Jump to content
DOSBODS
  • Welcome to DOSBODS

     

    DOSBODS is free of any advertising.

    Ads are annoying, and - increasingly - advertising companies limit free speech online. DOSBODS Forums are completely free to use. Please create a free account to be able to access all the features of the DOSBODS community. It only takes 20 seconds!

     

Online vs Traditional Broker


Recommended Posts

Quick question - I'm currently using HL for my share purchases, with the £11.95 fee per trade. Does anyone know of any good reason why I shouldn't switch to using an online service such as Uphold/Revolut instead. They're fee-free and offer fractional share purchases.

I'm aware their range isn't huge, but it's mainly US stocks I'm interested in right now anyway, and they appear to be adding to their offering all the time.

Guess the main risk is probably the company going pop, though the T&Cs say this ""DriveWealth (parent company) is a member of the Securities Investor Protection Corporation (“SIPC”). SIPC currently protects the securities and cash in your Account up to $500,000 of which $250,000 may be in cash. The SIPC does not protect against the market risks associated with investing." 

Edited by Craig
Added T&Cs
Link to post
Share on other sites
19 hours ago, Craig said:

Quick question - I'm currently using HL for my share purchases, with the £11.95 fee per trade. Does anyone know of any good reason why I shouldn't switch to using an online service such as Uphold/Revolut instead. They're fee-free and offer fractional share purchases.

I'm aware their range isn't huge, but it's mainly US stocks I'm interested in right now anyway, and they appear to be adding to their offering all the time.

Guess the main risk is probably the company going pop, though the T&Cs say this ""DriveWealth (parent company) is a member of the Securities Investor Protection Corporation (“SIPC”). SIPC currently protects the securities and cash in your Account up to $500,000 of which $250,000 may be in cash. The SIPC does not protect against the market risks associated with investing." 

HL is a online popular broker on these boards, but it depends on a lot of things. 

1. Are you looking to trade, or invest for the longer term?

2. How much capital are you working with?

3. What markets do you want to trade?

4. How experienced are you?

5. Do you use stop-losses or position sizing to limit your risk?

6. How big would your typical holding be?

7. How long would you expect to hold the shares you buy?

It's hard to tell from you post.. Your interest in fractional shares suggests a smaller account, but your interest in the SIPC limits suggests a larger account.

Generally speaking though, there's no such thing as a free lunch. Commission free trading just means you're paying via wider spreads.

Also bear in mind that during the most extreme market volatility, lots of broker platforms struggle or crash completely, even some of the well known ones.  Not a problem if you're just accumulating shares for the longer term, but dangerous if you're swing or day-trading with stop-loss orders.  

As a rule, it's usually best to stick with well know, well established brokers that have proven themselves over several decades.  The only newer broker I'd personally recommend is TastyWorks, due to the reputation and visibility of the team behind it. They're great value, with a great platform, but you can only trade US stocks/futures/options... no non-US stocks, unless they also have a US based ADR associated with them.

Edited by MvR
Link to post
Share on other sites

Cheers for the comprehensive answer @MvR. I suspect I'd fall under the 'enthusiastic amateur' banner, certainly compared to your good self! I'm mainly dealing in smaller amounts, more to build up a long-term portfolio, so no need for any complex trading instruments.

In reality I'll probably end up using a mixture of HL and Revolut, depending on size of investment relative to fees and availability of specific stocks.

Link to post
Share on other sites
  • Recently Browsing   0 members

    No registered users viewing this page.

×
×
  • Create New...