NO MINIMUM COMMISSION for Online Trading - Stanchart

[candy_chia]

After using the Standard Chartered bank (SCB) online platform for 3 months, I realised there is substantial saving in commission since there is no minimum commission (only 0.2% commission) imposed on each trade. Best of all, I am not required to buy minimum amount of $9,000 equity each trade to compensate for the $25 minimum commission charged by most broking firms. In addition, I don't Overtrade as SCB will only execute your online buy order when there is fund in your account.

Only hassle that I encountered is that I get logout automatically approximately 15 minutes after login.


Standard chartered,the only bank in Singapore that offers NO MINIMUM COMMISSION

(ie. there is NO minimum commssion of $18 to $25 imposed on purchase Spore stock) on all ONLINE Equities trading transactions.

http://www.standardchartered.com.sg/pro ... index.html

Advantages :
(1) For small quantity of shares purchased, this is a sweetener with no minimum commission of $18 to $25 that are generally charged for each trade transacted.

In addition, it is very useful for traders who buy and sell regularly to minimize transaction costs.


2) This implied that there is a flexibility to purchase shares in stagger lots and thus spread the risk, especially for those who want a huge selection of shares in their portfolio.

For example $1,000 worth of shares only incurs commission of $2.00 (0.20%) if trade is executed via standard chartered, compared to $25 minimum brokerage fee usually imposed.


3) Dollar Cost Averaging and Averaging Down strategy, where you buy small amounts of the stock over time to achieve a lower average cost. [/b

Since nobody can predict stock movement, you can buy in small amounts and buy more when the stock price goes down. This is especially useful for stocks which have low prices like many of the REITS which are priced below $1.


Disadvantages:
1) Stocks Are Held Through Custodian Account by SCB

Shares will NOT be deposited in your CDP account

This implied that you won't be able to attend any AGM. Any voting instruction is to be sent via Standard Chartered who is acting as a nominee acct.

Since shares are held by Stanchart through custodian account, so there is a risk that we will lose all $$$ if stanchart experiences financial difficulty.



2) Poor Trading Platform and Tools

The SCB online trading tools are quite ill equipped for the average trader. The Live Prices page can only show one stock price at any one time. The stock tracker page can only show up to 12 stocks per page, none of which are live prices (The prices can be delayed by 10-15 minutes). There are pretty much no Technical Analysis tools available.



Basically, you don’t own the stocks directly through your CDP as opposed to POEMS, Citibank etc. SCB will own the stocks for you.

This might be the reason why the Commission charges so much cheaper, it’s hard to tell if SCB actually buys the stocks you tell them to buy or they simply open a Position with you.

Also, since Companies identify their investors only through Central Depository (CDP), the Companies will never know you actually hold their stocks. This means that you will not receive the Annual Reports, receive any Shareholder Voting Forms or subscribe to Dividend Reinvestment Schemes (DRIPS).

One last thing is if SCB for some reason falls, all your stocks are gone since they belong to SCB and not you. This possibility is quite remote, but never say never.


3) CASH ONLY TRADES, NO Contra

A commonly used strategy by speculators is the Contra strategy. Since Trades are cleared in 3 days time, most brokers only need you to bank in the money before the 3 days are up to secure the trade. This means that if you sell the stock within this period, you do not need to come up with any money at all! Obviously, this is a speculative strategy; it is never a good idea to gamble with money that you do not have.

SCB requires you to have the money in your account before you can buy the stocks, which doesn’t really affect me.


4) Dividend Payments Require More Work, Are Delayed to Next month

This is really my beef with the SCB trading platform. I was expecting my Dividend payment from SingPost this month and it never came in. So I called them up to enquire and this is the reply I get. “I will receive a letter from SCB at the end of the month stating that I have received Dividends and I can opt to either receive them in cash or in shares.” So I asked them if they can automatically just send me cash and deposit directly into my account. They said no. Now that’s just more work for me, I HAVE TO mail back a letter every month (since I get Dividends every month) to opt for my Dividends in cash and I will only receive them the next month.


http://www.investinpassiveincome.com/st ... -and-cons/

[wemakebread]

Thanks Candy!

Here's my 2 cts:

This is somewhat similar to trading CFDs (since it is a derivative of the original public-listed stock) but yet unable to enjoy leverage.

Risk/disadvantage: The ability to transact (buy/sell) and the transaction price depends on the platform and the broker.

For investors who hold the stocks for certain period of time, the savings in commission may not outweigh the cons.
For traders who transact more often and therefore could potentially benefit from the savings in commission, are in fact exposing themselves to the pricing risk (ie. bid/ask quoted by the broker). This would not be a concern only if we can be confident that the platform will consistently give the same bid/ask price as that on SGX based on real-time comparison.

[candy_chia]

Hi wemakebread,

Thank you for raising those valid points.

Been using Stanchart Online Trading for about 6 months for 60% of my portfolio. It is especially useful for counters to accumulate counters in stagger lots to average down my purchase cost to accumulate shares trading at bargain prices during correction .

Simultaneously, utilise the service of UOB Kayhian to tap on the remiser's free daily stock analysis writeup & Dr YC Chan's articles.


Agree on the cons listed under (1)(2) and (5), cannot verify (3)(4) as don't have any right or warrant for counters acquired.

Below are sharing from valuebuddies forum on the pros & cons of stanchart online trading :

Benefits:
1) Low Commissions (main benefit)
2) some news feed/analyst reports

Disadvantages:
1) online platform very lumbersome, hard to trade relative to other platforms

2) hard to get Real Time Quotes in one screen. have to go into each stock and click on ‘REFRESH’ to get real time quote. (can be overcome by checking the real time quote of alternative trading platform for me)

3) this is the very painful part – very slow in informing about Rights issues. and don’t send the full rights prospectus, unlike when your stocks are in CDP. Only send one sms or letter and it’s usually later than the mails I receive from CDP on rights issue.

4) Does not reflect my Warrant Value and info on my online account. e.g. for Olam warrants. Said online platfom does not support warrant trading. Said that I have to call trading desk if i want to ask about my values and trade. And I only know my trade results end of the trading day if it is done by trading desk. (!!!???)

5) Sometimes Trade Execution is Super Slow. For eg., I submit a price th at is at the current market price (as checked from another trading platform) and with sufficient volume, but the SCB trade just gets acknowledged but not executed for very long.

Thanks Candy!

Here's my 2 cts:

This is somewhat similar to trading CFDs (since it is a derivative of the original public-listed stock) but yet unable to enjoy leverage.

Risk/disadvantage: The ability to transact (buy/sell) and the transaction price depends on the platform and the broker.

~~ For investors who hold the stocks for certain period of time==> the savings in commission may not outweigh the cons.


~~~ For traders who transact more often and therefore could potentially benefit from the savings in commission ==> are in fact exposing themselves to the pricing risk (ie. bid/ask quoted by the broker). This would not be a concern only if we can be confident that the platform will consistently give the same bid/ask price as that on SGX based on real-time comparison.