Free share - catches?

[Diddums]

https://www.trading212.com/en/Free-...SRA1304lTV2rCP9UeIZXbXJbZeNIZrgpuDL4xN9_LB4yE


^NOT a referral link, dunno why its so long.

Anyway, sign up, deposit, get random share worth up to £100. I'm tempted and the terms say that there is no further obligation but I know these brokers charge fees for telling you about their fees so I'm wary.

I wanna buy stock and build a portfolio abd this could be a nice little freebie but I must be missing a catch shirley?

 

[Trusty]

The global economy is overdue a downturn..

This just smells of keeping the frogs in boiling water. You could end up owing money in a years time..

 

[dowie]

Well it seems you need to both open and fund an account - how much do you need to have deposited with them for those account types?

The promotion isn't clear at all - free shares up to the value of several possible values, what are the potential companies whose shares they're randomly selecting? We don't know/they don't tell us.

I mean technically, going by their wording, they could give you shares worth £1 and they've given you some shares "up to" £100. But assuming they are supposedly giving you a freebie ostensibly worth approx £100 then are they essentially going to be dealing as principle here - have they got some allocations of some dodgy AIM stocks at some discount to the current market price that when they give to you are in theory worth £100 perhaps based on the mid price but in reality has a massive spread.

If you do despot with them are they just going to spank you and then fob you off when you try to cash out?

They just sound like a dodgy company, don't think they're based in the UK either...

 

[Rroff]

Someone posted a link I think in the stocks and trading thread that explained a lot of this really well but assuming you don't have a lot of experience then you'd be best off IMO starting with an investment ISA through your bank and making sure you get your head around the fees and risks before throwing too much money at it.

 

[dowie]

Someone posted a link I think in the stocks and trading thread that explained a lot of this really well but assuming you don't have a lot of experience then you'd be best off IMO starting with an investment ISA through your bank and making sure you get your head around the fees and risks before throwing too much money at it.

He's asking about the offer.

 

[Rroff]

He's asking about the offer.

I was responding to the last bit of his post really unless I misread it:

I wanna buy stock and build a portfolio abd this could be a nice little freebie but I must be missing a catch shirley?

I can only guess at his experience, etc.

 

[Pudney]

They just sound like a dodgy company, don't think they're based in the UK either...

The ultimate head of the group is a Bulgarian company. There are 2 UK companies, relatively new startups.

I know how they make their money from CFDs, not sure how they do it with their Invest account assuming the share prices they use are actual prices on the LSE or other SE they use (i.e. NYSE, NASDAQ etc.)

The offer is not that different to a bank's £100 cash if you switch, although you've already highlighted it's not entirely clear what you get or even if it's worth £1 or £100.

 

[dowie]

I was responding to the last bit of his post really unless I misread it:

By "nice little freebie" I'd assume he's referring to the offer, sorry don't mean to derail - I'm sure he can clarify the purpose of the thread - but I'd assume it was asking about this specific company and their little freebie he's seen. There is already a thread for general investment stuff.

 

[dowie]

I know how they make their money from CFDs, not sure how they do it with their Invest account assuming the share prices they use are actual prices on the LSE or other SE they use (i.e. NYSE, NASDAQ etc.)

Presumably they're going to attempt to do it from various charges other than commissions? I also wonder where they execute the orders too - is someone paying them for their order flow?

 

[Rroff]

By "nice little freebie" I'd assume he's referring to the offer, sorry don't mean to derail - I'm sure he can clarify the purpose of the thread - but I'd assume it was asking about this specific company and their little freebie he's seen. There is already a thread for general investment stuff.

I don't really follow that thread to see who is and isn't active in there but his post reads like someone relatively inexperienced looking to get their toe in and stuff like this in my opinion is a terrible place to start - you can quickly end up with costly fees and left holding dead stock.

 

[Pudney]

Presumably they're going to attempt to do it from various charges other than commissions? I also wonder where they execute the orders too - is someone paying them for their order flow?

It's a little confusing actually. Looking at their T&Cs their product is zero commission to trade in shares for the average user (i.e. not a day trader). But when I look at their key information document, the section on shares says the product is a CFD. So not sure if you actually trade in shares or CFDs.

I'm a little tempted to chuck £100 at it and buy shares in a relatively safe company. Worst case scenario it's £100 lost.

 

[Rroff]

It's a little confusing actually. Looking at their T&Cs their product is zero commission to trade in shares for the average user (i.e. not a day trader). But when I look at their key information document, the section on shares says the product is a CFD. So not sure if you actually trade in shares or CFDs.

I'm a little tempted to chuck £100 at it and buy shares in a relatively safe company. Worst case scenario it's £100 lost.

Looks like you have to step between the lines to keep fees to a minimum/none - too much or too little and they charge.

 

[dowie]

It's a little confusing actually. Looking at their T&Cs their product is zero commission to trade in shares for the average user (i.e. not a day trader). But when I look at their key information document, the section on shares says the product is a CFD. So not sure if you actually trade in shares or CFDs.

I'm a little tempted to chuck £100 at it and buy shares in a relatively safe company. Worst case scenario it's £100 lost.

Well I'm not sure that £100 is sufficient as far as the offer is concerned - let me know if you find out....

You can't trade CFDs within an ISA as far as I know and a day trader would't really have anything to gain from trading actual stocks as they'd be liable for stamp duty (not that a bucket shop like this offering them CFDs is going to be useful either) They do make a distinction between their CFD offering and some investment offering where they claim 0 commission - for example they claim to be the first 0 commission share dealing service in the UK.

I think as far as actual shares are concerned, if they are able to offer them commission free then presumably they're aiming to be some sort of UK answer to the US brokerage Robin Hood.

 

[Pudney]

Looks like you have to step between the lines to keep fees to a minimum/none - too much or too little and they charge.

Their CFD product has an inactivity fee, but can't see the same for shares. Did you see anything to the contrary? Their T&Cs make this difficult.

Well I'm not sure that £100 is sufficient as far as the offer is concerned - let me know if you find out....

You can't trade CFDs within an ISA as far as I know and a day trader would't really have anything to gain from trading actual stocks as they'd be liable for stamp duty (not that a bucket shop like this offering them CFDs is going to be useful either) They do make a distinction between their CFD offering and some investment offering where they claim 0 commission - for example they claim to be the first 0 commission share dealing service in the UK.

The share dealing product is the one with the free share offer, and the minimum investment is £1. But as above, T&Cs aren't their strong point...!

 

[Firestar_3x]

At a guess they will charge an account fee of something like £15 per quarter if you don't actively trade, so it ends up costing you to keep your £100 of probably worthless (in the future) shares.

 

[The_Abyss]

Probably a largely illiquid share with no active market for it, value can be whatever the broker says it is. Avoid.

 

[silversurfer]

You can receive 100 cash free and clear if you take another offer I've seen to open up ISA before april. The catch being you must commit 5000 but thats normal.

Shares in general are only worth it for a productive business, plenty of companies just end up paying out only to bank and bond holders and bonds always beat shares, hence you got to be profitable. I didnt even look at the offer but 100 for shares has the major downer of costs to sell it and another thing is spread size which can be 20% if nobody wants those shares. Its just a piece of paper, I think people get that so decide on the idea behind that share.

 

[Pudney]

You can receive 100 cash free and clear if you take another offer I've seen to open up ISA before april. The catch being you must commit 5000 but thats normal.

Shares in general are only worth it for a productive business, plenty of companies just end up paying out only to bank and bond holders and bonds always beat shares, hence you got to be profitable. I didnt even look at the offer but 100 for shares has the major downer of costs to sell it and another thing is spread size which can be 20% if nobody wants those shares. Its just a piece of paper, I think people get that so decide on the idea behind that share.

£100 is cheaper and even without the tax wrapper any divs or CG would be tax free for me anyway

 

[Naima60]

I work in the Trading 212 product development team and someone forwarded this thread to me. There are many wrong assumptions made here and I'd like to answer some of the questions:

The promotion is for the Trading 212 Invest service which has nothing to do with CFDs. It's about real stocks and ETFs. The orders are directly routed to the world's leading exchanges. There's no internalization.
There is no catch. You signup, deposit £1 and you get a share worth between £20 and £100 of a popular company. If you wish, you can sell the share and withdraw all the money immediately. For every friend that you invite and joins, you get another share.
There's no inactivity fee for the Trading 212 Invest accounts.
There are no trading commissions, no fees whatsoever.
How is this possible? We are working on new features which will be optional and for which we will charge small fees. We want as many people as possible to experience our service. Once they see that it's better, they will remain loyal customers. It's growing a tech company 101.
Trading 212 is a UK-based broker regulated by the FCA and owned by a UK-based holding company.


From the numbers that I see, we are already the fastest growing investment platform in the UK. Ever.

 

[dowie]

Kudos for replying, fair enough it seems like a nice promotion.

The promotion is for the Trading 212 Invest service which has nothing to do with CFDs. It's about real stocks and ETFs. The orders are directly routed to the world's leading exchanges. There's no internalization.

I'm a bit confused as to how this ties in with the below?

https://www.trading212.com/en/Best-Execution

clicking on the file for equities, 2018, it seems that all your orders were executed via interactive brokers - they certainly do match some orders internally(or at least used to). Are you sure that part of the business model isn't being paid for order flow?

I'm just curious, I don't doubt there are other future sources of revenue.

Anyway, at the very least a UK version of Robin Hood is potentially interesting.