Active investors can get great cost savings and flexibility with a Beanstox Trade membership. Imagine an active investor saving $500 per month, by reducing trading costs to $0.01 per share, AND buying the exact amount of each investment they want, such as exactly $10 or $100 of a stock priced at $1,600 per share.
First let’s check the savings. Imagine an investor who invests 20 times per week, about 100 trades per month, maybe trying to profit on big stock price moves, news flow and research ideas. Trading costs at conventional online brokerage services, assuming $5 per trade, could be $500 per month which of course is $6,000 a year. OK for some big investors but probably too much for investors with $10,000 or even $100,000. Suppose the trades were for about $1,000 each, at an average $100 stock price, which would be 10 shares per trade. Trading costs for investors having Beanstox Trade membership would be $0.01 per share so $0.10 per trade, and a total $10.00 for the 100 trades per month, plus the $4.99 monthly subscription for the Beanstox Trade membership. Cost savings of almost $500/month and $6,000 a year. Even for people who don’t want to or need to trade so often, maybe 1 buy and 1 sell trade per week, the cost savings could be almost $600 per year.
Beanstox Trade, Great Flexibility
Next, check how Beanstox Trade membership also makes this low cost work with great flexibility for the investor. Here is how. When the active investor buys/sells $1000 of a stock like Apple, at $170 per share, the trade involves 5.88 shares and the trade cost is only 6 cents! or a trade of $1,000 for a stock like Amazon at $1600, which involves 0.625 shares and a trade cost of one cent! Some people may want to make 100 trades per month, and have total trading cost of under $10.
Another win for the Active Investor?
Imagine adding $1,000 each month, to a full portfolio of 50 stocks, involving 50 buy trades. Assuming $20 per trade and stocks priced over $20 per share, total trade costs would be 50 cents!
Invest in Seconds
Finally, check how fast the added $1,000 can be invested, in less than a minute with a few clicks. One click to load the existing full portfolio into the checkout cart, then type in the $1,000 amount to be invested in the portfolio, then all portfolio positions will be loaded and listed in the checkout at equal weighting of the $1,000 which the investor can adjust for any of the weightings, then click “Proceed to Checkout” to have all trades placed at once and usually completed within seconds. That is fast, fun and low cost.
What is a “Pattern Day Trader”?
A Pattern Day Trader (PDT) is someone who effects four (4) or more Day Trades within a five (5) business day period. A trader who executes four (4) or more day trades in this time is deemed to be exhibiting the pattern of day trading (which is defined by FINRA, Financial Industry Regulation Authority) and is thereafter subject to the PDT restrictions.
A day trade is to buy and sell the same security during the same day in a margin account.
If you effect a Day Trade, you will be given a Potential Pattern Day Trader notification warning which will identify how many Day Trades you have and how many Day Trades you have remaining before you are deemed a Pattern Day Trader. It will also spell out the requirements and rectification that you will be allowed to exercise should you be tagged as a “Pattern Day Trader”.
The account holder can wait for the five-day period to end before any new positions can be initiated in the account to avoid being designated a “Pattern Day Trader”.
What are possible cash account violations?
If a security purchased in your cash account is sold prior to being paid for with settled funds in the account, a good faith violation has occurred. The reason it is referred to as a good faith violation is that trade activity is giving the appearance that sales proceeds are being used to cover buy orders when there is insufficient settled cash to cover these purchases. Basically, trade activity indicates that a good faith effort to deposit additional cash into the account will not happen.
Accounts with three good faith violations in a 12-month period must be restricted to purchasing securities with settled cash only for a period of 12 months.
Good faith violation example 1:
Cash available to trade = $0.00
On Monday morning, a customer sells Y stock netting $5,000 in cash account proceeds.
On Monday afternoon, the customer buys X stock for $5,000.
If the X stock is sold prior to Wednesday (settlement date of the Y sale), a good faith violation would be charged as the X stock is not considered fully paid for prior to sale.
Good faith violation example 2:
Settled cash = $5,000
On Monday morning, a purchase is made for $5,000 of X stock.
On Monday mid-day, the customer sells the X stock for $5,500.
Near market close, the customer purchases $5,500 of Y stock.
At this point no good faith violation has occurred because the customer had sufficient funds for the purchase of X.
If Y is sold prior to being paid for (settlement) then a good faith violation will have occurred.
Good faith violation example 3:
Cash available to trade = $10,000 minus cash credit from unsettled activity = $5,000 (proceeds from a sale of stock the prior Friday – trade settles on Tuesday)
On Monday morning, customer purchases $15,000 of Y stock.
A good faith violation occurs if this customer sells the Y stock on Monday.
The purchase is not considered fully paid for because the $5,000 proceeds are not considered sufficient funds until they are settled on Tuesday.