use and the level of experience you have, commodity trading usually allows you to take on large positions while only risking a small amount of your own capital.

Commodity prices are also usually affected by a lot of factors, including demand/supply issues, macroeconomic factors, as well as company-specific factors. Therefore, it might not always be easy for you to look at all the underlying factors that are responsible for the movement in the prices of a commodity. In this situation, a Level 2 order book comes in handy since it allows you to observe the movement in the prices of the commodity and take positions accordingly, without having to worry about the underlying reasons for this momentum.

Indices

Indices are also very commonly traded on Level 2 trading platforms and for good reason. An index is a collection of stocks that usually have something in common. For example, one of the most popular indices in US markets, the S&P 500, is a collection of the 500 most valuable companies that trade on the US markets. Similarly, the NASDAQ30 is the collection of the 30 most valuable stocks that trade specifically on the NASDAQ exchange. Indices can also be made on the basis of the industry that companies are in, their geographical location, as well as the market capitalisation of these companies. Investing in indices is a good way of ensuring that you eliminate the risk that comes from only investing in one company, and instead diversify your risk into multiple companies.

Bonds

Bonds and other fixed-income instruments have always been particularly attractive for investors in times of market volatility because they offer a fixed source of income and a guaranteed rate of return. This is why bonds are among the most traded instruments in the world, either as a hedge or as a primary investment tool. They are suitable for different risk appetites and offer the possibility of riskless returns, which is very attractive to investors who might not want to take on a lot of risks. There are three types of bonds:

  • Treasury bonds issued by the Treasury of countries, which usually carries the lowest risk and the lowest coupon rates.
  • Muni bonds, issued by local governments in cities, towns, and states for usage in various infrastructure and public good projects, which have a higher degree of risk and therefore pay higher coupon rates.
  • Corporate bonds, issued by companies in order to raise finances, which have different risks based on the credit score of the company.

Currencies

The forex market is the largest trading market in the world, with billions of dollars in capital being traded in and out of the markets on any given day. Currency markets are predominantly reliant on interest rates, and interest rate announcements in any country are watched very closely since they have a relationship with a country’s currency. For example, if the UK raises interest rates, then people will want to store their cash in the UK for higher interests. Therefore, there will be an increase in the demand for GBP, thereby pushing up the price as supply contracts.

In addition to this, there are other strategies too that are used to trade currencies, which are usually automated or momentum-based strategies that try to profit off of quick and short-term price movements in currencies.

67% of retail investor accounts lose money when trading CFDs with this provider.

Risks of Dealing With a Level 2 Trading Platform

There are quite a few risks associated with trading through a Level 2 platform. These have been discussed below in detail:

  • The first and biggest risk is that the overload of data that you get from a Level 2 order book might make it difficult for you to come to a clear conclusion. Often, beginner traders either start focussing on the wrong patterns or identify trends where none exist, leading to poor decision-making and losses. This is not a fault of the platform per se, but it does underline the fact that a lot of knowledge, experience, and discipline are important and necessary when trading through a Level 2 trading platform.
  • The strategy might not be very suitable or relevant if you are a fundamental trader. Therefore, the exact point where you enter a stock or the stock market sentiment at the time of entry is irrelevant since your time horizon is long enough for it to not matter.
  • Unless you are an active regular trader, you will normally pay higher fees through commissions on a Level 2 broker than you would’ve paid via spreads on a normal broker that does not provide Level 2 access. This will cut into your profits and further affect the profitability of your trading strategies.

Are Level 2 Trading Platforms Regulated in the UK?

Yes, Level 2 trading is regulated in the UK just like the trade of any other form of trading. The Financial Conduct Authority (FCA) is responsible for regulating the different brokers and platforms that provide access to Level 2 trading. The FCA ensures that all Level 2 trading is carried out in a legal and regulated manner so that the interests of all the parties are protected.

How to Get Started with a Level 2 Trading Platform – eToro

The process of opening an account on the best Level 2 trading platform, eToro, is relatively simple and straightforward and incorporates 5 steps. These have been discussed below in detail.

Step 1: Open an Account

level 2 trading platform

The first step is to open an eToro account. This can be done by simply heading over to their website and clicking on the “Join Now” button. You can either create an account from scratch or log in using your Facebook or Gmail account.

67% of retail investor accounts lose money when trading CFDs with this provider.

Step 2: Upload ID

level 2 trading

Once you have created an account, the next step is to then verify your identity. Since eToro is a highly regulated broker, they require you to submit proof of ID and address proof before your account is verified. For ID proof, you can submit any government-issued ID such as a driving license or your passport. For address proof, you could either submit a utility bill or your bank statement.

Once you have uploaded the requisite documents, the eToro verification process is pretty quick. As soon as your account has been verified, you will be able to move on to the next step.

Step 3: Deposit Funds

one click trading level 2 plugin

The next step is to deposit funds into your account. You can do so either via your debit/credit card, a bank transfer, or online wallets such as PayPal and Skrill. If you add money through an electronic waller or a debit/credit card, the funds show up in your account almost instantaneously, whereas a bank transfer might take as long as 2-3 business days.

Step 4: Trade!

The next step is to search for the market that you wish to trade on. This is as simple as going to the search bar and typing the name of the market. You can then select the market you are interested in. alternatively, you can use the menu to select an asset class and find the market you wish to trade in through that.

The last step is to place a trade. To do this, simply open an asset’s page, click on buy or sell, enter the amount you wish to trade, enter the leverage, set the stop loss, and then click on execute. The trade will be executed almost instantaneously.

67% of retail investor accounts lose money when trading CFDs with this provider.

The Verdict

In conclusion, if you’re looking to get started with a Level-2 trading platform, the best option for you is to do so via eToro. It is one of the most reliable and safe trading platforms for investors and traders of all experience levels, and it also contains among the largest variety of asset classes to trade on. Their trading platform and its functionalities are almost unparalleled in the industry, and it also has low spreads and fees on the trading of stocks and forex pairs. All in all, eToro is definitely a strong option to consider for your trading needs.

eToro – Overall Best Level 2 Trading Platform in the UK

forex level 2 trading

67% of retail investor accounts lose money when trading CFDs with this provider.

FAQs

Which are the best level 2 trading platforms?

While different Level 2 trading platforms might be appropriate for you based on your own trading needs and requirements, the overall best platforms that you should consider using are eToro, VantageFX, and Pepperstone.

What are the pros of dealing with level 2 trading platforms?

There are several pros that are associated with trading through a Level 2 trading platform, the biggest one being that you have access to the order book, thus gaining insight into the market sentiments regarding a particular security.

How much money do I need to deal with a level 2 trading platform?

The amount of money you need to start trading through a Level 2 trading platform will depend on the minimum deposit requirements for your platform. For eToro, this is $200.

Are level 2 trading platforms legal in the UK?

Yes, level 2 trading platforms are legal in the UK and are regulated by the Financial Conduct Authority (FCA).

How can I open an account on a level 2 trading platform?

The process to open an account on a Level 2 trading platform is as simple as creating an account, verifying your identity, depositing funds, and trading.

 

About Nishit Kumar
About Nishit Kumar

I'm a second year Accounting and Finance student at the University of Warwick, in addition to being an incoming Trading Analyst at Morgan Stanley. I'm passionate about the financial markets and all things finance.

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