Post by oldman on Oct 19, 2013 8:07:03 GMT 7
In the early days, the online systems were not that reliable and hence, I opened up multiple brokerage accounts. This way, if one system is down, I can always trade through another brokerage system.
Do note that if you use margin or nominee accounts, you have to trade exclusively through that selected broker (as your shares are held by them). In fact, your shares in a margin or nominee account are owned by the broker and not by you. The downside of such an account is that you will not be able to trade at all if that brokerage system is down. Also, in the unlikely event that the broker collapses, your shares in that account may be compromised.
If you trade in cash, your shares are held by the CDP and hence, you can sell these through any broker. As I don't like to take unnecessary risks, I much prefer to have my shares in the CDP and not in a margin or nominee account. Saying that, all our shares bought using CPF money will be in a nominee account.
As the years went by, I realise that brokers have access to the entire buy and sell queues that we have entered.... in other words, if I use Broker A and I am queuing to sell a share and someone else who is also using Broker A is also queueing to sell the same share, neither of us will know that we are both queuing to sell but Broker A will know.
As I do accumulate larger positions in some shares, this puts me at a disadvantage if I use one broker exclusively. My large buy and sell orders may get noticed and my positions compromised. By using multiple brokers, I can split my orders and do things that can mask my actual intentions.
I am a cautious person and I try not to trust anyone if I don't need to. Suffice it is to say that I feel more comfortable with the bank backed brokers as I do tend to trade in larger amounts and I don't get noticed so easily through the larger brokers. Saying that, I do trade through the smaller brokers as well as I find their online trading systems surprisingly, more intuitive and reliable.
Yes, I put orders in exclusively through the internet as I like to be anonymous when I buy or sell shares. Guess I feel safer trading online than to have to call a broker to place my orders.
The issue with many online brokers is that they do put a buy and sell limit amount and sometimes, these amounts can be ridiculously low and makes online trading through their systems a bit difficult if you buy or sell larger amounts. This is why I prefer using the cash upfront option that some brokers offer (eg DBS Vickers). With the cash upfront option, you must have sufficient cash in your broking account before you can buy. By having such an account, I don't have to worry about the buy limit imposed by some of the brokers. The brokers too are happier as they know that you have the money to pay for the shares. Hence, the commission rates for such cash upfront accounts tend to be lower as well.
Selling is a different matter as the brokers still face the risk that you may not have the shares in the CDP. Hence, the commission rates are more standardised to reflect this risk of short selling, whether accidental or not. I tend to sell through many different brokers given that there is little savings in the selling commissions.... if you are selling through one or multiple brokers. Saying that, I do have preferred brokers when I sell as I have arrangements with some of them to sell larger amounts.
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Just curious, may I know what brokerage you are using? The reason I am asking is I am sick and tired of being charged arm and leg at the swiss banks. I tried DBS pte client and it is just another glorified DBS priority banking. Now I just wished to go direct. Is DBS vickers a good choice? Thanks for your advice.
Do note that if you use margin or nominee accounts, you have to trade exclusively through that selected broker (as your shares are held by them). In fact, your shares in a margin or nominee account are owned by the broker and not by you. The downside of such an account is that you will not be able to trade at all if that brokerage system is down. Also, in the unlikely event that the broker collapses, your shares in that account may be compromised.
If you trade in cash, your shares are held by the CDP and hence, you can sell these through any broker. As I don't like to take unnecessary risks, I much prefer to have my shares in the CDP and not in a margin or nominee account. Saying that, all our shares bought using CPF money will be in a nominee account.
As the years went by, I realise that brokers have access to the entire buy and sell queues that we have entered.... in other words, if I use Broker A and I am queuing to sell a share and someone else who is also using Broker A is also queueing to sell the same share, neither of us will know that we are both queuing to sell but Broker A will know.
As I do accumulate larger positions in some shares, this puts me at a disadvantage if I use one broker exclusively. My large buy and sell orders may get noticed and my positions compromised. By using multiple brokers, I can split my orders and do things that can mask my actual intentions.
I am a cautious person and I try not to trust anyone if I don't need to. Suffice it is to say that I feel more comfortable with the bank backed brokers as I do tend to trade in larger amounts and I don't get noticed so easily through the larger brokers. Saying that, I do trade through the smaller brokers as well as I find their online trading systems surprisingly, more intuitive and reliable.
Yes, I put orders in exclusively through the internet as I like to be anonymous when I buy or sell shares. Guess I feel safer trading online than to have to call a broker to place my orders.
The issue with many online brokers is that they do put a buy and sell limit amount and sometimes, these amounts can be ridiculously low and makes online trading through their systems a bit difficult if you buy or sell larger amounts. This is why I prefer using the cash upfront option that some brokers offer (eg DBS Vickers). With the cash upfront option, you must have sufficient cash in your broking account before you can buy. By having such an account, I don't have to worry about the buy limit imposed by some of the brokers. The brokers too are happier as they know that you have the money to pay for the shares. Hence, the commission rates for such cash upfront accounts tend to be lower as well.
Selling is a different matter as the brokers still face the risk that you may not have the shares in the CDP. Hence, the commission rates are more standardised to reflect this risk of short selling, whether accidental or not. I tend to sell through many different brokers given that there is little savings in the selling commissions.... if you are selling through one or multiple brokers. Saying that, I do have preferred brokers when I sell as I have arrangements with some of them to sell larger amounts.
--------------------
Just curious, may I know what brokerage you are using? The reason I am asking is I am sick and tired of being charged arm and leg at the swiss banks. I tried DBS pte client and it is just another glorified DBS priority banking. Now I just wished to go direct. Is DBS vickers a good choice? Thanks for your advice.