88

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 ...


35

However, if I give a broker cash money and ask for a share of a stock in return, why would this need anyone to have collateral? The seller's broker needs to get paid by the buyer's broker. Because this is a legal obligation of the buyer's broker, the buyer's broker must use their own funds to settle this obligation. A broker cannot commingle their own funds ...


33

This has all the red flags of a scam. (1) You shouldn't have to pay money to withdraw money from your account. (2) it is extremely uncommon and suspicious to ask for fees in bitcoin, a completely irreversible transaction that hides their identity. I'm pretty sure your money is long gone. Chalk it up as a life lesson and move on. Update: I looked at their ...


32

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 ...


31

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 ...


29

First of all, congratulations on what you've accomplished. About the only remaining conventional tax-advantaged option is a Health Savings Account (HSA), and that's only available if you have a high-deductible health plan. Deposits into an HSA are pre-tax, and can be used for just about any medical expense. After that, I would consider a standard non-...


27

I don't think that there's a way to maximize this. Even more importantly, you shouldn't be attempting to do so. Whether you're investing or you're actively trading, you should place your trades based the merit of the trade rather than the cost of doing the trade.


25

A stock can only lose ~100% of its value on the downside, so while the risk is high it is effectively capped and definable selling naked puts as you can't go lower than zero on equities. Selling naked calls opens you to potential infinite risk as stocks can easily rise 100s (if not 1000s in some case) of percent higher from where they currently are. Compare ...


24

As with all crimes there is a huge difference between violating the law and being caught. Probably the most problematic and easiest SEC rule for a small investor to break is insider trading. In most firms employees are informed of changes to the firm's financial situation or new clients that are close to signing in town halls before they are released to the ...


21

Stock brokerages are required by law, in the USA at least, to collect employer information as well as income and other personal information. You will find that all of them do this because the penalties for them are significant for non-compliance. This is to comply with various laws that demand that they report potential conflicts of interest and tax ...


21

Anti Money Laundering (AML) In our current political climate, there is a huge amount of pressure to enact strong AML controls to prevent tax evasion, funding of terrorists and circumventing of economic sanctions. The first line of defense most financial institutes have against aiding such activities is called Know Your Client. Know Your Client (KYC) Basic ...


19

For about 100 years or so, stock quotes (symbol, price, volume) were transmitted by telegraph. Many traders of that era were tape readers, often sitting in the office of their broker before phones were in wide usage. This was replaced by electronic communication networks (ECNs) circa 1980. Until about 10 years or so ago, 'open outcry' was the method for ...


18

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 ...


16

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 ...


16

First off, congratulations on getting mostly debt free and having so much extra! That said, even though $700 extra sounds like a lot, it isn't. You already have a 1 year emergency fund, so that's good, which wipes out my first suggestion. You also wiped out my next suggestion, which is looking at improvements to your house, such as appliances or other ...


16

I don’t know anything about them, but any organization which claims to require payment of funds before allowing withdraw of funds is quite obviously a scam. Assuming that a 20% withdraw fee was required, a legitimate company would simply issue you a check (or Bitcoin) in the amount of your current balance - 20%. There are two reasons to require payment for ...


14

Again great job. To me you have really two choices and no matter what you choose you will end up with the second choice eventually. First choice: Throw more at the mortgage. You may want to do this some of the 700 or all. Doing this, you will eventually pay off the house and will be left only with the second choice. Second choice: Open up a brokerage ...


14

"Especially since all the employment contracts I've seen have had clauses that say the salary and all remuneration is confidential." Let's assume that you have signed an agreement to not tell anybody what your income is. Taken to the extreme that would mean that you can't apply for a car loan, or a mortgage, or a credit card. All these things ...


13

This was explained on a very recent NPR Planet Money podcast: https://www.npr.org/transcripts/963466346 Here's a brief summary: There is a two day window between when a stock transaction executed and it is actually settled. So if we were to agree this instant that I will sell you x shares of y stock for z price the transaction would be executed. However the ...


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 ...


12

Your confusion appears to be due to a poor summary in the CNBC article. Where they had: The shares will be distributed to shareholders at the close of business on August 24, and trading will begin on a split-adjusted basis on August 31. The actual Apple announcement linked in that article contains: The Board of Directors has also approved a four-for-one ...


11

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 ...


11

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 ...


11

If you have only EU/UK tax residency, you can buy any ETF with "UCITS" in the name - those conform to the new consumer information regulations. I gather that the expense ratios often aren't quite as favorable as the US domiciled ones, but I would do it anyway. Here are some that track the S&P 500: https://www.justetf.com/gb-en/find-etf.html?assetClass=...


11

Your quoted paragraph says it all. The restrictions are intended to mitigate risk for the brokerage firm and for the clients. There's a long history of risk mitigation by the SEC as well as brokers. Some examples: Before the 1929 crash, margin was 10%. You could buy stocks for 10 cents on the dollar. Reg T was subsequently established, requiring that ...


11

The reason they stopped is because Citadel and Melvin capital and others are going to lose to a bunch of Reddit posters and Robinhood traders. People who own the market aren't going to allow that to happen. Like that movie with Eddie Murphy and cornering orange juice, except Eddie Murphy loses in real life cause can't have the little guy winning a rigged ...


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

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 ...


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