I told how they do it . Just google yourself . AIM fastest growing market in world cuz of no stamp duty .
But you donāt pay stamp duty on AIM stocks with freetrade, or Hargreaves lansdowne, or any other brokerā¦
I know what the AIM market is
So they get around not paying stamp duty by using the AIM of which they have next to none of the AIM stocks listed to buy.
Thatās very clever. I couldnāt have come up with that.
Sound like you need to google what the AIM market is
None of the FTSE stocks are available on AIM, itās a different market. Aim is all small cap companies
Thatās wrong. Itās not a thing. You cannot buy non-AIM stocks āby using AIMā.
eToro barely has any AIM stocks by the way.
Codf was being sarcastic, thatās the point he was trying to make.
Apologies, Codf! In my head, I read your comment in an enthusiastic voice. Your sarcasm game is too on point for me. (Iām not being sarcastic)
You have to disclose Dark Pool trades to regulators and also pay all liable Stamp Duty to the relevant national authority. Dark Pools, if done legally, do not provide an avenue to avoid Stamp Duty.
Again, whilst acting as a Market Maker does help avoid Stamp Duty this does not apply to retail trades. Market makers perform very specific functions (i.e. buying up baskets of equities to hand over in exchange for ETF units). This is not how eToro do it.
Iām not going to keep going on this, you are just wrong here.
Iām confused. Iām not sure what to think. I donāt know if this person is confused or just trolling around. In any case, in need for help. Of that I am certain
The question how eToro does it is almost is irrelevant. One should first and foremost consider what they do - I.e. their business model.
Stock broking is just a lure. Itās a classical line, hook and sinker business model based on the concept of a freemium offering (free stock broking) that is subsidised by their core offering. Nothing wrong with that, in principle. Many companies use that - eg Spotify with their free ad driven offering which drives people into their paid model.
The concern arises though when you look at their core offering. 68% of people lose money on CFDs, most likely an even higher number of people on Crypto which is even more akin to gambling and the Wild West.
Therefore, they lure people in with a decent proposition, only with the aim of driving them into add-ons where they know most people will lose money. Then lift up the covers and find out about their fees and charges model, and it becomes daylight robbery.
Itās unethical. The FCA will catch up eventually.
OK Iāve read the room here but Iād like to play devilās advocate for a second:
Sure, they make most of their money from people losing money on CFDs, and their low-fee offering is used as a lure because they want you to shift into their profit-generating revenue streams but what theyāre doing isnāt entirely different to credit card companies who offer low rates but hammer you as soon as you miss a payment, or offer great rewards but eye-watering interest rates. You could argue the credit card companies are giving you āfree moneyā in the same way etoro is baiting you into leveraged positions (free money).
Then you flip it and say, there are some customers who take out these credit cards but diligently pay them off in time every month, paying zero interest. Credit card companies make nothing on these customers, and probably lose money on all of the processing fees, but they know that cost can be absorbed because the vast majority of people canāt manage their money well.
Even if we argue eToro is being disengenuos by not mentioning their $25 fee, which it is, you could also make the argument that for a single $25 fee you are getting a wealth of stocks, etfs, commodities, crypto etc⦠all with fractional shares, and instant topups to any value, plus far better research and insights than we get here at freetradeā¦
Plus a web-app hint hint nudge nudge
Iām not saying they are a shining knight in the financial services category, far from it, but they arenāt any more or less dodgy than the competition.
Edit: Their withdrawal fee is actually a flat $5 now, down from $25 (source: https://www.etoro.com/trading/market-hours-fees/)
Except that they are more dodgy:
Trading 212
Trading 212, a company founded 15 years ago in Bulgaria that is now domiciled in London and FCA-regulated (although it still has an entity in Bulgaria and also one in Vanuatu), seems to be doing OK for itself. According to Companies House filings, the group made £28.9m of profit on revenues of £56.3m in 2018; the UK entity made just £1.8m of profits but this is a highly regulated UK company , you understand. (We asked Trading 212 why they had an entity in Vanuatu but they declined to comment.)
Well it turns out that this commission-free trading lark isnāt a source of profit for Trading 212 (or anyone else, for that matter). What it is, however, is a very effective bait-and-switch strategy: it lures customers in and then shifts them to financial products that do generate money. Lots of it. Probably enough to buy a golden bathtub with a golden sink-plug.
eToro
While Trading 212 keeps its actual stock trading slightly separate from CFDs on its platform, in eToro itās a much more seamless experience. So seamless, in fact, that as an inexperienced retail customer you might not quite be aware when you are moving from one product to the other, because itās all in the same place. So seamless, in fact, that one might almost think that it had been set up in this way deliberately.
Itās the same old bit.
Nothing changed since 2008.
I dunno man, as per your example screenshot it does say in writing with one that youāre buying the underlying stock, and then the other one displays the fees youāre going to be charged⦠I wouldnāt class it as dodgier than 212 in that case, but then I come from the generation of people who read the fine print and double check things before hitting buy
Upon some further digging, CFD is even worse than I thought:
- FCA analysis revealed that 82% of CFD clients lose money.
- The average loss amounts to £2,200 when trading these products.
- New measures are expected to save retail consumers between £267 million and £451 million per year.
The FCA announced on 01/07/19 that for CFDs and CFD-like options sold to retail clients, firms will be required to:
- Limit leverage to between 30:1 and 2:1.
- Close out a customerās position when their funds fall to 50% of the margin needed to maintain their open positions on their CFD account.
- Provide protections that guarantee a client cannot lose more than the total funds in their CFD account.
- Stop offering monetary and non-monetary inducements to encourage trading.
- Provide a standardised risk warning, which requires firms to tell potential customers the percentage of their retail client accounts that make losses.
CFD dont have stamp duty?
They do not.
Hi just a newbie here on Freetrade but have been a EToro user since 2014 and donāt really have any complaints I have a much wider range of stocks and etf selection and indices and I get paid my dividends etc also the withdrawal fee is flat $5, if you are in a premium tier in EToro deposits more than $20,000 that fee is waived and u get several other benefits.
So my question here is who should I close my stock holdings On eToro and invest in Freetrade when I have to pay £1 for every trade to be processed instantly and pay stamp duty and 0.45% forex fees etc ?
Any advice from the community or Freetrade themselves would be appreciated why Freetrade stacks up better than eToro cause till now I am struggling to find any USP