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Online Brokers Launch New Products and Features as Markets Rally

While bullish retail traders continued to place online transactions at a record pace amid a historical rally for stocks, online brokers and fintech developers are rolling out new products and features. Early statistics for trading in May show continued trading surges compared to the same month in 2019, though they are flat compared to April.

Key Takeaways

  • A surge in trading led to more outages at several major online brokers
  • Schwab’s takeover of TD Ameritrade received a key approval
  • thinkorswim launches a web version of its powerful trading and analytical platform
  • Two brokers are offering rebates for trades placed on their platforms
  • A new exchange for futures traders opens
  • Baby boomers nearing retirement can use a new app to estimate income and lower expenses

While bullish retail traders continued to place online transactions at a record pace amid a historical rally for stocks, online brokers and fintech developers are rolling out new products and features. Early statistics for trading in May show continued trading surges compared to the same month in 2019, though they are flat compared to April. 

More Outages on Big Trading Days

A surge in trading the morning of June 5 caused a number of problems for online trading platforms, peaking around 9:30AM Eastern time. Downdetector reported issues at Charles Schwab, E*TRADE, Fidelity, Merrill, Robinhood, and TD Ameritrade. On Twitter, customers of M1 Finance, and thinkorswim were complaining. Customers who lodged complaints with their brokers on Twitter were asked to call support lines.

It is odd to see so many brokers suffer simultaneously when the market circuit breakers have not been tripped. These brokers do not share clearing firms; most are self-clearing. An M1 spokesperson tells us on Twitter, “We had a high and unusual burst of traffic this morning, which may have caused issues for some people. We’re currently working with anyone who was affected.” A TD Ameritrade spokesperson reports via email, “Sheer volume of messaging. We had delays for about 4 minutes of orders which were executed but messages were slow.” From Schwab, we were told, “Due to a technical issue, we experienced a delay in reporting trades for a small number of clients this morning. This was a reporting delay (not trading) and we worked rapidly to remedy the situation.”

Thinkorswim for Web Launched.

In late May, TD Ameritrade launched a streamlined version of its downloadable platform, thinkorswim (TOS), which runs in a web browser. This version has been in development for nearly two years and supports both live trading and papermoney, a trading simulator. The web version of TOS is connected to all the same data sources and trading engine as the desktop version and includes the same watchlists, including dynamic watchlists which update automatically as stocks pass the filters.

Harrison Napper, senior product manager for thinkorswim at TD Ameritrade says, “We want people to be able to use TOS regardless of device.” Napper notes that TOS web works on phones, tablets, or desktop computers and that TOS itself is one big ecosystem. Napper says, “We focused on the transactional pathway and built our process in a way to adapt to feedback rapidly. We’re getting the bones out to customers and are asking them to help us evolve based on their needs.” As customers ask for additional capabilities, including studies for the technical charting package, Napper says that those items can be added. 

“One of the reasons it took a while to bring this out was the challenge of managing the data,” Napper says. When you refresh the page, it reloads the entire application. The team has done a lot of work on lightening the data payloads and the weight of the application itself. The tech team had to invent some technology to tie together the front-end, the data feeds, and the trading engine. During a brief hands-on test, we found the web platform very responsive and suitable for quick trading tasks and checking on balances. The analytical power of the desktop platform is still the place for long analytical and trading sessions.

Schwab Takeover of TD Ameritrade Clears Hurdles.

On June 4, 2020, shareholders of Charles Schwab approved the proposal to acquire TD Ameritrade. At a separate meeting the same day, the shareholders of TD Ameritrade approved the acquisition. Both groups of shareholders offered very little resistance to the merger, with less than 1% at the meetings voting in opposition.

Earlier in the day, the Department of Justice gave Charles Schwab antitrust approval for the acquisition. There were concerns about the concentration of advisor-managed investments since the merger would result in over one-third of the registered investment advisor custody market under one roof. All that remains to proceed with the takeover are some additional regulatory approvals. The buyout is expected to be completed in Q4 2020.

Trading Rebates

Two brokers, one that is new, are offering to share the revenue that they generate from payment for order flow with their customers. 

SogoTrade has introduced a new pricing structure as well as a program called “Get Paid To Trade” which launches Friday, June 5, 2020. Commissions on equity limit orders are being cut from $4.88 to $0, plus orders that add liquidity will earn $0.001 per share on a minimum order size of ten shares. This is a unique program structure. 

As part of this program, SogoTrade introduced a new order type that appears on the order entry screen as GP2T (Limit). This order type sets up a limit order that defaults to a penny away from the market which the customer can change to up to $0.05 away from the market price. If the order is considered to add liquidity to the market, you’ll see the credit that your order will generate once it executes. The order status page has a new column with the header “GP2T” that is highlighted in green if you have working orders if a credit is pending.

SogoTrade GP2T Order Verification.

It can be difficult for a beginning or intermediate trader to know in advance if an order is making or taking liquidity, but SogoTrade’s order entry process tells you right away if your current order qualifies for the credit. Kristopher Wallace, CEO of Asset Management at SogoTrade says, “We’ll make less money by revenue sharing, but we think we’ll be attracting new business and will make it up in volume.” Wallace says that SogoTrade wants to be competitive in a zero-commission world and that this is a simple way to get to a rebate compared to some other brokers that share rebates.

All Of Us, a San Francisco-based firm that opened its virtual doors in late May 2020, is offering to share revenue generated by their financial relationships with market makers with clients, and also automatically enrolls everyone in a fully-paid securities lending program. All Of Us pledges to credit customer accounts with $0.0001 per share traded (minimum price of $1 per share) on the day after a trade is executed. Customers who have stock that gets loaned to short sellers will be credited monthly with 30% of the revenue that the brokerage is paid by its clearing firm, Apex Clearing. Stock trades are commission-free and margin interest is 5.75%, which is below average.

All Of Us has a website as well as iOS and Android mobile platforms. At launch, only stocks and ETFs can be traded, but the firm says its roadmap includes adding retirement accounts, mutual funds, equity options, and bonds over the next couple of years. The order may vary depending on customer interest. All of Us is registered in 47 U.S. states and the District of Columbia but is not yet registered in Illinois, Massachusetts, or Missouri.

Of these two offerings, SogoTrade’s is ten times as generous with the rebate.

A New Exchange for Futures

The Small Exchange, a futures exchange offering smaller, simpler products aimed toward retail customers, launched on June 1. This exchange has been in the works for a couple of years as the developers have refined the process of building, pricing, and trading the products. 

At launch, there are three Smalls available that cover stocks, the US Dollar, and precious metals. The Small Stocks 75 Index is comprised of 5 equally weighted sectors with each sector containing 15 stocks. These sectors include information technology, industrial, energy, financials, and materials. Small US Dollar is priced directly to the dollar, and it spreads USD exposure across the Euro, Chinese Renminbi, Japanese Yen, British Pound, Canadian Dollar, Australian Dollar, and Mexican Peso. Small Precious Metals combines and weights the three most popular metals by global production, US consumption, and trade volume. Next up in the product queue are Smalls that cover 10-year treasuries and the global oil market. 

The contracts are designed to be uniform and move in 0.01 increments that equal $1, expiring on the third Friday of every month. The Small Exchange is the brainchild of financial network tastytrade, and the products are available to trade now at tastyworks, Tradovate, and Gain Capital, among others. Interactive Brokers, which recently made an investment in The Small Exchange, will offer the Smalls in the near future.  Tastytrade has a free course that describes what the products are and offers practical examples of trading. 

Dough Adds Options Trading

Dough, a commission-free iOS and Android app-centric online broker that launched last summer, recently rolled out options trading to its customers. To qualify, you must have at least a $2,000 balance.

The brokerage is helmed by Victor Jones, who had a 12-year tenure at TD Ameritrade and thinkorswim, and was TD’s director of trading and operations. Dough itself is part of the tastytrade family. Jones is enthusiastic about educating new investors and traders, so the platform is loaded with short videos explaining recent market changes and investing concepts. The order entry ticket defaults to a limit order, which Jones encourages. Jones, a millennial himself, says his generation wants to develop a deeper understanding of the markets, and describes dough as, “a long-term relationship for a generation of investors to help understand risk and strategy through a new business model.”

You can open an account at dough without making a deposit, and access all of the platform’s content at any time. New unfunded accounts have 15 days of free real-time quotes; if still unfunded, the quotes revert to delayed.

New App for Baby Boomers Nearing Retirement

Kindur, an SEC-registered investment advisor dedicated to helping retirees feel prepared moving into retirement, recently released the Silvur app, designed to help baby boomers and others avoid outliving their money. At launch, it’s an iOS-only app, but there will be an Android version available soon. Silvur leverages another Kindur-developed piece of technology, SmartDraw, to estimate baby boomers’ financial picture throughout retirement with the goal of providing awareness of potential financial pitfalls.

The Silvur dashboard lets you know how you’re progressing towards retirement.

The app is free to download and use, generating revenue through affiliate partnerships, which users can take advantage of if they so choose. Silvur has partnered with a variety of consumer brands, including Uber Eats, Hulu, wine.com, and others, that offer rebates which are deposited into users’ bank accounts. Silvur is adding new partners every week, including financial services such as home refinancing, credit cards, home and auto insurance, wills preparation, and income tax filing. 

Silvur calculates required minimum distributions (RMDs) from traditional IRAs, which is changing all the time, especially through the various relief packages that have been passed by Congress during the pandemic. The interface is designed to create a guidedexperience. Each step is carefully laid out and in a hands-on test, I didn’t run into any spots where I had to figure it out on my own. If you’re over 55, this app is extremely useful and does a good job of walking users through the process of planning for retirement.

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Donald Trump blasts ‘fools’ who oppose good Russian ties

US President-elect Donald Trump has posted a progression of tweets censuring the individuals who contradict great relations with Russia as “‘dumb’ individuals, or nitwits”.

Mr Trump promised to work with Russia “to comprehend a portion of the numerous… squeezing issues and issues of the WORLD!”

His remarks came after an insight report said Russia’s leader had attempted to help a Trump race triumph.

Mr Trump said Democrats were to be faulted for “gross carelessness” in permitting their servers to be hacked.

In a progression of tweets on Saturday, Mr Trump said that having a decent association with Russia was “no terrible thing” and that “lone “idiotic” individuals, or simpletons, would believe that it is awful!”

He included that Russia would regard the US increasingly when he was president

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Bulls and Bears Took on More Currency Exposure in Week Through January

he most striking improvement among theoretical situating toward the finish of a year ago and the primary session of 2017 is not that modification were little. There was just a single gross theoretical position modification of more than 10k contracts. With sterling apparently not able to maintain even humble upticks, the bears added 13.1k contracts to the gross short position, lifting it to 120.2k contracts.

Or maybe, it is eminent that examiners for the most part added to positions, long and short, as opposed to close positions at the very end of the year. Examiners added to net long outside cash prospects positions, aside from in the Japanese yen and Swiss franc where 2.6k and 2.5k contracts were exchanged separately. Examiners likewise added to gross short positions. Here there was just a single exemption, the Japanese yen. Despite the fact that the dollar shut comprehensively higher in front of the end of the week, every one of the monetary forms we track here, spare the Mexican peso, picked up against the dollar in the three sessions since the finish of the CFTC reporting period.

Every once in a while it is helpful to review why many market members take a gander at the theoretical situating in the cash fates advertise. It is not that the outside trade is essentially a prospects showcase. It is principally an over-the-counter market in which every day turnover midpoints in abundance of $5 trillion a day.

Trade exchanged monetary forms and alternatives represented around 3% of the normal day by day turnover as indicated by the BIS study. Be that as it may, past reviews have discovered some contemporaneous connection between’s market heading and net position changes. We think it additionally offers knowledge into a specific market section of pattern supporters and energy brokers. It is not by any means the only device, yet one of a few data sources.

One ramifications of this is albeit theoretical positions in the money fates market are moderately extensive, it is still little contrasted and the money showcase. Along these lines, it is difficult to see the genuine essentialness of a record vast position, as though there is some market top. At some point, examiners are not driving the costs, possibly there is another fragment, national banks, enterprises, as well as genuine cash that is more essential at any given minute.

We invest some energy taking a gander at gross positions instead of just net theoretical positions, which is the more customary approach. We think a more granular look is frequently fundamental. There is a distinction between short-covering, for instance, and new purchasing, however it appears to be identical in the net. Additionally, the gross position is the place the introduction is not the net position. A net position of zero does not mean the market is nonpartisan. Net positions could be huge, which implies a short press or a negative stun could in any case troublesome. The positions that must be balanced are captured in the gross measure not the net figure.

We find numerous customers are likewise keen on theoretical situating in the US Treasuries and oil. The net and gross short theoretical Treasury position has swelled to new records. The bears added 23.8k contracts to the as of now record net short position, lifting it to 616.2k contracts. The bulls attempted to pick a base and added about 20k contracts to the gross long position, which now remains at 471.2k contracts. These modification prompted to a 3.8k contract increment in the net short position to 344.9k contracts.

The bulls delayed in the oil prospects toward the finish of 2016. They exchanged short of what one thousand contracts, leaving 608.1k gross in length contracts. The bears added 4.1k contracts to the gross short position, giving them 168k. These conformities trimmed the net long position by very nearly 5k contracts to 440.1k.

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3 ways to profit in the ‘year of the dollar’

In December, the Federal Reserve raised loan fees for the second time since the Great Recession and included the desire of a 2017 financing cost climb to its gauge. Furthermore, only a couple days prior, the abundantly anticipated minutes from the most recent Fed meeting demonstrated the most hawkish tone from the national bank in two years.

In the meantime, Europe has been dove into political turmoil after a year ago’s Brexit vote and the later abdication of Italy’s leader. Somewhere else, the Bank of Japan proceeds down the way of negative rates and forceful security purchasing.

Put it all together, and it isn’t astounding that the U.S. Dollar Index is up against 14-year highs.

Speculators may have missed so much discussion on account of babble about the Dow Jones Industrial Average at the end of the day almost hitting 20,000. Be that as it may, paying little respect to your assignment to stocks or your venture skyline, this sort of huge picture incline in the dollar implies right now is an ideal opportunity to position your portfolio to benefit and, maybe most critical, to keep away from a portion of the pitfalls that can originate from a solid local cash.

Here are a couple ideas dollar exchanges ought to consider:

Residential plays over multinationals

There’s a considerable measure of seek after shopper stocks in 2017 on account of an enhancing work market and any desires for a jolt under a GOP-controlled Congress and President Donald Trump. In any case, remember that not all retailers are made equivalent especially those with abroad operations that are adversely affected by the wide dissimilarity in monetary standards at this moment.

For example, retailer Wal-Mart Stores Inc.(WMT) said troublesome money trade rates shaved very nearly 2.5% off profit for each partake in the second quarter of 2016. On the other hand consider that in the monetary final quarter of 2016, athletic attire goliath Nike Inc.(NKE) saw its income development cut down the middle because of forex weights, from 12% year-over-year in consistent cash measures to only 6% including real money changes.

To take advantage of the “reflation” exchange that numerous financial specialists are counts on in 2017, you need to represent the headwinds that a solid dollar are making for multinationals at this moment. The most ideal approach to do that is to consider customer plays that do by far most of their business here in the U.S. – for example, Foot Locker Inc.(FL), which has been an uncommon splendid spot in retail throughout the most recent couple of years.

Supported money ETFs

Obviously, in the event that you need a steady portfolio, you can’t just purchase just local centered values. Geographic expansion is similarly as imperative as enhancement crosswise over parts and resource classes. Such a large number of financial specialists keep on holding worldwide plays in light of a legitimate concern for a balanced portfolio, regardless of the possibility that it implies battling a daunting struggle as a result of a solid dollar.

The uplifting news, notwithstanding, is that you don’t need to leave yourself to torment through a solid dollar and a powerless euro when you put resources into Europe. Nor do you need to stress over the yen-dollar conversion standard when you put resources into Japan. That is on account of there’s an entire group of cash supported ETFs to permit financial specialists to put their cash in outside business sectors yet keep away from forex issues.

Consider that Japan’s Nikkei 225 file is up around 25% from its July 2016 lows. The WisdomTree Japan Hedged Equity Fund(DXJ) is up 35% in a similar period on account of assurance from forex issues and a somewhat better-performing rundown of stocks – while the non-supported iShares MSCI Japan ETF(EWJ) is up only 10% in a similar period because of battling a difficult task against a solid dollar.

In the event that you need to differentiate your portfolio comprehensively, you ought to consider supported assets that incorporate the Japan-centered DXJ, the WisdomTree Europe Hedged Equity Fund(HEDJ) to play Europe or the iShares money Hedged MSCI EAFE ETF (HEFA) for developing markets.

Dollar list ETF

In the event that you are searching for an immediate play on a rising dollar as opposed to putting resources into stocks, figuring out how to exchange remote trade can appear like an overwhelming undertaking. Gratefully, there’s the PowerShares DB US Dollar Index Bullish Fund(UUP).

This ETF is attached to the U.S. Dollar Index, which is a measure of the greenback against a wicker container of other worldwide monetary standards including the yen and the euro. It’s a straight money play, however that doesn’t make it straightforward or hazard free. In the event that the dollar debilitates, you’ll lose cash similarly as though you’re putting resources into a stock that has fallen on difficult circumstances. Furthermore, obviously, PowerShares takes a little cut of your speculations en route that indicates 0.8% yearly, or $80 a year on each $10,000 contributed.

Still, in the event that you need to conjecture on the dollar or support against a solid U.S. cash keeping down other worldwide ventures on your rundown, it’s maybe the least demanding approach to do as such for generally financial specialists.

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