How Does Revolut Trading Work: A Comprehensive Guide to Investing with Revolut

Revolut Trading has taken the investing world by storm, offering its users a simplified, accessible platform to trade stocks, cryptocurrencies, commodities, and more. But how exactly does it work, and why has it become so popular among investors of all skill levels? If you're considering jumping into the world of online trading with Revolut, this article will provide a detailed, in-depth look at how the platform operates, the pros and cons of using it, and what you need to know to start trading like a pro.

What Is Revolut Trading?

Revolut, a UK-based financial technology company, initially gained traction as a digital banking alternative offering global spending and money transfers. However, in 2019, it expanded into the trading world, allowing users to buy and sell assets like stocks and cryptocurrencies directly from the app.

Revolut Trading offers users commission-free trading on a variety of US and European stocks, with a focus on ease of use. It’s available directly within the Revolut app, meaning users don’t need to download additional software or sign up for external brokerage accounts. It was designed to be beginner-friendly, providing access to major global exchanges and offering a range of trading features.

How to Get Started with Revolut Trading

Setting up your Revolut trading account is simple and can be done directly from the Revolut app. Here’s how:

1. Sign up for a Revolut account: If you don’t already have a Revolut account, you’ll need to create one. The process involves downloading the app, entering your personal information, and verifying your identity.

2. Upgrade your plan: While free users can access limited trades, Revolut offers various plans—such as Premium and Metal—which come with increased trading limits and additional features. You may want to consider upgrading depending on your trading activity.

3. Activate trading: Once your account is set up, navigate to the ‘Wealth’ section within the app to activate your trading account. You’ll need to agree to some terms and conditions and fill out a quick risk assessment questionnaire.

4. Deposit funds: After activating your trading account, you’ll need to deposit money. Revolut allows users to fund their accounts in multiple currencies, which makes it easier for international users.

5. Start trading: You can now buy and sell assets directly within the app. Revolut offers commission-free stock trading up to a certain number of trades per month, depending on your plan.

Key Features of Revolut Trading

Commission-Free Trading: One of the main attractions of Revolut Trading is the ability to trade stocks without paying commissions. Free users are limited to a few commission-free trades per month, while premium users get more. After reaching your limit, you’ll need to pay a small fee per trade.

Wide Range of Assets: Revolut offers access to a variety of assets, including:

• US Stocks: Buy and sell major companies listed on the NASDAQ and NYSE.
• Cryptocurrencies: Trade popular cryptocurrencies like Bitcoin, Ethereum, and more.
• Commodities: Users can also gain exposure to commodities like gold and silver.

Fractional Shares: Revolut allows users to buy fractional shares, meaning you can own a piece of a stock even if you don’t have enough money to buy a full share. This is great for beginner investors who may not have a lot of capital but still want to invest in major companies.

Instant Notifications: Keep track of market movements with real-time price alerts and notifications, ensuring you stay updated on the performance of your investments.

Educational Tools: Revolut provides resources and tips for new investors, helping them understand how the stock market works and the basics of trading. These educational features make it easier for beginners to get started and gain confidence in trading.

Costs and Fees

While Revolut offers commission-free trading, there are still some costs to be aware of:

• Monthly Trade Limits: Depending on your plan, you can make a certain number of commission-free trades each month. Once you exceed this limit, Revolut charges a small fee (typically around $1 per trade).

• Currency Conversion Fees: Revolut charges a currency conversion fee (around 0.5% to 2%) when trading stocks listed in a currency different from your account balance. This can add up if you’re frequently trading on US exchanges from Europe or vice versa.

• Crypto Fees: For cryptocurrency trades, Revolut charges a markup, which can range from 1.5% to 2.5% depending on your account type.

• Premium Plans: To unlock additional features and increase your trade limit, you may want to consider upgrading to a paid plan like Premium or Metal. These plans start at around $10 per month.

Is Revolut Trading Right for You?

Revolut Trading is an excellent option for beginner investors looking for a simple, user-friendly platform to start trading. The app’s intuitive design, fractional share options, and educational tools make it easy to learn the ropes of investing without being overwhelmed by complex features.

However, if you’re an experienced trader or someone who trades frequently, Revolut may not be the best choice. The limited number of commission-free trades, lack of advanced trading features, and fees for higher-volume traders may make other platforms, like eToro or Robinhood, more suitable.

Pros and Cons of Revolut Trading

Pros:

• Easy to Use: The Revolut app’s interface is designed to be straightforward, making it perfect for beginners.
• Commission-Free Trades: Enjoy commission-free trading up to a certain number of trades per month.
• Access to Major Markets: Trade US stocks, cryptocurrencies, and commodities.
• Fractional Shares: Own a portion of a stock, even if you don’t have enough to buy a full share.
• Global Accessibility: Revolut supports multiple currencies and is accessible in numerous countries worldwide.

Cons:

• Limited Free Trades: Free users only get a few commission-free trades per month, which may not be enough for active traders.
• Currency Conversion Fees: If you’re trading across different currencies, the conversion fees can add up.
• Limited Research Tools: Unlike traditional brokerage platforms, Revolut doesn’t offer in-depth market research or analysis tools.

How to Make the Most of Revolut Trading

If you’ve decided to start trading with Revolut, here are a few tips to help you maximize your profits and minimize risks:

1. Use Fractional Shares to Diversify: Don’t put all your eggs in one basket. With fractional shares, you can invest in a variety of companies without needing a large amount of capital. This diversification can help reduce risk.

2. Set Up Price Alerts: Revolut’s price alert feature can help you stay on top of market movements, ensuring you don’t miss out on buying or selling opportunities.

3. Consider Premium Plans: If you find yourself running out of commission-free trades each month, upgrading to a Premium or Metal plan can save you money in the long run, as these plans come with higher trade limits.

4. Stay Informed: Use Revolut’s educational tools to continue learning about the market. While Revolut’s research tools are limited, staying informed by reading financial news, following expert traders, or using external research tools will help you make more informed decisions.

Is Revolut Safe for Trading?

Revolut is regulated by the Financial Conduct Authority (FCA) in the UK, which provides a level of protection to users. Additionally, Revolut uses advanced security measures such as two-factor authentication, encryption, and fraud detection to keep your account secure.

However, it’s essential to remember that all investments carry risks. Stocks and cryptocurrencies are volatile, and you could lose your invested capital. Make sure to do your research and only invest what you can afford to lose.

Future of Revolut Trading

Revolut is continuously evolving, and its trading platform is no exception. The company has plans to expand its trading services by adding more global exchanges, offering more educational resources, and introducing new asset classes. Additionally, Revolut is rumored to be working on integrating more advanced trading tools for experienced investors, which could make it a more competitive option in the future.

Conclusion

Revolut Trading is an excellent platform for beginner investors looking to dip their toes into the stock market and cryptocurrencies without the hassle of setting up a traditional brokerage account. The platform’s intuitive design, commission-free trading options, and access to major global markets make it a popular choice for people new to investing.

However, Revolut Trading does have its limitations, particularly for more experienced traders who require advanced tools or make frequent trades. The platform’s fees and limited research tools may not suit everyone, but for those just starting, it’s an excellent option.

Before diving in, make sure you understand the risks involved and use the available educational tools to boost your knowledge. If you want to build your portfolio in a low-cost, accessible way, Revolut Trading could be the perfect solution for you.