Spot Trading
Spot trading is the purchase and sale of an asset at the present market rate for instant delivery on a set date. This guide will cover what spot trading and spot markets are, simple definitions of the underlying concepts, plus how they compare to futures strategies. See our list of the best spot trading brokers to get started:
Top Spot Trading Brokers UK
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Founded in Australia in 2010, Pepperstone is a highly regarded broker specialising in forex and CFDs. Serving more than 400,000 clients globally, it provides access to over 1,300 financial instruments through popular platforms like MT4, MT5, cTrader, and TradingView. Its fee structure is both low and transparent. With regulation by reputable bodies such as the FCA, ASIC, and CySEC, Pepperstone guarantees a safe trading environment for traders at every level.
Instruments Regulator Platforms CFDs, Forex, Currency Indices, Stocks, Indices, Commodities, ETFs, Crypto (only Pro clients), Spread Betting FCA, ASIC, CySEC, DFSA, CMA, BaFin, SCB MT4, MT5, cTrader, TradingView, AutoChartist, DupliTrade, Quantower Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 (Retail), 1:500 (Pro) -
Established in Poland in 2002, XTB caters to over a million clients worldwide. This forex and CFD broker offers a robust regulatory framework, a diverse range of assets, and prioritises trader satisfaction. It provides an intuitive proprietary platform equipped with excellent tools to support aspiring traders.
Instruments Regulator Platforms CFDs on shares, Indices, ETFs, Raw Materials, Forex currencies, cryptocurrencies, Real shares, Real ETFs FCA, CySEC, KNF, DFSA, FSC, SCA, Bappebti xStation Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 -
Founded in 1989, CMC Markets is a reputable broker publicly listed on the London Stock Exchange. It holds authorisation from top-tier regulators such as the FCA, ASIC, and CIRO. The brokerage, which has received multiple awards, boasts a global membership exceeding one million traders.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, ETFs, Treasuries, Custom Indices, Spread Betting FCA, ASIC, MAS, CIRO, BaFin, FMA, DFSA Web, MT4, TradingView Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 (Retail), 1:500 (Pro) -
FXCC, a well-established brokerage since 2010, offers cost-effective online trading. Registered in Nevis and regulated by CySEC, it is distinguished by its ECN conditions and absence of a minimum deposit requirement. The account opening process is efficient, taking under five minutes.
Instruments Regulator Platforms CFDs, Forex, Indices, Commodities, Crypto CySEC MT4, MT5 Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:500 -
IC Markets is an internationally acclaimed forex and CFD broker, admired for its competitive pricing, diverse trading instruments, and superior technology. Established in 2007 and based in Australia, the firm is under the regulation of ASIC, CySEC, and FSA. It has successfully drawn over 180,000 clients from more than 200 nations.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Bonds, Futures, Crypto ASIC, CySEC, FSA, CMA MT4, MT5, cTrader, TradingView, TradingCentral, DupliTrade, Quantower Min. Deposit Min. Trade Leverage $200 0.01 Lots 1:30 (ASIC & CySEC), 1:500 (FSA), 1:1000 (Global) -
Founded in 2006, FxPro has built a reputation as a reliable non-dealing desk (NDD) broker, providing trading access across more than 2,100 markets to over 2 million clients globally. It has received over 100 industry awards, reflecting its favourable conditions for active traders.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Futures, Spread Betting FCA, CySEC, FSCA, SCB, FSA FxPro Edge, MT4, MT5, cTrader, AutoChartist, TradingCentral, DupliTrade, Quantower Min. Deposit Min. Trade Leverage $100 0.01 Lots 1:30 (Retail), 1:500 (Pro) -
Founded in 1974, IG is a part of IG Group Holdings Plc, a publicly listed brokerage (LSE: IGG). The company provides spread betting, CFD, and forex trading, offering access to over 17,000 markets. Its platforms and investing apps are notably user-friendly. Over the past 50 years, IG has consistently been an industry leader, excelling in all essential areas for traders.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, ETFs, Futures, Options, Crypto, Spread Betting FCA, ASIC, NFA, CFTC, DFSA, BaFin, MAS, FSCA, FINMA, CONSOB, AFM Web, ProRealTime, L2 Dealer, MT4, TradingView, AutoChartist, TradingCentral, ProRealTime Min. Deposit Min. Trade Leverage $0 0.01 Lots 1:30 (Retail), 1:222 (Pro) -
IC Trading belongs to the reputable IC Markets group. Designed for dedicated traders, it offers highly competitive spreads, dependable order execution, and sophisticated trading tools. However, it operates from Mauritius, an offshore financial centre, allowing high leverage but within a less regulated environment.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities, Bonds, Cryptos, Futures FSC MT4, MT5, cTrader, AutoChartist, TradingCentral Min. Deposit Min. Trade Leverage $200 0.01 Lots 1:500 -
Eightcap, an acclaimed broker regulated by the FCA, offers exceptionally low trading costs. Recognised as the top-rated brand by TradingView's vast user base of 100 million, traders can directly access the platform. UK traders can open a live account with a minimum deposit of just £100.
Instruments Regulator Platforms CFDs, Forex, Stocks, Indices, Commodities ASIC, FCA, CySEC, SCB MT4, MT5, TradingView Min. Deposit Min. Trade Leverage £100 0.01 Lots 1:30 -
Established in 1999, FOREX.com is now integrated into StoneX, a prominent financial services entity catering to more than one million clients globally. The broker is regulated in numerous jurisdictions, including the US, UK, EU, and Australia. It offers a vast array of markets beyond forex, delivering competitive pricing on state-of-the-art trading platforms.
Instruments Regulator Platforms Forex, CFDs, Stocks, Indices, Commodities, Futures, Options, Crypto NFA, CFTC, CIRO, FCA, CYSEC, ASIC, SFC, FSA, MAS, CIMA MT4, MT5, TradingView, eSignal, AutoChartist, TradingCentral Min. Deposit Min. Trade Leverage $100 0.01 Lots 1:30
What Is Spot Trading?
Spot trading is the buying and selling of financial instruments at the current market rate, which is also known as the spot price. This style of investing has instant delivery of the asset, making it a popular form of trading for short-term speculators like day traders. This is because the nature of the product means there is no expiry date and spreads are typically low.
Trading on the spot market, also known as the cash market, can be done directly with popular assets like stocks, forex and indices, alongside derivatives like CFDs and spread betting. With these derivatives, you do not need to own or deliver the underlying assets, instead deriving profits directly from movements in their values.
IG Index, for example, provides UK traders with the choice to spot trade both the underlying asset as well as CFDs and spread bets.
What Is The Spot Market?
The spot market is a financial marketplace where investors and speculators carry out spot trading, whether on equities or derivatives. It is a publicly available market that allows for instantaneous trading of assets and products between buyers and sellers. The underlying assets of these trades are usually transferred immediately, resulting in it being called trading “on the spot”.
While the two parties agree for instant delivery, the UK standard settlement periods still apply; for example, this is a T+2 settlement period for equities.
Many of the world’s most popular exchanges are spot markets, including:
Spot Price Explained
The spot price is the current price of the financial asset. It is at this price that traders can immediately buy or sell the instrument in question.
The spot price is created by buyers and sellers posting their buy and sell orders to a broker/exchange. Every time an order gets filled, the spot price adjusts according to the next order. Therefore, very liquid spot trading markets can see their spot prices changing many times each second, while more illiquid markets could have substantial periods of inactivity.
Spot Trading Vs Futures Trading
Spot trading is often contrasted with futures. This is because spot positions are traded at the spot price for instant delivery (or the earliest possible delivery). Futures, on the other hand, agree on a price at the present but deliver the payment and underlying assets at a chosen later date. This means that you set a target price that determines the success of the position, while spot positions are successful simply by rising above (or below) the spot price.
While this may appear to make spot trading the superior approach, the associated fees over long periods can bring its potential profitability below futures over the long term.
Comparing Spot Trading Brokers
When it comes to spot trading, choosing the best broker is key to optimising your experience. Brokers offer different features, restrictions, benefits and disadvantages. Some allow for speculating upon direct equity assets while others are focused on CFD trading. Some may offer access to exotic stock exchanges or cryptocurrency derivatives that others do not, meaning you can access a greater range of investment opportunities.
Key areas to compare spot trading brokers include:
Assets
Online brokers have access to different exchanges and asset ranges. Most UK spot trading firms will have access to the London Stock Exchange but some may also grant access to foreign exchanges like the NYSE or TYO. Furthermore, some firms may offer the underlying assets directly from these exchanges, while others may trade CFDs or spread bets based on those assets.
The type of assets you want to speculate upon and the exchanges that sell these products will help narrow down which brokers you should choose from.
Trading Platforms
The trading platform is where you will spend your time placing orders and performing technical analysis. As such, it is one of the most important things to consider when choosing a spot trading broker.
Some platforms, such as MetaTrader 4 and MetaTrader 5, are designed to provide sophisticated and powerful tools to retail investors, allowing for complex technical analysis and the creation of automated trading bots.
Other spot trading brokers offer bespoke platforms, which are usually designed with ease of use and intuitive navigation in mind, making them more accessible to newer traders.
Fee Structure
Securing spot trading profits involves maximising returns and minimising costs. As such, you will want to find a brokerage that offers all of the features you need at the lowest cost possible.
How fees are designed varies between spot trading brokers. Some will have incredibly tight or even raw spreads but may also place a commission on opening/closing trade. Others may have wider spreads but with the benefit of zero commission. Moreover, some brokers charge deposit or withdrawal fees, while others may follow a freemium model, giving access to more features with monthly payments.
Muslim traders should check for specialised Islamic accounts offered by most major CFD brokers. These halal accounts forgo overnight swap rates, which can be debited or credited.
Regulation
Regulated brokers are much safer to trade with, especially if regulated by a top financial regulator, such as the UK’s FCA. Such firms will have better investor protection measures in place, such as negative balance protection and investor compensation insurance.
Unregulated brokers may entice traders with welcome bonuses and high leverage opportunities but bring additional risks.
Education & Research
Newer or less experienced traders may want to find a broker that offers competitive educational resources. Many top spot trading firms offer educational facilities on their platforms, websites or social media accounts. These typically include guides on how to trade on their platforms, glossaries of key terms, webinars or seminars on spot trading principles, strategy guides and more.
Research is another important factor to consider. Brokerage firms that offer insightful research resources will help in your understanding of the current financial landscape and an asset’s recent price movement, allowing you to make more informed investing decisions.
Spot trading brokers typically provide research through news articles, earnings reports, trading analyses, signals, financial analyses and analytical tools.
Advantages Of Spot Trading
- Real-time pricing
- Immediate delivery
- Simple to understand
- Typically high liquidity
- Lower minimum volumes
- Equities & derivatives supported
Disadvantages Of Spot Trading
- Physical delivery may be difficult
- Short positions only available with derivatives
How To Start Spot Trading
Spot trading is a straightforward approach to financial speculation and is popular because of this. It is simple to get started with this investing style as the concepts involved are more intuitive than some alternatives. Follow our step-by-step guide below to begin spot trading today.
- Choose A Broker: Picking the right broker is important in ensuring your online spot trading experience is efficient and relatively secure. Above, we go through how to best compare spot trading brokers for your needs.
- Set Up An Account: Registration processes vary but most require you to fill out personal details like your name, country of residence, nationality, phone number and email address. You may also have to complete a KYC section, typically providing some proof of identification.
- (Optional) Open A Demo Account: This will let you practise spot trading on the broker’s platform using virtual funds. Using this, you can get accustomed to the platform and try implementing your investing strategy without risking real capital.
- Deposit Funds: This can usually be done by going into your broker’s account portal and finding the Deposit tab. Here, you will need to choose your deposit method (e.g. debit/credit card, bank transfer, Neteller). Follow the steps and guide and provide the required details, including the amount you want to deposit.
- Choose An Asset: Which asset you choose to speculate upon will depend on what you know and how much you want to research. The more you understand about an asset, the more informed your decisions will be. Even if you are looking to invest purely through technical analysis, understanding the background market of the asset in question will give you an advantage when developing your indicators and signals.
- Place A Trade: Once you have decided upon an asset for spot trading, wait for the right time and then buy the asset. When it is time, go to the asset’s page or price chart and click the Buy asset button. Here, you will be able to choose the parameters of the order, including volume, order type and a stop loss limit. Once you are happy with the details of your order, confirm the transaction.
- Close Your Position: Spot trades have no expiry date, so the asset can be held for as long as you want. Following your strategy, you will reach a point when it is time to sell the asset and realise your returns.
Spot Trading Order Screen – IG
Should You Start Spot Trading?
Spot trading is one of the most popular forms of investing as it is available for most financial assets and allows for immediate delivery of assets, funds and results. Most of the world’s leading exchanges, such as the LSE and NYSE, are spot exchanges. As such, understanding spot markets is key in the realm of online retail investing.
Use our ranking of the best spot trading brokers to start trading.
FAQ
What Is Spot Trading?
Spot trading is the act of buying/selling a financial instrument for instant delivery on the spot date at the spot price. This often involves the physical delivery of the asset in question, although derivative spot contracts may not require this.
What Assets Can You Spot Trade?
Spot trading is buying or selling an asset for its current price at an agreed time. As such, most financial instruments can be speculated upon in this way, including shares, commodities, forex, cryptocurrencies, indices, ETFs and even interest-rate products like bonds.
Is Spot Trading Halal?
Spot trading is arguably halal as it is simply buying or selling an asset instantly at any point in time. When you place the order, the asset or funds can be delivered immediately. However, some derivative products have associated overnight swaps for longer-term positions and these can be taken from or credited to your account, potentially making them haram. This can be avoided by opening a specialised Islamic account, which most major UK brokers offer.
Is Spot Trading Available To British Traders?
The London Stock Exchange is one of the world’s most important stock exchanges and it is a spot exchange, allowing for the instant purchase or sale of LSE equities. As such, many UK brokers will offer spot trading on the LSE, if not on foreign exchanges as well. Any broker that allows you to instantly buy or sell an investment product is a spot trading broker.
What Is The Best Spot Trading Broker In The UK?
There is no “best” broker for every type of trader. Firms will offer access to different exchanges and assets, trading platforms, fee structures, deposit and withdrawal methods, educational and research resources and trading conditions. Investors will then need to find the broker that suits their preferences and goals to find the best brokerage for them. Alternatively, choose from our list of top-rated spot trading brokers.