What is a brokerage account and how do you open one?
Embarking on a trading journey will likely require that you open a brokerage account. Find out what a brokerage account is and how to open one with us.
Start trading today. Call +44 (20) 7633 5430, or email sales.en@ig.com to talk about opening a trading account. We’re here 24/5.
Contact us: +44 (20) 7633 5430
Start trading today. Call +44 (20) 7633 5430, or email sales.en@ig.com to talk about opening a trading account. We’re here 24/5.
Contact us: +44 (20) 7633 5430
What is a brokerage account?
A brokerage account is used to trade or invest in securities in the financial markets. Having an account with an online brokerage has become popular. A share dealing account would enable you to buy and own shares outright. On the other hand, a leveraged trading account, like a CFD trading account, will give you exposure to various markets that you can trade without taking ownership of the underlying assets.
Share dealing account*
A share dealing account would enable you to buy and sell stocks, exchange traded funds (ETFs) and investment trusts. You could also use it to re-invest any dividends you earned from company stocks that made for such a provision.
*With us you can only trade derivatives via CFDs.
Leveraged trading account
When you trade on financial markets using leveraged trading accounts, you’ll be required to put down a deposit – called ‘margin’. When trading with leveraged products such as CFDs, your margin deposit is much less than your full position size.
When trading on the price movements of the underlying assets, you’ll get exposure to thousands of markets. Some of the markets you can trade include:
How to pick a brokerage account
The type of account you open will depend on whether you want to trade or invest.
An investment account would be more suited to someone who wanted to buy and own shares for exposure in the long term.
A trading account, such as a CFD trading account, will be suited to someone who wants to speculate on the short-term rise and fall of the market price movements.
So, if you wanted to buy and hold the assets and earn an income from dividends, then you would choose to invest. If, however, you prefer to have exposure to assets over the short term, then you’ll go with trading.
When choosing the best brokerage account for you, consider:
- Objectives and available period of activity
- Commitment time and energy
- Markets
- Experience
- Risk appetite and available capital
Remember, with us you'll trade derivatives via CFDs.
Types of brokerage accounts
With us, you’ll get to trade in various financial markets. Below is a summary of our CFD account offering which gives you exposure to leveraged trading:
Leveraged trading
CFD trading account |
Speculate on a wide variety of rising and falling markets such as forex, indices, shares, commodities, bonds and other asset classes. In some territories, profits can be balanced against losses as tax deductions1 |
CFD trading accounts
Use your CFD trading account to go long or short on the price market movements and get exposure to the underlying assets.
Gains you make when trading CFDs can be used to offset losses you may incur. You also don’t pay stamp duty when trading CFDs because you won’t take ownership of the underlying assets.1
CFDs are leveraged products, meaning you can open a position with an initial deposit – called margin – which is a fraction of the full value of your position. The profits and losses you make will still be based on the full size of your position, which can outweigh your margin. Trading with leverage has associated risks as compared to non-leveraged products like share dealing. Remember to manage your risk carefully.
With your CFD trading account, you can trade the spot price, futures and options of shares, ETFs, commodities, forex and indices markets.
If you’d like to trade intra-day, then you’ll find CFD trading accounts are better suited for you. CFD accounts are also suitable for trading in the short and medium term.
1. Decide whether you want to trade or invest
Choose whether you’d like to trade or invest. If you’d like to trade, you‘ll have to open a CFD trading account. However, if you decided that you want to invest, then you would open an investment account. Trading is leveraged and investing is traditional, where you would buy and own the asset outright.
Remember, with us you can only trade derivatives via CFDs.
2. Understand the charges and risks
It’s important to understand the costs that come with trading with your online broker. With us, creating an account comes at no charge, but once you open or trade a position, there will be costs involved. Direct charges you’ll likely incur are the spread, which occurs when you trade. Remember that direct charges are payable on commissions when trading share CFDs.
As CFDs are leveraged products, you pay an initial margin that gives you increased exposure at a fraction of the full market value of the underlying asset. With leverage, your profits will be magnified when the market moves in your favour. But, if the market moves against you, you’ll make losses that might exceed your initial outlay. Make use of some of our risk management tools. Also ensure that you only invest an amount you’re comfortable losing.
3. Fill in an application form
Fill in an application form. We’ll then ask you a few questions to determine your trading knowledge before proceeding with the next phase of the application.
4. Get verified
Once you’ve filled in your application form, it’ll need to be verified. This process usually takes a few days, at most.
5. Fund your account
When your application has been approved, you can credit your account with funds and start trading. You can fund your account using a debit card or bank transfer. With us, you can also add or withdraw funds from your account – for free.
FAQs
What is an online broker?
An online broker is an independent company with a digital platform that helps organise and execute transactions on your behalf when you want to trade or invest in the financial markets. Online brokers, like traditional ones, usually charge a commission for brokering or executing the transaction on your behalf.
What is a brokerage account?
A brokerage account is a trading or investment tool you’ll use when you want to buy and sell securities in the financial markets.
Do I need a brokerage account to buy shares?
Yes, you would need to open a share dealing account when choosing to invest in company stocks.
However, with us you can only trade on share price movements without taking ownership of the share via a CFD trading account.
Whereas an investment account would allow you to buy and hold shares over the long term, CFDs enable you to trade on share prices in the short term.
What is a margin brokerage account?
A margin – or leveraged – brokerage account gives you access margin trading, which enables you to put down a deposit to open a position with a much larger market exposure. With this type of account, your broker can credit your trade for the full value of the underlying asset.
You trade on margin using CFDs.
What can I trade with a brokerage account?
Our brokerage accounts enable you to trade a host of assets on 17,000 financial markets.
*IG Group's total markets.
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1 Tax laws are subject to change and depend on individual circumstances. Tax law may differ in a jurisdiction other than the UK.
2 Best Finance App, Best Multi-Platform Provider and Best Platform for the Active Trader as awarded at the ADVFN International Financial Awards 2024.
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^IG International Limited is part of the IG Group and its ultimate parent company is IG Group Holdings Plc. IG Group established in London in 1974, and is a constituent of the FTSE 250 index.
