The Broker Preparation Guide
Following my last post titled The MOASS Preparation Guide I noticed there was a lot of questions around which broker to use. I have taken the time to thrawl through the internet and find out the important questions about popular brokers.
Here are the things that you need to be cautious of:
- Did they block trading during the January mini-squeeze?
- No saying if they will or wont do it again, just some transparency on what to expect should there be a lot of price action again.
- Who is their clearing firm?
- Apex Clearing seems to be at the centre of most of the buy restrictions in January. However, they didn't restrict selling.
- Do they lend your shares?
- Make sure that you check and opt out of the share lending program of your broker.
- Do they use CFDs?
- If you buy a Contract-for-difference you are not buying the actual stock, and hold no rights as a shareholder.
What should you do with this information? Not financial advise, but:
- If they are under Apex clearing i wouldn't wait until D-Day to start FOMO buying
- If they only offer CFD, then i would be buying shares on a different platform (diversify brokers)
- If they lend your shares i would contact them immediately to opt out of share lending, and switch from a margin to a cash account if possible.
using a phone? swipe left to see full table -->
| Broker | Broker Blocked buy (Jan) | Broker Blocked Sell (Jan) | Clearing House | CH Blocked Buy (Jan) | CH Blocked Sell (Jan) | Lends Shares | Is CFD? | Comments |
|---|---|---|---|---|---|---|---|---|
| Ally | Yes | No | Apex Clearing | Yes | No | yes | No | You need to make a call to Ally to unenroll, customer service reported to be unresponsive |
| BMO | No | No | The Clearing House Payments Company | No | No | yes | No | they can loan your shares but only if you had a negative margin balance |
| Capital.com | No | No | https://capital.com/ice-definition | No | No | No | Yes | |
| Citibank | No | No | ? | No | No | ? | ? | |
| Degiro | No | No | ? | No | No | No | No | They limit sell orders at +20% of market price, Lending only not enabled on custody account |
| Disnat | No | No | ? | No | No | ? | ? | |
| E*Trade | Yes | No | E*TRADE Clearing LLC | No | No | Yes | No | Will loan your shares on a margin account. |
| Etoro | Yes | No | ? | No | No | No | Only with leverage/shorts | Added a sneaky stop loss that closed many peoples positions, faced convenient outages |
| Fidelity | No | No | National Financial Services, LLC | No | No | No | No | |
| First Trade | Yes | No | Apex Clearing | Yes | No | Yes (assumed) | ? | |
| Freetrade | Yes | Yes | Barclays (unconfirmed) | yes | Yes | No | No | Prevents trading of US Stock |
| FutureAdvisor | ? | ? | National Financial Services, LLC | Unknown | Unknown | No (assumed) | No | Owned by BlackRock |
| Hargreaves lansdown | Yes | ? | https://www.hl.co.uk/security-centre/how-safe-is-your-investment | Unknown | Unknown | No | No | Cut off buying and supposedly prevented limit orders during the January. |
| HSBC Invest Direct | No | No | https://www.gbm.hsbc.com/solutions/markets/derivatives-clearing-services | No | No | Yes | No | Loans shares on margin account |
| IG Brokers | Yes | No | Euroclear | Unknown | Unknown | No | Yes | Assumed that it doesn't lend shares. |
| Interactive Brokers | Yes | No | Self-Clearing | Yes | No | Yes | No | increased margin requirements, Blocked clearing for T212, Lend your shares under the Stock Yield Enhancement Program |
| M1 Finance | Yes | No | Apex Clearing | Yes | No | Yes | No | email support@m1finance.com to opt out of share loaning. |
| Merrill Edge/Lynch | Yes | No | Self-Clearing | Yes | No | Yes | No | Contact customer service to check if you're opted in |
| Nordnet | No | No | Euronext | No | No | Yes | No | If you have a “investment account Zero / IKZ”, you have to OPT-OUT |
| Plus500 | No | No | ? | No | No | No | Yes | No longer lists GME to buy, CFD Only |
| Public.com | Yes | No | Apex Clearing | Yes | No | yes | ? | fully paid securities lending turn on by default, need to contact customer service. |
| Qtrade | No | No | ? | No | No | No | Yes | Set marginrequirements to 100%, Set 1500 sell limit |
| Questrade | No | No | self-clearing | No | No | No | No | Need margin account for underlying asset, but they add your shares to the lending pool. |
| RBC | No | No | RBC Clearing & Custody | No | No | yes | No | access to RBC Direct Investing had been temporarily unavailable, according to u/youngpenrose they lend shares. |
| Revolut | Yes | No | DriveWealth LCC | Yes | No | No | No | Blames DriveWealth LCC |
| RobinHood | Yes | No | Clearing by Robinhood | Yes | No | Yes | No | Need to change to cash account, DON’T USE ROBINHOOD |
| Schwab | No | No | Charles Schwab Clearing Services | No | No | Yes | No | Margin Requirements were increased, need to opt out of share lending program. |
| SoFi Invest | No | No | Apex Clearing | No | No | Yes | Yes | |
| Stake | Yes | No | DriveWealth | Yes | No | ? | No | Blamed DriveWealth, said restrictions not their decision; make sure you opt out of lending. |
| Stash | Yes | No | Apex Clearing | Yes | No | Yes | ? | Make sure to opt out of lending. |
| TastyWorks | Yes | No | Apex Clearing | yes | No | Yes | No | Need to fill out form to request no lending of shares. |
| TD Armitrade | Yes (for margin) | No | TD Ameritrade Clearing, Inc (self-clearing) | No | No | No | Yes | Didn't restrict the purchase of stocks with cash. |
| Trade Republic | Yes | No | HSBC Trinkaus & Burkhardt AG | Unknown | Unknown | Yes | ? | u/SWFninjatomm - "sell Limitation of $999999 per Trade " |
| Trading212 Invest | Yes | Yes | Interactive Brokers | yes | No | Yes | No | Blames Interactive Brokers for Trade Execution Delay; Can't opt out of lending on Invest. |
| Vanguard | No | No | Vanguard Brokerage Services | No | No | No | No | |
| Wealth Simple | No | No | Apex Clearing | Yes | No | No | No | |
| WeBull | Yes | No | Apex Clearing | Yes | No | Yes | Yes | Can opt out in your settings for share lending. |
| Wells Fargo | No | No | Wells Fargo Clearing Services, LLC | No | No | ? | Yes | |
| You Invest (JP/Chase) | No | No | J.P. Morgan Clearing Corp (assumed) | No | No | No | No |
Note: this list may not be 100% accurate, this was all the information i could find online. Some information I couldn't find easily. If there is any additional brokers you want to see on here, or you see any misinformation please tag me and I will update. this isn't financial advice, do what ever you like with this information.
TLDR: Check your broker to make sure you don't get left behind when the MOASS happens 🚀Also, if you haven't already, i suggest you make sure you are prepared
-socrates ( ͡° ͜ʖ ͡°)
Posted Apr 11, 2021, 7:02 PM UTC · edited
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