How Trading212 makes money

💬 Trading 212 chat
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Hi :wave:

Without the need for any deep details, but I was wondering how Trading212 makes money to survive as a company?

I think it’s a very valid question especially to who is building a long-term portfolio. :slightly_smiling_face:

Many thanks.

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I think mostly from cfd accounts looses, that’s how it was before free instant trades and free isa account, there is also some tiny inactivity fee after half year without orders on your account but does it give enough money to them hard to say. The best would be to wait for answer from one of team members

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I would assume they might make interest on the uninvested balances of free cash in users accounts like a lot of platforms do. But I would have to agree that the CFD losses are likely to be rather substantial considering the large percentage of people who lose money over making it.

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Spread is with every transaction.

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@Ivan Are there any plans for a T212 listing for those who would like to invest in the platform? Or would such a thing not make much sense or provide reasonable benefits to be deemed viable?

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Thanks for being so honest Ivan.

I am considering opening an account with you for the very long term. I understand you generate revenue from CFDs but, it this sustainable? CFD is now heavily regulated in the EU and even forbidden in the US.
Do you see Trading 212 still making money from CFDs in 20 years?

Anyways thanks for the massive improvements to the Invest app that we are witnessing.

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Any ideas as to what these features will be?

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Could T212 introduce withdrawal and selling fees to their customers without prior notice?

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No. They need to give at least 1 months notice

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It appears not?

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Yes now there is no inactivity fee anymore

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Loads of ways, you should know how haha. But cfd losses, plus spreads. Invest losses, plus the spread. So buy at 1.50 but sale is 1.45 if I sell I lose 5p straight away. Trading 212 makes that.

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I thought that the spread was from Market Makers / Exchanges, I thought that Trading212 did NOT increase the spread. Can anyone confirm?

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It’s illegal to mark up the spread.

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Thank you, that was what I thought, which is why they are moving into lending securities through their new provider.

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CFD losses and minor exchange rate fee’s. but most people lose money which is why brokers offer CFD services as they are very lucrative. Now T212 offers a service to provide shares for shorting which makes some money for them in fee’s. not everything you listed.

considering how markets work I doubt anyone can make money off you losing in Invest besides the person you bought from/sold to, that found a good deal.

also that’s not how buy/sell spreads work on the platform. you might want to touch up your research to avoid making any mistakes that can cost you money. down the road.

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Does Trading212 make money from borrowing the stocks? If yes, how the risk is managed?

Edit: I found partial answer to my question: Securities Lending

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It (and its partnerInteractive Brokers) makes money from securities lending, not borrowing.

Aspects of risk management have been fully discussed in previous threads. Essentially there is no significant risk. Interactive Brokers has enough stock that it can always return loaned out stock whenever investors want to sell.