79

The first thing that pops up when you open your link is a disclaimer: 66% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. 66% isn't a very reassuring number for blindly following anonymous strangers ...


63

Well, consider it from the other side. Why would a trader be willing to share trades? Consider the following scenario. The reference trader makes a trade in a low volume market. The trade is published so that everyone can see it. Multiple people copy the trade as best they can, but ... The price moves due to the uncommon level of demand. The ...


30

There are probably many correct answers to this question, but for most people, the main reason is qualified dividends. To be a qualified dividend (and therefore eligible for lower tax rates), the dividend-paying stock or fund must be held for "more than 60 days during the 121-day period that begins 60 days before the ex-dividend date". Since many stocks and ...


30

If you're just planning to buy-and-hold, it is worth considering whether the value of the time you spend on searching for a cheap brokerage will not dwarf the savings. Around here (Denmark) banks don't generally seem to charge fees merely for holding stock for you. They charge a commission for each trade, some fractional percentage of the value which could ...


25

Banks have a financial, and regulational duty called "Know your customer", established to avoid a number of historical problems occurring again, such as money laundering, terrorism financing, fraud, etc. Thanks to the scale, and scope of the problem (millions of customers, billions of transactions a day), the way they're handling this usually involves fuzzy ...


17

When you buy a share of stock, you are almost always buying from someone who previously purchased that share and now wants to sell it. The money -- minus broker's fee -- goes to that other investor, which may be a person, a company (rarely the company that issued the stock, but that will occasionally be the case), an investment fund, the "market maker" for ...


12

Yes, there is a lot they are leaving out, and I would be extremely skeptical of them because of the "reasons" they give for being able to charge $0 commissions. Their reasons are that they don't have physical locations and high overhead costs, the reality is that they are burning venture capital on exchange fees until they actually start charging everyone ...


12

Contracts For Difference (CFD) are not investing. They are a form of gambling tarted up with the appearance of investing by the platforms that market them. It is not a good idea to trade in CFDs. I haven't run any numbers, but you'd probably be better off just gambling at a casino. The house edge is probably lower (if you choose your game wisely). Since it ...


10

It isn't the first initiative (see link below) and maybe this one will stick around. Time will be a good test. Here is an article on it.... http://www.investopedia.com/articles/active-trading/020515/how-robinhood-makes-money.asp They plan to make money off unused balances - so they hope to get the masses signed up using the 0$ fees. Also, no type of ...


9

There is a subtle difference. In an FDIC insured bank account, you are guaranteed to get all of your money back out. If you put $1000 into your bank account, you are guaranteed to be able to get at least $1000 back out when you want. The value of the account (in dollars) can never go down, for any reason. When you put money into a brokerage account, cash ...


9

You should contribute as much as you can to get the full company match. That is a 100% return on your investment and you're not going to beat that - it is literally free money. Once you've done that then you can look to other investments. You can certainly have money pulled from your paycheck into a brokerage account. Fidelity, TDA, Schwab, etc all ...


9

Banks that offer brokerage services tend to charge high commissions and some charge additional account maintenance fees. Therefore, it's possible that your bank may not be the best choice. Best broker depends on what your needs are. If all you want is the ability to buy and sell stocks occasionally, I'd suggest that you look for a reputable broker in a ...


9

(All slightly guessing: this is how things are in one or two European countries I know, and chances are your European country works similarly - but things do differ between countries - so please double check how it is actually for you) I'd suggest to start with a broker that operates in your country. Once you know how things work locally, you can explore ...


8

Make sure you understand the difference between SIPC (Broker-dealer failure) and FDIC coverage, and which funds are protected by which insurance. Evaluate the account knowing that it is online only, and make sure that the fees and limits work for you. It takes an awareness of the difference between your investment funds and your normal day-to-day operating ...


8

All discount brokers offer a commission structure that is based on the average kind of order that their target audience will make. Different brokers advertise to different target audiences. They could all have a lot lower commissions than they do. The maximum commission price for the order ticket is set at $99 by the industry securities regulators. When ...


8

For a trustee-to-trustee asset transfer from a mutual fund inside a Roth IRA to a brokerage account inside a Roth IRA, no. If you take a distribution mutual fund Roth IRA with the intention of paying the money into your Roth IRA brokerage account, then taxes may be withheld from the distribution. In this case, you will need to come up with the difference (...


8

Larry Kotlikoff, who wrote the two 2014 articles that you referenced, uses very strong rhetoric in describing the SIPC: "terrible risk," "financial fraud," and "bigger scam than Madoff." He advises you to "close your brokerage account," and "avoid spending any withdrawals" for six years, presumably the amount of time that the SIPC could confiscate those ...


8

What you want is a simple discount brokerage. Brand names here in the US include ETrade, Vanguard, Fidelity, Charles Schwab, and others. Some of them do business in Europe (though Fidelity US split from Fidelity Europe), and there will likely be comparable companies in Europe which do this. Features are generally Buy any major stock, mutual fund, ETF, ...


8

No, it is not. Fundamentally because TRADING IS NOT INVESTING. So, you basically do not invest at all, you turn into a trader. As such, it can never be a good investment. Disclaimer: I trade,


7

Brokerages are supposed to keep your money separate from theirs. So, even if they fail as a company, your money and investments are still there, and can be transferred to another brokerage. It doesn't matter if it's an IRA or taxable account. Of course, as is the case with MF Global, if illegally take their client's money (i.e., steal), it may be a ...


7

Brokers are supposed to (by law) only advise you or suggest to you to make trades that are in your best interest. Many people who don't have time and/or confidence in their own ability to learn about investing and make their own choices, often rely on the broker for advice on what to buy and sell, and when. If a trade was to go wrong, and it could be ...


7

A protection similar to FDIC for banks is provided to brokerage accounts' owners by SIPC. Neither FDIC nor SIPC provide protection or insurance against identity thefts or frauds, only bank/brokerage failures. Your investment losses are obviously not insured either. For fraud liability check your bank/brokerage policies, you can get insurance for identity ...


7

If your broker charges a transaction fee, it is likely that the fee is charged per transaction and so since the additional purchase is a different transaction, you will be charged the fee again. If you decide to purchase the additional shares on the same day as the first purchase, and the mutual fund is not an exchange-traded fund (ETF), then as far as the ...


7

According to Publication 590, broker's commissions for stock transactions within an IRA cannot be paid in addition to the IRA contribution(s), but they are deductible as part of the contribution, or add to the basis if you are making a nondeductible contribution to a Traditional IRA. (Top of Page 10, and Page 12, column 1, in the 2012 edition of Pub 590). On ...


7

The simple answer is that brokerages have to close the books at the end of the year before they can send out the tax forms (what this entails is off topic for this site). I doubt that printing and mailing the forms takes very long. It is simply the process of reconciling the books so they don't have to send out corrected forms if errors are corrected during ...


7

The idea that you should pay $5,000 up front to convert your shares and sell them to ultimately receive some larger amount is crazy. If in fact the shares need to be converted (unlikely), they should be able to deduct the fees from the proceeds of your transaction, and you would not be out-of-pocket anything at all. You didn't provide much in numbers, so I ...


6

Almost all major no-load mutual fund families allow you to do the kind of thing you are talking about, however you may need an initial investment of between $1000 to $3000 depending on the fund. Once you have it however, annual fee's are usually very little, and the fees to buy that companies funds are usually zero if it's a no-load company (Vanguard, ...


6

Probably the most significant difference is the Damocles Sword hanging over your head, the Margin Call. In a nutshell, the lender (your broker) is going to require you to have a certain amount of assets in your account relative to your outstanding loan balance. The minimum ratio of liquid funds in the account to the loan is regulated in the US at 50% for ...


6

Your option #2 is the correct one. For mutual funds, stocks, trusts etc - the broker will buy the shares in your name and will hold them in a trust account. For traded partnerships - the broker will have you added as a partner. Its all virtual because no actual share certificates are issued, its just records in computers. For shares - you're getting 1099 ...


6

As per the SIPC website: Most customers can expect to receive their property in one to three months. When the records of the brokerage firm are accurate, deliveries of some securities and cash to customers may begin shortly after the trustee receives the completed claim forms from customers, or even earlier if the trustee can transfer customer ...


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