What is share dealing and how does it differ from CFD or spread betting?

Share dealing involves buying and owning actual shares in companies. You become a part-owner, receive dividends if the company pays them and benefit directly from share price increases. CFDs and spread betting involve speculating on price movements without owning the underlying asset. These products typically use leverage, meaning both gains and losses are magnified. Share dealing suits long-term investors seeking ownership; CFDs and spread betting are often used for short-term speculation and carry higher risk.

What is a share dealing account and do I need one?

A share dealing account is the account through which you buy, hold and sell shares. Yes, you need one to invest in individual company shares. You can open one through a bank, a dedicated brokerage account provider or an online investment platform. The account holds your shares electronically and records your transactions. Most providers offer different account types, including General Investment Accounts, ISAs and SIPPs.

What fees and charges are involved in share dealing?

Common charges include dealing fees (charged per trade), platform fees (ongoing charges for holding investments) and foreign exchange fees (when buying overseas shares). You also pay Stamp Duty Reserve Tax at 0.5% when purchasing UK shares. Fee structures vary significantly between platforms. Some charge no dealing fees but higher platform costs; others do the opposite. Calculate your expected annual costs based on your trading frequency and portfolio size.

Is share dealing suitable for beginners?

Share dealing can be appropriate for beginners willing to learn, invest for the long term and accept that their capital is at risk. Start by understanding the basics, practising with amounts you can afford to lose and diversifying across multiple companies. Beginners should be cautious about more complex products like CFDs or options. If unsure whether investing suits your circumstances, seek independent financial advice.

What are the main risks of share dealing?

The primary risk is losing money. Share prices can fall, and you may get back less than you invest. Individual companies can fail entirely. Market volatility can be significant during economic uncertainty. Concentration in single stocks or sectors amplifies risk. Emotional decision-making during market swings often leads to buying high and selling low. Understanding these risks and investing only money you can afford to lose helps manage, though not eliminate, these dangers.

Spread bets and CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when spread betting and/or trading CFDs with this provider. You should consider whether you understand how spread bets, CFDs, OTC options or any of our other products work and whether you can afford to take the high risk of losing your money.

What is share dealing? A beginner’s guide for UK investors

Understanding what share dealing is marks the first step towards building an investment portfolio. At its core, share dealing involves buying and selling shares in publicly listed companies. When you purchase shares, you become a part-owner of that company, entitled to a slice of its profits and, in many cases, voting rights at shareholder meetings.

:: 16 Jul 2026, 07:13

This guide covers everything UK beginners need to know about share dealing, from opening an account to understanding costs and managing risks. Whether you want to build long-term wealth or simply understand how the stock market works, the information here will give you a solid foundation.

Important: The value of investments can fall as well as rise, and you may get back less than you invest. Share dealing carries risk, and past performance does not guarantee future results.

Share dealing is the process of buying and selling shares through a stock exchange. In the UK, most shares trade on the London Stock Exchange, though many share dealing platforms also provide access to international markets.

When you buy shares, you own a small piece of the company. This ownership comes with potential benefits: if the company grows and becomes more valuable, your shares may increase in price. Many companies also pay dividends, which are regular payments to shareholders from company profits.

Share dealing typically suits investors with a medium-to-long-term horizon. Unlike day trading, which involves rapid buying and selling, most share dealers hold their investments for months or years, aiming to benefit from company growth and dividend income over time.

Share dealing is one of several ways to participate in financial markets. Understanding the differences helps you choose the right approach.

Share dealing	CFDs	Spread betting
You own the underlying shares	You do not own the asset; you speculate on price movements	You do not own the asset; you bet on price direction
No leverage (unless using margin)	Leveraged product; losses can exceed deposits	Leveraged product; losses can exceed deposits
Dividends received if company pays them	Dividend adjustments may apply	No dividend ownership
Profits subject to capital gains tax	Profits subject to capital gains tax	Often treated as tax-free for most UK retail clients, but tax treatment depends on individual circumstances and may change (HMRC rules apply).
Suitable for long-term investing	Often used for short-term speculation	Often used for short-term speculation

Contracts for difference (CFDs) and spread betting carry substantially higher risk than traditional share dealing and are generally unsuitable for beginners seeking long-term investment growth.

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Approximately 80% of retail investor accounts lose money when trading CFDs, according to Financial Conduct Authority (FCA) data. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Funds and ETFs offer another alternative. Rather than buying individual company shares, you invest in a basket of assets managed by professionals. This provides diversification but involves management fees and means you do not directly own the underlying shares.

A share dealing account is an account that allows you to buy, hold and sell shares. It acts as the gateway between you and the stock market. Your chosen platform or broker executes trades on your behalf and holds your shares in custody.

Think of it like a bank account, but for investments. Instead of holding cash for everyday spending, it holds your share certificates electronically and records all your transactions.

To open an account, you typically need to be 18 or older, be a UK resident and provide proof of identity and address. Most online share dealing platforms allow you to open an account within minutes, though verification may take a day or two.

UK investors can choose from several account types, each with different tax implications:

Account type	Tax treatment	Annual limit	Best for
General Investment Account (GIA)	Capital gains and dividends taxable above allowances	No limit	Flexibility; amounts exceeding ISA limits
Stocks and Shares ISA	Tax-free gains and dividends	£20,000 per tax year	Tax-efficient long-term investing
Self-Invested Personal Pension (SIPP)	Tax relief on contributions; tax-free growth	Annual allowance applies	Retirement savings

A General Investment Account offers maximum flexibility but no tax advantages. A Stocks and Shares ISA shelters your investments from capital gains tax (CGT) and dividend tax, making it attractive for most investors. A SIPP locks your money away until retirement but provides upfront tax relief.

Many investors use a combination. For example, maximising your ISA allowance first, then using a GIA for additional investments.

The mechanics of share dealing have become straightforward thanks to online share dealing platforms. What once required phone calls to brokers now happens with a few clicks.

When you place an order, your broker sends it to the relevant stock exchange. There, it matches with a seller (if you are buying) or a buyer (if you are selling). The transaction settles, typically within two business days in the UK, and your account updates to reflect your new holdings.

Step-by-step: Buying and selling shares

Step 1: Research

Decide which company you want to invest in. Consider the business model, financial health, industry trends and valuation. Never invest in something you do not understand.

Step 2: Open and fund your account

Choose a share dealing platform and complete the registration process. Transfer funds via bank transfer or debit card.

Step 3: Place your order

Search for your chosen company by name or ticker symbol. Decide how many shares you want and choose your order type:

Market order: Buy or sell immediately at the current price
Limit order: Set a maximum buying price or minimum selling price; the order executes only if the market reaches that level

Step 4: Review and confirm

Check the total cost, including any dealing fees. Confirm the order.

Step 5: Settlement

The trade settles, typically in two business days. Shares appear in your account; cash leaves your balance.

Step 6: Monitor and manage

Track your investment’s performance. Decide whether to hold, buy more or sell based on your investment goals and changing circumstances.

Selling follows a similar process. You select your holding, choose how many shares to sell and confirm the order.

Costs and fees to consider

Understanding costs is essential. Fees eat into your returns and small differences compound significantly over time.

Fee type	Description	Typical range
Dealing fee	Charged per trade (buy or sell)	£0–12 per trade
Platform fee	Annual or monthly charge for holding investments	0–0.45% of holdings, or flat monthly fee
Foreign exchange fee	Applied when buying shares in overseas markets	0.5–1.5% of transaction value
Stamp Duty Reserve Tax	Government tax on UK share purchases	0.5% of purchase value

Some platforms charge no dealing fees but apply higher platform fees. Others charge per trade but have lower ongoing costs. A suitable share dealing account for many investors depends on how often they trade and how much they invest.

For infrequent traders with larger portfolios, percentage-based platform fees become expensive. For frequent traders with smaller amounts, per-trade fees add up quickly. Calculate your likely annual costs before committing to a platform.

Watch for hidden charges too. Inactivity fees, withdrawal fees and paper statement charges can catch you off guard.

Share dealing offers genuine opportunities but comes with real risks. Approaching it with eyes open helps you make informed decisions.

Potential benefits:

Ownership: You own part of real businesses, with voting rights and dividend entitlements.
Growth potential: Shares have historically outperformed cash and bonds over long periods, though past performance does not guarantee future results.
Liquidity: You can typically sell shares quickly during market hours.
Transparency: Share prices are publicly available, and listed companies must disclose financial information.
Control: You choose which companies to invest in and when to buy or sell.

Key risks:

Capital loss: Share prices can fall, sometimes dramatically. You may receive back less than you invested.
Company failure: Individual companies can go bankrupt, potentially wiping out your investment.
Volatility: Prices fluctuate daily, which can be unsettling and may tempt poor decisions.
Concentration risk: Investing heavily in one company or sector magnifies potential losses.
Timing risk: Buying at market peaks or selling during downturns can lock in losses.

Diversification helps manage risk. Spreading investments across different companies, sectors and geographies reduces the impact of any single failure. However, diversification does not eliminate risk entirely.

Share dealing is not suitable for everyone. If you cannot afford to lose the money you invest, or if short-term losses would cause significant financial hardship, consider whether this is the right approach for you.

Selecting from the many share dealing platforms available requires matching your needs to platform features.

Consider these factors:

Regulation: Ensure the platform is authorised and regulated by the FCA. This provides important protections, including access to the Financial Services Compensation Scheme (FSCS), which protects eligible investments up to £85,000 if the firm fails. FSCS protection doesn’t cover losses due to market movements and applies to eligible claims where the firm is unable to meet its obligations.
Range of investments: Check whether the platform offers access to the markets and shares you want. Some focus on UK shares; others provide extensive international access.
Costs: Compare dealing fees, platform fees and any other charges based on your expected trading frequency and portfolio size.
Usability: Test the platform interface if possible. A confusing interface can lead to mistakes. Mobile apps matter if you want to manage investments on the move.
Research and tools: Some platforms offer extensive company analysis, news feeds and portfolio tracking. Others provide bare-bones execution only.
Customer support: Check availability and contact methods. Problems happen, and responsive support matters when your money is involved.

Avoid choosing based solely on marketing. Flashy advertising does not indicate quality service. Read reviews, but treat extremely positive or negative opinions with appropriate scepticism.

Tax considerations for UK investors

Understanding tax obligations helps you keep more of your returns and avoid surprises.

CGT applies when you sell shares for a profit outside an ISA or SIPP. You have an annual tax-free allowance. Gains above this threshold are taxed at 18% for basic-rate taxpayers or 24% for higher-rate taxpayers.

Dividend tax applies to dividend income above your annual dividend allowance. Rates depend on your income tax band.

Stamp Duty Reserve Tax at 0.5% applies automatically when you buy UK shares. Your broker deducts this at the point of purchase.

Using a Stocks and Shares ISA shelters investments from both CGT and dividend tax. This makes ISAs particularly valuable for long-term investors.

Keep records of all transactions. You need purchase prices, sale prices and dates to calculate gains accurately. Most platforms provide transaction histories, but maintaining your own records provides a backup.

Tax rules change. What applies today may differ tomorrow. For complex situations or significant portfolios, consider consulting a qualified tax adviser or check current HMRC rates.

This article provides general information only and does not constitute personal financial, tax or investment advice. If you are unsure whether share dealing is right for your circumstances, seek independent financial advice.

Disclaimer: CMC Markets is an execution-only service provider. The material (whether or not it states any opinions) is for general information purposes only, and does not take into account your personal circumstances or objectives. Nothing in this material is (or should be considered to be) financial, investment or other advice on which reliance should be placed. No opinion given in the material constitutes a recommendation by CMC Markets or the author that any particular investment, security, transaction or investment strategy is suitable for any specific person. The material has not been prepared in accordance with legal requirements designed to promote the independence of investment research. Although we are not specifically prevented from dealing before providing this material, we do not seek to take advantage of the material prior to its dissemination.