The rising tide of the commission-free broker…
Yesterday there were a ton of articles about commissions ending. Before last week, Robinhood was the ‘free’ brokerage everyone talked about. Then announced Lite, which is theoretically commission-free.
Now everyone’s messaging me…
“This is such a great day!”
Just looking at the headlines … everyone’s excited to trade more.
Commission-Free Broker: Headlines Don’t Tell the Whole Story
This is a screwed up industry. Look, I get it. If I didn’t know this stuff…
… if I was just starting…
… I would probably be excited by these announcements too.
The E-Trade Baby Needs a Suit of Armor
You’ve seen the ads…
The cute little E-Trade baby with all the knowledge and skills…
“Look how easy trading is…”
Sorry to pop the bubble, but studies show that 90% to 95% of traders lose. If that dancing baby were real, it would be a bloody baby … THE BLOODY BABY WOULDN’T EVEN BE ABLE TO BE SHOWN ON TV!
Which is why I have to warn people about this new development.
For me, commission-free trading doesn’t change ANYTHING. Commissions don’t really matter to me — they’ve always been a negligible cost and always will be. And you don’t become a millionaire by cutting your commission costs on trading! This move by the brokerages is like dangling a carrot in front of a vegan’s eyes.
Unleash Your Inner Trader or … the Lure of Commission-Free Broker
This is a trick. A trick to get poor people to trade more.
First, commissions are only $5 or $10 per trade. So you’re talking about saving what it costs to buy a few cups of coffee at your favorite coffee shop.
It increases the gambling aspect of trading. Why? Because now you don’t have to pay commissions. So you can, theoretically, trade more. This is little ticky-tacky stuff that lures in degenerate gamblers. It gets people excited.
You should not be trading more.
Commission-Free Broker Fails to Fix the BIG Problem
What’s the big problem? The problem I’m trying to help you solve?
People overtrade and have no idea how to plan trades.
I wish they were tripling commissions to make a higher barrier to entry. If fees were higher, people would be more hesitant. There wouldn’t be as much overtrading.
Churning Your Account Won’t Make You a Millionaire
Frankly, most people aren’t gonna become millionaires by overtrading. In fact, they’ll churn their accounts even more. So what’s gonna happen with all these brokers announcing commission-free trading?
My guess is it will increase trading volume. Which means more people will lose. Roughly 90% lose now. But it will probably go up … maybe 92% or 95% will now lose.
The Worst Mindset Trap I’ve Ever Heard
I know this is controversial. Everybody wants to save money, right?
But frankly, the race to commission-free reinforces the wrong priorities. People wanna cheap out. And they think they’re gonna do better saving a few dollars.
But traders don’t lose due to commissions. They lose because of overtrading. Or taking bad trades. Commission-free reinforces both overtrading and taking bad trades. People will take more bad trades, trade a lot more, and get more frustrated.
That’s why I had to write this post and get it out to you fast.
Crazy how all brokers going commission free are getting poor people into trading more, but that won’t make you rich. You MUST have patience and wait for only the best plays, Commissions always have and always will be irrelevant, study the fuck up and don’t give into these games!
— Timothy Sykes (@timothysykes) October 3, 2019
Are You Prepared for Battle?
This is a battlefield.
Investors and traders are losing the war. They’re getting crushed. If you compare trading to war, then you could compare commission-free trading to a military parade. Everyone’s excited. We all want to see the shiny stuff going by.
“Look, it’s a parade!”
But they’re masking the ugly reality. So when someone messages me and says, “this is so great…” I have to shake my head. No, it’s not.
If you go into the nuances of it … it’s not so great. It’s masking the big problems in the industry. And now, poor dumb people think they’re getting help. The fact is, they’re getting screwed even more.
Again, this is finance. This is trading. It describes pretty much everything that’s wrong with this industry and…
… explains why I teach.
A Warning to Those Who Value Education
Now you know why I have to warn people about this.
My job is to educate based on reality. It’s my job as a 20-year veteran to dispel the myths and expose the ugly realities.
Here’s a reality…
The firms are still gonna make money. Some people are saying “Oh my god, are these companies gonna go out of business?”
If you look at what their actual business is, they make less than 20% of their revenue from commissions. In fact, TD Ameritrade expects to lose roughly 15%–16% of its current revenue. For Schwab, it’s only around 7%. E-Trade expects around a 20% drop.
So, yes, it seems like they’re losing a small portion of their business.
But remember these are still the same brokers. And they’re luring dumb gamblers with this scheme. They definitely have ways of making it up on the back end. A side newbies and poor people don’t even know about…
The Rich Get Richer While the Poor Get Poorer
It’s kinda sad.
The poor think they’re getting richer when the rich are actually tricking them.
“Yay! Poor people … get excited … we’re lowering your commissions!”
And the poor people are like…
“Yay! Let’s save $5 or $10 because I’m poor and it means a lot to me!”
But they don’t realize what’s really going on.
The Hidden Costs of Commission-Free Trading
The brokerages are gonna find new ways of making money. How? Lots of hidden fees. Like payment for order flow. What’s that? What’s payment for order flow? Glad you asked…
Brokers get cash payments for routing orders through specific electronic trading firms. It’s how Robinhood can afford to be commission-free. But like I’ve been saying for a while about Robinhood…
… you can save on commissions but get crappy executions. What’s the point of saving $10 on a commission if you lose $250 because your order fill was crap? And that’s just one example.
When the brokers go commission-free they’re gonna make a little extra in lots of other ways. Like those crappy executions. Or market making. Or by charging you an extra tenth of a penny per share. If you trade with a big account, it might cost you an extra $400. Or more.
No matter how they do it … you’ll likely pay more in ways you can’t even see.
Remember, like I said, right now roughly 90% of traders lose. And this will make the percentage go up … maybe even up to 95%. They’re luring in the poor. And, frankly, the poor get poorer … and the rich get richer.
My Job Is to Cut Through the BS
Those of us who make millions laugh at this stuff. Not at the poor people, at the brokers using the race to zero commissions to lure in suckers.
It’s my job to teach you the ways of the rich. If you’re poor, I’m on your side. Think of me as your champion. I want to educate you so you’re prepared for battle. I want you to see through the BS and change the mindset of cutting costs when it’s not in your interest.
The Rich Don’t Like It
Why? Because I keep being real in an industry full of fakes. And now, it’s an industry with a shiny lure to draw you in and annihilate your account.
You could ignore me. Feel free to enjoy the big no-commissions push. Get screwed on executions. Join the 90%+ of traders who lose…
You get to choose.
Or, heed my warning, learn to plan your trades, avoid overtrading and be willing to pay commissions for better service.
You can thank me later. Hell, you can call me Robin Hood if you like…
Just not the broker.
If you’re ready to go deep, to really understand the nuances and build a foundation of knowledge to last a lifetime, apply for the Trading Challenge today.
Be prepared for transparency. Get ready to immerse yourself so you get the most out of your membership. But only if you’re ready. Do you have what it takes?
What Students Are Saying
Check out what my students are saying … this week alone:
“So glad I attended the inner circle at the summit. Jump started my trading. So much more confident. Made a nice little profit of $1100 following the rules and taking profits on $PURA. Love the morning dip buy. in at .11 and out .13. Go to the inner circle live trading if you ever have a chance. Worth it!”
And user BrandoKlein:
“6k shares in $UNRG @.3650 out @.41= +261.60 !”
And these Profit.ly users:
Bloodhound: “timothysykes in response to your question re results today. Bought NAKD 20K just premrkt @0927 hrs for .0575 and sold @0932 hrs for .64. Good process and no risk on overnight hold, which was important for this newb. Had to be away the rest of the day, so really didn’t do anything later as couldn’t have watched it.”
redwagonrider: “[expletive deleted] YA TIM there is the power. knowing how the market is reacting to super strong stocks at the end of the day. Taking the trades that are setting up. focusing only on the biggest % gainer. Effing love learning from you! adapt adapt adapt”
michaeldufresne: “timothysykes $500 on a 2k account on NAKD and $SPNV.”
cfcmickt: “Bought $CLSI Friday into the close at $0.028 FGD low price OTC as this had further green days after the first recently. Sold this morning for $0.036. Took my near 29% profit, did not want to be greedy and hold and hope for more. Safe profits. Yet another green month.”
MOKI: “$CLSI in at .0608 and scaled out, half at .0822 and the other half at .0870 +239.”
Or this from one of my top young students…
Jack Kellogg: “locked $CLSI 35k from .0335, sell .046s. $400-ish. nice way to start the week.”
Tweets from Students
Like this one from @sublimetrades:
Awesome trade on $CLSI otc breakout. Long 40k @ .0455, added 25k @ .048, and 55k @ .0565. Scaled out in the mid .06s to mid .07s for $1,860 profit (18.6 R). $2k a day keeps the real job away. #Forward🐢 #MondayMotivation @timothysykes pic.twitter.com/YxOO9XkeDn
— John Papa (@SublimeTrades) September 30, 2019
And this from @GaRlk888:
$CLSI OTC multi-day breakout.
Nowhere else you can make 24% to your deposit per day risking only 3 %. Awesome setup. Thank you @timothysykes ,@kroyrunner89 ,@Jackaroo_Trades ,@Dom_Mastro10 ,@iVarunMad . pic.twitter.com/F30t3FUmtp
— GaRlk088 (@GaRlk888) September 30, 2019
Or this one from @Chesskid90:
— Sean Riddell (@Chesskid90) September 30, 2019
Finally had my first $100+ day since I started trading mid-September. Bought $CVSI on first green day at 1.83 sold at 2.03 during the (slow) morning spike. Partnership catalyst w/major retailer. @timothysykes @StocksToTrade pic.twitter.com/WLeN6ogiBo
— Brandon H (@BHilton124) October 2, 2019
— Carlos (@Aristi0714) September 28, 2019
And this from @MalvarezJj:
— Coward Trader (@MalvarezJj) October 3, 2019
Bought 2000 $spnv late yesterday at $.19 and held overnight. Spiked to $.25 and sold for $240 profit. It kept going up to .33 but I could hear @timothysykes “take profits!!” I left another $300 but not a bad trade from $500 account.
— iceekikistocks (@iceestocks) October 1, 2019
And new Challenge student @InceNY1:
I’m done today! As a new challenge student Time to study!! $1345.64 profit @ $NIO $824.18 / $SPNV $521.46
I Will start to post all my trade @profitly
Thanks @timothysykes @StocksToTrade @tbohen pic.twitter.com/eYlfuDE0Xl
— ERIC INCE (@InceNY1) October 3, 2019
Do you have experience with zero-commission brokers? Share in the comments below. New to trading? If you get it, comment below with “I’d rather pay commissions than get crappy executions.” Comment below, I love to hear from all my readers!
Are There Any Safe Alternative Investments?
The stock market is famous for its volatility, so it’s not too surprising that risk-averse investors are keen to find safer ways to invest money. Traditional stocks and shares are vulnerable to fluctuations in the market, and this can cause major losses that can wreak havoc in any investor’s portfolio. It’s no wonder, then, that alternative investments are becoming more popular as those who are investing for the first time, as well as those who are seasoned investors, look for options that will give them a reliable and secure source of ongoing income without so many risks.
So, what are alternative investments? It’s a term that is used to describe any type of investment outside the standard three asset classes of cash, bonds, and stocks. While these more unusual investment options have a role to play in any investor’s portfolio, it’s important to be aware that these investments can’t take over from traditional assets. As an investor, you shouldn’t sell your stocks, or take your cash out of your savings account and put it all into untraditional options. In fact, the majority of financial experts believe alternative investments can be put to best use when it comes to portfolio diversification. Rather than putting all your money into stocks, it makes more sense to put some into stocks, some into bonds, and some into alternative investments such as fine art, wine, private equity, or hedge funds. This is one of the best ways to protect your portfolio.
Alternative investments have long been popular with institutional investors and high net-worth individuals, and this is because many of them require a bigger initial investment when compared to bonds and stocks. Also, in many cases, alternative investments have less liquidity than more traditional ones, so they are harder to cash in easily and quickly. Nevertheless, don’t be put off just yet. There are several benefits to making alternative investments.
Investing In Fine Art
Historically, price fluctuations within the fine art market do not reflect the standard fluctuations reflected in the traditional stock market. On the other hand, though, the art market has shifts of its own that may make investing more risky. Although buying sculptures and paintings in top auction houses and galleries will cost you a minimum of $10,000, it’s possible to enter this market with lower amounts of around $500 – $1,000 if you’re willing to gamble on undiscovered, smaller artists, or cheaper media such as lithography or photography.
Investing In Wine
You may never have considered investing in wine, but in fact, it’s possible to make steady returns of 6-15% each year in the long-term. The prices of some vintages will fluctuate year-to-year, however, the price of wine from the most popular vintages and vineyards will usually eventually increase when the supply becomes more scarce. On the downside, though, since wine collectors and connoisseurs are picky, you’ll need to do your research to choose vintages that represent a good investment, and you’ll need to invest in a large quantity to ensure sizeable returns.
Investing In Commodities
Livestock, crops, precious metals, and fossil fuels are all commodities. Their marketplace is extremely volatile since unpredictable world events and natural disasters can have direct impacts on prices. If there’s a drought in one year, the price of a certain crop may soar, but then the following year there may be a surplus that causes that commodity’s price to drop dramatically. Since commodities are unpredictable, they are better long-term investments than short-term ones. The safest way to benefit from commodities’ rising prices is to purchase ETFs. These mutual funds buy several commodities instead of just focusing on a single one. This eliminates a little of the uncertainty involved in choosing which commodity could fall or rise at any given time.
Investing In Real Estate
Real estate has long been an extremely popular form of alternative investment. Yet, even this long-standing option is subject to market fluctuations. The potential of crashes in the real estate market makes some investors nervous and wary about making investments in property. However, purchasing rental property usually provides a reliable and steady income as long as the right tenants can be found. It’s important, though, to remember other expenses such as general upkeep and property taxes that may limit profits together with major investments of effort and time.
Choosing The Right Alternative Investments
If you’re keen to make alternative investments, the key is to add them to an expanding portfolio of options. If you choose the right alternative investment for you, whether than be in wine, fine art, rental property or commodities, you should ensure that it forms part of a larger series of investments to protect you from potential risks. This way, you can enjoy greater financial security as well as maximum money-making potential.
The IPOX® Week, June 1, 2020
- Everything IPOX records big returns during May as investors flock to the New Generation of stocks.
- FANG-free, broad-based IPOX 100 U.S. (ETF: FPX) jumps +11.26%. Diversified IPOX International (ETF: FPXI) rises to +14.33% YTD, closes week at fresh all-time high.
- JDE Peet’s strong Amsterdam debut, ZoomInfo lined up.
Everything IPOX records big returns during May as investors flock to the New Generation of stocks. Amid stable U.S. yields, lower equity risk (VIX: -2.31%), geo-political jitters, declining global anxiety over Covid-19 and the S&P 500 (SPX) zooming through big technical resistance, IPOX finished May with another strong showing, with multiple Indexes closing out the month at or near all-time highs. In the U.S., e.g., the FANG-free, broad-based IPOX 100 U.S. (ETF: FPX) jumped +3.28% last week to gain +11.26% during May, a massive +673 bps. ahead of the S&P 500 (SPX), benchmark for U.S. stocks. The IPOX 100 U.S. (ETF: FPX) also finished out the month by recording its first positive YTD close since Feb. 26, 2020, as late-day positioning amid previously delayed index rebalancing’s propelled IPOX holdings which are typically underrepresented in the benchmarks. 88% of portfolio constituents rose during May, with the equally-weighted average (median) stock adding a massive +13.96% (+11.52%), ahead of the applied market-cap weighted IPOX 100 U.S. (ETF: FPX) and underlying the big strength in small- and mid-cap specialty exposure in light of a good month for the Russell 2000 (RTY), which gained +6.36% to -16.45% YTD.
Diversified IPOX International (ETF: FPXI) rises to +14.33% YTD, closes week at fresh all-time high. Strong IPOX momentum continued to extend to firms domiciled outside the U.S. with the diversified IPOX International (ETF: FPXI) adding +3.35% to +14.33% YTD, its 8th consecutive weekly gain, and up +10.69% for May. All global regions represented in the portfolio drove returns, including China (CNI), Developed Asia-Pacific (IPTA), Europe (IXTE, IPND) and Japan (IPJP). Gains were broad-based across market-cap spectrum and industries, led by Asia-Pacific key tech plays Sea (SE US: +43.58%), Meituan Dianping (3690 HK: +41.33%), Pinduoduo (PDD US: +40.96%), Freee KK (4478 JP: +39.29%) and Mercari (4385 JP: +18.32%), followed by specialty exposure linked to diverse other industries including Danish drug maker Genmab (GMAB US: +25.24%), Brazil Financial XP (XP US: +20.67%) and leading global energy plays Orsted (ORSTED DC: +14.29%) and Saudi Arabian Oil (ARAMCO AB: +4.27%).
IPOX International ETF (FPXI)-Investing since 11/2015
|Long-only IPOX® Indexes Price Returns (%)||Last Week||2019||2020 YTD|
|IPOX® Indexes: Global/International|
|IPOX® Global (IPGL50) (USD)||12.23||27.93||12.79|
|IPOX® International (IPXI)* (USD) (ETF: FPXI)||10.69||31.37||14.33|
|IPOX® Indexes: United States|
|IPOX® 100 U.S. (IPXO)* (USD) (ETF: FPX)||11.26||29.60||0.38|
|IPOX® ESG (IPXT) (USD)||7.13||–||–|
|IPOX® Indexes: Europe/Nordic|
|IPOX® 30 Europe (IXTE) (EUR)||11.99||34.55||15.03|
|IPOX® Nordic (IPND)||15.29||38.52||14.71|
|IPOX® 100 Europe (IPOE)* (USD)||9.52||30.97||3.02|
|IPOX® Indexes: Asia-Pacific/China|
|IPOX® Asia-Pacific (IPTA) (USD)||10.67||4.41||9.23|
|IPOX® China (CNI) (USD)||7.79||26.31||14.52|
|IPOX® Japan (IPJP)** (JPY)||13.00||37.91||-3.10|
* Basis for ETFs: FPX US, FPX LN, FPXE US, FPXU FP, FPXI US, TCIP110 IT and CME-traded e-mini IPOX® 100 U.S. Futures (IPOM0). Source: Bloomberg L.P. & Refinitiv/Thomson Reuters. For IPOX Alternative Strategies Returns, please contact firstname.lastname@example.org
NOW TRADING: 0.25 tick IPOX 100 U.S. Index Futures (Front month: IPOM0). Whether you are a risk manager or speculator, CME Group – the world’s largest exchange operator – now offers efficient and cost-effective access to the IPOX 100 U.S. Index (ETF: FPX) via emini IPOX 100 U.S. Index Futures (Front month: IPOM0). Contact email@example.com for further info and Free Data & Resources.
|MYOKARDIA (FPX)||62.83||ARVINAS (FPX)||-36.63|
|LIVONGO HEALTH (FPX)||49.79||HAPAG-LLOYD (FPXE)||-34.07|
|ARGENX (FPXE)||49.70||COUNTRYSIDE (FPXE)||-28.23|
|APPFOLIO (FPX)||44.28||GSX TECHEDU (FPXI)||-20.73|
|SEA (FPXI)||43.58||AIB GROUP (FPXE)||-20.08|
|REDFIN (FPX)||41.93||KOOLEARN TECH. (FPXI)||-16.84|
|MEITUAN DIANPING (FPXI)||41.33||CHINA FEIHE (FPXI)||-13.37|
|PINDUODUO (FPXI)||40.96||COOR SERVICE (FPXE)||-10.08|
|FREEE KK (FPXI)||39.29||ROKU (FPX)||-9.67|
|KINSALE CAPITAL (FPX)||37.47||GILEAD SCIENCES (FPX)||-7.35|
IPO Deal-flow Review and Outlook: JDE Peet’s surges in Amsterdam $2.4 billion debut. ZoomInfo lined up. With no U.S. IPOs taking place during the shortened U.S. trading week, focus was on deals in Europe with JAB’s coffee empire JDE Peet’s (JDEP NA: +13.78%) and German analytic database management firm Exasol (EXL GR: +35.58%) debuting strongly. With the global IPO window now open, the world’s third-largest record label Warner Music Group (WMG US), business-intelligence platform ZoomInfo Technologies (ZI US), fibrosis biopharma Pliant Therapeutics (PLRX US) and J&J-backed GenScript cell therapy unit spin-off Legend Biotech (LEGN US) are scheduled to list in the U.S. this week, while Tencent-backed payment platform Yeahka (9923 HK) is set to launch with over 600x oversubscription in Hong Kong. Other IPO news include: 1) Brookfield-backed WeWork rival Industrious poised for IPO; 2) Germany OTC drug maker PharmaSGP plans Frankfurt listing; 3) U.S.-listed NetEase and JD.com to list in Hong Kong in upcoming weeks; 4) multiple biotechs added to the U.S. pipeline including Avidity Biosciences Generation Bio, Progenity and Vaxcyte.
The post The IPOX® Week, June 1, 2020 appeared first on Low Cost Stock & Options Trading | Advanced Online Stock Trading | Lightspeed |.
Retail Resilience is More than Immediate Recovery—It’s Planning Ahead
One of the many things the current situation has taught businesses worldwide is that in addition to consumer dependency, the supply chain is incredibly fragile. And, a global pandemic that interrupts the proper flow of products today will create a different challenge down the road; one that completely devastates the market. In the immediate post-pandemic landscape, a plan to offload excess inventory that accumulated due to store closures is necessary. But what about the rest of the year?
The ‘What If’ of the Supply Chain
Now more than ever, it’s imperative to have a backup plan for excess stock. This will guarantee that retailers and brands have an inventory management system in play, should usual sales channels be affected. There’s a fine line to walk between meeting consumer demand and accounting for extra—and when something out of the norm affects all the stops involved, an alternative is not only nice to have; it can make the difference between company survival or demise.
The Clearing of the Warehouse
Trends come and go, as does inventory. How do you make room for new arrivals every season? By clearing out your warehouse—and sustainably, at that. In recent months, partnerships have formed between brands all over the globe that cater to taking care of the planet. There’s a whole market ready to be tapped into—one that supports and contributes to the circular economy that extends the lifecycle of millions of products. We call it the secondary market.
The Model that Supports it All
If the last few years showed an upward trend toward earth-friendly initiatives and the growth of the secondary market, the current landscape has likely shown its necessity. With the world watching and options dwindling, now is the best time to enter this exploding market and take advantage of what it has to offer in terms of recovery, velocity, and sustainability. B-Stock works this way. We help retailers and brands offload their excess inventory via a B2B online auction platform on which thousands of vetted business buyers from all over the world purchase goods. We create these auction marketplaces scaled to each company’s needs, allowing them to set the pace at which they sell, and who they sell to—protecting their brand name. It’s why nine out of the top 10 U.S. retailers are currently using our online auction B2B marketplaces to sell their excess and returned goods.
Learn more about how we’re helping the earth, one item at a time, by checking out our recent Earth Day article. And if you’re ready to take advantage of the secondary market for your overstock, request a demo.
The post Retail Resilience is More than Immediate Recovery—It’s Planning Ahead appeared first on B-Stock Solutions.
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