Leadcapital Markets - TRADE.com

[Andy]

Official discussion thread for TRADE.com at Digital Cash Palace.

Please be honest and fair with the broker being discussed.

More about TRADE.com Broker.

 

[Gravelwood]

The recent update of Trade.com is impressive in its ambitions. The company stopped being a mere CFD brokerage and starts offering some investment products. One of the most interesting ones is IPO. As long as the brokerage is licensed by CySEC and UK regulator, I think the new features are worth paying attention too. I don't know whether forum rules allow posting any links here, so I'm not giving the link. It's easy to find though
Anyway, this is something I personally got interested in and I'd appreciate is my experienced colleagues could have a look and share their opinion on the brokerage and IPO-investments service in particular.

 

[Adowyn]

I wonder what lies behind these "ambitions" of Trade.com. They were a good CFD brokerage as far as I'm concerned. But such a radical change in the company's structure, partners and products… isn't being a mere intermediary on the market is not profitable anymore?
As for your question IPOs can be difficult in terms you never know what % of your order will get filled, so its rather difficult to balance the portfolio of several IPOs. You may want to invest a thousand, but they will let you have only $300 worth number of stocks.

 

[Gravelwood]

Good to know. Depends on how many IPOs you take part in, I guess. If there are many, the portfolio will balance itself.

 

[Adowyn]

I've had a look at the website. If you don't want to trade yourself, why don't you simply choose some thematic investment portfolio there?

 

[Gravelwood]

I'm considering such options too, you are right. In fact, I still like daytrading. I just have a feeling that I must move further. Day trading is a vicious circle, when you have to work to make a living. It includes daily routine, charts analysis, active trading, examining own trades, etc Wise people say money can multiply itself, so I want to move a bit in this direction of passive investments as opposed to active trading on my personal account. I associate this change with a more relaxed way of life. Hopefully profitable as well.

 

[Direbringer]

Is IPO something like investing in startups? Who is responsibnle for chosing the potentially profitable companies to invest in?

 

[Gravelwood]

Not exactly startups. In my understanding, startup is a firm that has not proven to be successful yet, but its got nice idea and potential. With IPOs we deal with companies that have grown big enough to be offered on famous stock market exchanges like NYSE and IPO is the first step to do so. What Trade.com offers is a pre-IPO. The very first stage that comes prior to the start of rotation of such stock on exchange publicly. Normally if brokerage offers such feature, he is responsible as well for chosing the best options available on the market.

 

[Direbringer]

Got you! Totally different from ICO in this case. I had ICOs in mind when asked a question. What if you don't trust the brokerage and want to choose the company yourself? Won't it be more profitable to find the company yourself and invest directly without any intermediaries?

 

[Adowyn]

Pre-IPO stocks are being sold in extremely large blocks usualy. So you can cope yourself only if you are a billionaire. Normally the comany offers pre-IPO discount to large hedge-funds or wealthy private investors. If people like us want to participate in pre-IPO - we necessarily need an intermediary who buys this block of discounted stocks anfd then allocates shares among private small investors.

 

[Gravelwood]

Guess its necessary to mention that the expected positive outcome of pre-IPO investments is much higher that the probability of a positive outcome of startups investment. Usually the company is already well known and the usefulness of its business and its potential is not questionable. Like when Alibaba decided to do a pre-IPO. Everybody knew what Alibaba is by that time. Stocks were distributed first at the price of around $60 per share. On the first day of exchange trading this stock closed around $90 per share. +50% in just a few month is a fantastic result and this is why pre-IPOs are so fascinating. Usually intermediaries like Trade.com take their commission, which is quite big, but on the other hand the work done by brokerage in this case is really hard too, so its normally worth it.

 

[Direbringer]

I don’t know.. For me even several thousand dollars is quite a large investment. Is it possible to join some group of people for such investments through Trade.com or some other brokerage.

 

[Gravelwood]

I don’t think it’s a good idea at all. The positive side of working with a regulated brokerage is that you can feel safe about your money. Money is gonna be stored on a segregated bank account and broker won’t have full access to these funds. If you do some joined investments, you will have to trust your capital to somebody else who will have full control of the moneyflow and send it over to the brokerage under his or her real name. Brrr, not for me for sure. Unless I'm the one given the control of the money lol

 

[Adowyn]

I agree! If you can’t afford to invest as much as the broker requires as a minimum investments, you should try some other trading strategies. If investments is something you are interested in, you may consider opening some regular CFD account and buying interesting stocks and indices long-term there. Just make sure the brokerage is really reliable, so that it survives enough to overlive your investment lifecircle and don't use too much leverage.

 

[Direbringer]

Alright, I see. Your arguments look really important. But ok, lets say, I decide trading CFDs with Trade.com, not sending the money to IPO’s or special investments portfolios. And lets say my trading zen allows me “forget” about my opened long positions. And - the story is a story - while I wait for my investments to grow into something significant, broker goes bankrupt for one or another reason. What will happen? In case I buy stocks - stocks are mine no matter what happens to the broker, from what I understand. But with CFDs I won’t really own the asset. So what will happen to my funds if the broker is no longer there?

 

[Gravelwood]

This is exactly why we all love regulated brokerages. If a regulated broker like Tradecom goes bankrupt, the regulator will take care that all the money broker stored on your segregated account will be transferred to some other brokerage of your choice or to your bank account. Even more than that! If broker turned out to be a scam but it was regulated by CySec - this is gonna be a CySEC’s headache how they plan to compensate you for running into these troubles. Up to $20K will be compensated no matter what trouble happens to the broker. Hope this information helps. You can read more at CySECs official website about it.

 

[Adowyn]

Alright, I see. Your arguments look really important. But ok, lets say, I decide trading CFDs with Trade.com, not sending the money to IPO’s or special investments portfolios. And lets say my trading zen allows me “forget” about my opened long positions. And - the story is a story - while I wait for my investments to grow into something significant, broker goes bankrupt for one or another reason. What will happen? In case I buy stocks - stocks are mine no matter what happens to the broker, from what I understand. But with CFDs I won’t really own the asset. So what will happen to my funds if the broker is no longer there?

You know, I’ve been thinking about this issue for a little while. I mean about this “trading zen” you’ve mentioned. Jokes aside this zen does not seem to be reachable that easily. I don’t trade long term but I have a strange feeling that I don’t even try, because I doubt I can. I’ve heard many times that longer-term trading is easier, less stressful, etc. But why, why do so many people keep daytrading?

 

[Direbringer]

What do you think yourself? Why?
If anyone is interested in my opinion, I think that this is strongly connected with the fact that if you simply invest, you must be ready to go through the hell that investors are going through during the last few weeks. Just imagine investing in SnP index when it was 3400?

 

[Adowyn]

I dunno. Yeap, this is a great point, but why would anyone with no mental disease in a medical record invest in the market at all time highs? No, I think the reason is different. Yes, I think we all kinda have a feeling that we can keep earning on both rising and falling market, when we daytrade. This is partially true. But I don’t know any of the live traders who can be profitable every week with daytrading. Daytrading is full of drawdowns and pain. Remember Warren Buffett who had this deal with famous hedge fund trader? Buffet said that investing in SnP will turn out to be more profitable in couple years than trying to manage hedge mund with alternative trading strategies. And you know what, he was right!
The problem of daytraders I think is that they simply can’t control themselves and just leave their investments alone.
I am like that myself and this is a great paradox. My mind says investing can be more profitable. But my hands reach the trading platform and keep pressing those buy and sell buttons.

 

[Gravelwood]

I know what you’re saying.
I think this is why so many people trust their funds to be managed. This is actually why I’ve started this thread. Leaving control to someone else is a great relief. I think tradecom managers can help with that. IPOs, thematic portfolios, other longer term investment opportunities are easier to be handed to someone else if you mean to forget about the capital for a few years. I can’t imagine myself not trying to close the trade every day if I am left eye to eye with a trading platform.