Author Topic: Beware of commission-free brokers!  (Read 1282 times)

eddieb

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Re: Beware of commission-free brokers!
« Reply #15 on: February 02, 2021, 05:48:43 PM »
Shares fell 63% on Tuesday to $81 - a far cry from last week's record of almost $350.
I think that was always on the cards, only a matter of when it would fall.
I hope some managed to make a profit out if it but no doubt some will have bought in at the high point.
Disclaimer. Posts are just my thoughts,  not recommendations.  Do your own due diligence before trading

Caesar

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Re: Beware of commission-free brokers!
« Reply #16 on: February 03, 2021, 01:13:53 PM »
Looks like the end is near for the Reddit traders.
Cheerleader Dave Portnoy sold his stocks for a whopping $700k loss as the pumped-up stocks fell.
GameStop down 60%, AMC down 41%, Blackberry down 21%, and silver down off its highs.
Hail Caesar.
No, just a bit of rain

eddieb

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Re: Beware of commission-free brokers!
« Reply #17 on: February 19, 2021, 07:12:36 PM »
Robinhood had an incredible 3 million new accounts opened in Q1 last year. I don't know the figures for the rest of the year, but the vast majority of their newer members are, not to put to fine a point on it, financially illiterate.
The lack of market understanding and sheep-like behaviour isn't good for the investors and reflects poorly on the markets and regulators who permitted the gamification of investing.
We haven't seen the end of this, law suits are already flying around.
Disclaimer. Posts are just my thoughts,  not recommendations.  Do your own due diligence before trading

Dougal1984

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Re: Beware of commission-free brokers!
« Reply #18 on: August 27, 2021, 11:18:12 PM »
It might be worth adding, but not all 'commission-free' brokers are bad.  The more competition we have, the better it is for the consumer.

Similarly the UK/EU regulations do not allow certain types of trading that say US brokers such as Robin Hood employ.

It can have some pro's and some cons.  If a market is fairly low volume, or illiquid, would you be willing to pay a small premium on a spread to a market maker to get your trade executed quicker?

Kaitsu

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Re: Beware of commission-free brokers!
« Reply #19 on: August 28, 2021, 06:58:16 AM »
It might be worth adding, but not all 'commission-free' brokers are bad.  The more competition we have, the better it is for the consumer.

Similarly the UK/EU regulations do not allow certain types of trading that say US brokers such as Robin Hood employ.

It can have some pro's and some cons.  If a market is fairly low volume, or illiquid, would you be willing to pay a small premium on a spread to a market maker to get your trade executed quicker?

All good points, @Dougal1984, and a big welcome to NTN! :)

The major regulatory authorities have certainly tightened their grip over financial markets in recent years and I am sure their monitoring is also much more stringent that before. It is only an intuitive feel, but it does seem that there are far fewer "horror stories" about regulated brokers nowadays.

Offshore brokers with no regulation, or operating under a dubious regulatory name, are still a risk factor for unaware traders and there are still many low-capitalised newcomers who are drawn to them for the high leverage availability. However, even amongst those there are some reputable names that are subsidiaries of major brokerages that are highly regulated in their home markets. These types of offshore subsidiaries offer more flexible terms and not likely to be fraudsters due to their parentage.

But due diligence is always a necessary component in selecting an appropriate broker.
Ships are safe in harbour - but that is not what ships are for......