Zero-commission trading can still cost far more, UK

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Zero commission pricing does not automatically mean cheaper trading, according to a new TradingPlatforms.co.uk analysis comparing stock CFD costs on some of the UK’s most actively traded shares. Looking across three FCA-licensed brokers: CMC Markets, Plus500 and Eightcap,  the report found that the effective cost of trading the same stock could vary sharply depending on whether the broker used a spread-only model or combined lower spreads with a separate commission.

The clearest example in the study was RELX. On a hypothetical £10,000 CFD trade, TradingPlatforms.co.uk calculated a total cost of £3.75 at CMC Markets, £49.64 at Plus500 and £20.38 at Eightcap. CMC’s cost was based on a 1.00-point spread and no commission, while Plus500’s much wider 13.34-point spread produced the highest effective cost despite the absence of commission. Eightcap posted the tightest spread in the comparison at 0.1, but its 0.1% per-side commission lifted the total round-trip cost into the middle of the pack.

The report said this shows why traders need to look beyond marketing labels. CMC Markets and Plus500 both use spread-only pricing on UK share CFDs, embedding the dealing cost in the bid-ask spread. Eightcap, by contrast, combines the spread with a 0.1% commission on entry and another 0.1% on exit. TradingPlatforms.co.uk warned that a narrower spread does not always translate into the lowest total bill once commissions are added, but the inverse is also true: a broker advertising zero commission can still be the most expensive if its spread is wide enough.

For consumer, business and personal finance desks, the numbers provide a clean retail-investor story at a time when trading costs remain a major point of comparison between platforms. The report’s conclusion was blunt: Plus500 looked more expensive in the RELX example even without commission, while CMC Markets delivered the lowest effective trading cost and Eightcap landed in the middle. In a market where pricing pages often foreground headline commissions, the analysis suggests the more important question may be what a full trade really costs once spreads are measured in cash terms.

*This article was paid for. Cryptonomist did not write the article or test the platform.