Decoding PFOF Impact on Investment: How an AI Legalese Decoder Can Help
- May 23, 2024
- Posted by: legaleseblogger
- Category: Related News
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## Exploring Trade Republic for Trading ETFs
Hello!
I have been investing in ETFs for a little while now and wanted to have a small sum that I could directly invest myself for fun. I was initially attracted to Trade Republic due to its advertised low costs and access to international markets. However, as I have been using the platform more, I have started to question the advantages of their Payment for Order Flow (PFOF) system.
Let’s illustrate this with an example – if I invest 100 € in Company A, Trade Republic indicates that it will take a 1 € fee, making the indicated investment 101€. When I decide to sell and Trade Republic indicates another 1 € fee, my investment would need to reach 101 € just to recoup my initial investment. Considering the sell price, wouldn’t this be a loss since my actual investment is now 102 €? Therefore, in order to make my investment profitable, I would need to wait until it reaches 102 € to cover both the buy and sell order costs. The lack of clarity and the impact of PFOF make it challenging to make informed decisions on when to buy or sell without incurring losses.
### How AI Legalese Decoder Can Help
The AI Legalese Decoder can come to the rescue in this situation by analyzing and decoding the complex legal jargon and terms present in Trade Republic’s user agreements and fee structures. By using this AI tool, investors can gain a clearer understanding of the hidden costs and implications associated with trading on the platform, allowing them to make more informed decisions and avoid potential financial losses.
### Considering Alternative Platforms
Upon realizing the high total costs incurred by Trade Republic and the limitations it imposes on selling investments, I am now seeking recommendations for alternative trading platforms. Specifically, I am looking for a platform that caters to frequent, small trades without charging commissions on every transaction. I am based in France and would also appreciate a platform that offers comprehensive information and features, such as candlestick charts, on a mobile interface for enhanced usability.
Thank you for your assistance in advance!
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****** just grabbed a
Sounds like you want to find a way to get rich easily and quickly. That’s not what investing is about. If you simply want to trade then you should be aware that it’s a high-risk activity and you need to be prepared to take losses.
“It also forces me to hold onto poor investments” – Well, that’s what can happen when you make poor investments solely to make a quick buck.
What trades are you even making if trying to make a profit of just over €2 is excessive for you?
Just don’t buy 100€ worth of shares. An please just redo the same math with 1k, 10k and 100k € per purchase/sell
Also this has nothing to do with PFOF (which by the way is shit)
Use the savings feature to dca and you won’t pay that 1€. It doesn’t make sense to trade with 100€ and expect stock price to move 3% so you can make 1€ profit. Also like you said it makes it easier to get stuck in bad trades because it doesn’t feel good to exit at the same price you entered with 2% loss.
If you want to try your luck trading to earn small amounts, you could try Trading212 cfd’s, but don’t consider it investing and don’t use more money than you can afford to lose. Leverage will make your gains significantly bigger, but your balance can also go negative if you don’t use constantly observe and properly use stop loss. The charts are also just a different level from TR, so you could actually do some technical analysis there. Lastly the CFD account does have fees incorporated into the spreads, the invest account supposedly doesn’t but also doesn’t allow short positions and doesn’t provide leverage.
Don’t trade for 100€, that’s it, really.
You are mixing everything.
PFOF has nothing to do with it. PFOF is paid by the exchange to TR, according to the flow they send, and that is what allows TR to charge you little for your transaction (because they do receive other money).
See platforms like degiro, where they charge way more per transaction, and they don’t use PFOF.
Also, bear in mind that PFOF will be banned in the EU starting in 2026.
A platform that lets you do more transactions at a flat fee is scalable (maybe etoro too?). You can pay X€ per month and do as many things as you want (I think the volume of each one needs to be like more than 200€).
Usually the 1€ fee for external settlement is charged in a lot of brokers, even if it’s not easy to find that in writing. I don’t know if scalable will charge it too, I’ve never used it (I deeply dislike the fact that they are backed in part by Black Rock).